Episode 78: Grain Outlook with Neil Schuller
Live from AgCredit's 3rd Annual Emerge Experience Conference, we sit down with Neil Schuller for a grain outlook.
- Transcription
Speaker 1 (00:08):Welcome to AgCredit Said It, your go-to podcast for insights on farm finance and maximizing your return on investment. Join us as we talk to industry leaders, financial experts, and area farmers, bringing you skillful advice and strategies to grow your farm's financial future ag credit setting where farm finance goes beyond the balance sheet.
Matt Adams (00:38):Hey everyone, welcome back to another exciting episode of Ag Credit Said It. We are recording here at the 2025 AG Credit Emerge experience, and I have the pleasure to sit down with Mr. Neil Schuller. Neil is the manager and grower solutions and agribusiness for the Andersons. Neil has been with the Andersons for 29 years, serving in a variety of roles and leadership positions throughout his tenure. In his current position, he brings the Andersons holistic farm gate product offering, including grain marketing and risk management, fertilizer and inputs, fuels, propane, hedging and sustainability programs to producers across the company's North American footprint. So Neil, today we want to talk about something I would say is usually on every producer's mind, but maybe more so this year than others just with the turmoil in DC and a lot of the stuff we're experiencing. So what we want to talk about, I want you and I always say I want a quick outlook, but I don't feel it's ever quick. Tell us what you think on our grain market going forward. Right.
Neil Schuller (01:44):Well Matt, First of all, thanks for having me. It's great to be at the conference today and man, it's great to see a full house.
Matt Adams (01:49):That's awesome. It is. And I tell you the atmosphere it, it's a very upbeat atmosphere. It is very encouraging to see in our industry that there's a lot of positive thinking,
Neil Schuller (02:00):Right? Well, it's a new year. We're what, probably about six weeks from being in the field,
Matt Adams (02:04):So
Neil Schuller (02:05):It's always an optimistic time. The sun's out today, fortunately. So market wise, boy oh boy, are we in a crazy timeframe right now? Yes, and we've seen a whole lot going on. Obviously a new administration, a lot of new wildcards as a result of that. Things such as tariffs and how those are going to come into play and could come into play. Even the threat of tariffs and what that means into our marketplace. We have to be cognizant of that. We are looking at USDA reports where last fall it looked like we had plentiful supply and we're in a comfortable carry type market. Fast forward to the January report where yield got cut, all of a sudden our stocks got a little bit tighter, puts a lot of onus on weather and getting this crop planted and off to a great start. So that's kind of where we're at today. We're really kind of at this tipping point of, as we head to the field, really seeing how this is going to play and what type of acreage and of what we get this coming year.
Matt Adams (03:02):Right. Neil, when we look at the big question in everybody's mind is the tariffs that's going into in place with our Mexican and Canadian markets, in your opinion, what kind of factor is that going to play on a value of our products we're producing?
Neil Schuller (03:21):Sure, that's a great question. Significant amount of trade business that takes place over both of those borders. On the Mexico side, the number one importer of US
Speaker 1 (03:31):Corn
Neil Schuller (03:32):Goes to Mexico. So tariffs obviously have an impact there on what that would look like. What a lot of people don't realize is the amount of energy that comes from Canada, especially on the east coast, so significant amount of stuff there. We actually saw a caveat of that in the terrace released about a week ago where it was 25% blanket but then 10% only on energy. So trying. The other thing too is a lot of ethanol that goes north over the border, so impact on the corn trade going both ways. One in the form of fuels, one in the form of actual corn itself. Beans wise, that doesn't necessarily impact going either way. Those markets are elsewhere, but it could have a significant impact on the corn market and how much of that stays here in the United States and subsequently is going to balloon those carryout stocks and keep more here.
Matt Adams (04:22):And it's one thing we look at too on our input side, especially on our fertilizer. Are we, are you expecting to see a significant increase in our fertilizer for 2025 with some of that being imported from our neighbors?
Neil Schuller (04:38):Absolutely. Well, and if you look at Potash is probably the one that comes to mind the most because 80 ish percent of the potash that's used in the US comes out of the Canadian mines. We have to be cognizant of that. I know that was one of the tariff pieces that was walked back on looking specifically at Potash out of Canada. The other thing too is just globally the amount of stuff that we import. I know UAN right now is pretty tight as we head to the field in terms of stocks and availability, something that we're watching very closely on that front because if we end up with boosting that corn acreage even more, if we're talking 94, 95, maybe million acres of corn going in the ground, it's going to make a tight situation even tighter going forward on UAN. So we had to be very cognizant of primarily supply and then what subsequent costs it's going to be.
Matt Adams (05:25):Gotcha. So in your opinion with the Andersons and what you guys look at going forward with our crops, we still have a lot of producers I know even locally we work with still holding on to grain, still sitting in the bins at home. What kind of marketing strategy should we be looking at with that grain on hand and what we're going to be for our 2025 new crop?
Neil Schuller (05:47):Sure, and when you look at marketing, we've really seen a shift over last year at this point in time last year, a lot of on-farm stocks of grain that hadn't made its way into commercial hands yet. We have seen a big shift of that kind of courtesy of that January report that we saw future spike up. A lot of guys took advantage of that as we sit today. I would tell you nationally we're maybe 70 to 80% sold on old crop it feels like. Gotcha. So I would encourage guys to look and take advantage of rallies that take place. By the way, with the market that we're in, pay attention to what a rally looks like. So if we were thinking 50, 80 cents the last few years here, 15 20 cents might be more 10,
Matt Adams (06:31):That might be the new norm a little bit.
Neil Schuller (06:33):That's correct. Right. So as we head to the field, I mean obviously we've got a lot of volatility that could be ahead in addition to tariffs in general and geopolitical type things. What's the planning pace going to be like? What acres are we going to do? Obviously the summertime we kill the crop three to five times every summer. So look for those rallies and really start to lay into those because it feels like we're headed towards increased acreage, especially on the corn front. And if that's the case, then all of a sudden our stocks get back 2 billion ish type bushels in terms of carryout, and now we're going to become very dependent on export type business. But it feels like we might be headed into kind of how we ended last 2024 there.
Matt Adams (07:16):I got
Neil Schuller (07:17):In kind of a heavier type market. So I would encourage you to maybe look and pick up that marketing and be realistic about where your targets are and then opportunistic hit that target when it comes.
Matt Adams (07:28):Yes. And then one thing we always say in our industry, and I know you guys hang on to is also Mr. Producer, Mr. Farmer, know your cost of production, know what that crop, where is our break even, where is our cost at? And that just helps us hit that baseline then to go forward on a marketing
Neil Schuller (07:48):Strategy. Absolutely. When I talk to guys about goals and what's your goals and expectations, usually it comes out about, well, geez, I want to try and make as much money as I can. And that's fantastic. I mean, don't we? All right. But at the same time, for the US farmer and a farmer, this farming full time, the number one goal is always to farm next year. And to do that, we have to be doing things at a profitable level. So understanding where that break even is and then disconnecting price and profitability, those are two different things, right? Prices are great. Everybody wants $5 corn, that's fantastic. But if you're profitable, if your break even is four 60, then 4 61 is a profitable.
Matt Adams (08:24):Yes, yes. And that's a great point, Neil. And that's where I encourage our producers, our members, our listeners, to reach out to your group or other groups out there in your area. One thing I had my first major in ag Credit, explain to me, he says, Matt says because, and we farm at home, it's take the emotion out of the crop. That's a tough thing. You can sit there, okay, well one up 10 today, I'm going to hold on and try and just, I know it's going to get a little more and then it ends up dropping like 15. So take that emotion out of the crop, work with an advisor such as yourself and have that plan, have them benchmarks as you put it too. And then if you have a plan, stick with the plan.
Neil Schuller (09:04):Sure, absolutely. And I mean, I'm a big believer in it takes a village. You can't do it on your own. And most farmers got in the farm to begin with because you know what? They want to be on the tractor, they want to be in the combine.
Matt Adams (09:14):That's where they want that. The thing in our mind is sitting down, writing up a marketing plan
Neil Schuller (09:19):That doesn't sound very exciting at all, or a task that you want to do, but something that's very necessary. So I just encourage all the listeners, get with somebody to help guide you through that, help walk you through that. And by the way, I kind of joke about it when I present and talk to guys, but the time to do that activity is now when you're of sound, mind and body, not when you're in the middle of planning season and everything is chaos, right? Take the time and sit down, get with somebody. We're obviously at the Anderson's happy to help you with that process and there's many others out there. But take the time to really put a plan together that when those opportunities come, you're ready for it. You're ready to execute and hit it.
Matt Adams (09:55):That is great. So Neil, if people would like more information on the Andersons and what you can provide for your guys' services, what is the best way to get ahold
Neil Schuller (10:03):Of you? Yeah, you can go to our website, which is www dot andersons with an s, grain.com. Andersons grain.com is probably the best source and all of our contact information you can find somebody who's local to your area. But yeah, definitely reach out and we'd love to help you if you have it.
Matt Adams (10:22):That's great. And we will post Neil's contact information in the Andersons on our printout for our listeners. Well Neil, I want to thank you very much for sitting down with us. It's been a pleasure as always, sir. And looking forward to 25 and I think we want to say the expectations that it could bring and there, that's one thing in our industry, there's always excitement. Absolutely. It's ever evolving, ever changing. So thank you very much, sir Matt, thank you. I
Neil Schuller (10:52):Appreciate the opportunity
Matt Adams (10:54):And thank you everyone for listening. Happy to have you here on Ag Credit Said It. Be sure to look us up in all the platforms out there, like share, subscribe, tell your friends. We want everybody to listen. Hopefully you get a little something out of this and we'll talk to you later on AgCredit Said It. Thank you.
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