Cavalier County Economic and Ag Outlook for 2022

who are solely looking for remote office type jobs. In the past, there were more people searching for those day-to-day type retail jobs so that landscape has changed quite a bit,” Borchardt said. “The barometer of unemployment has a different feel today than it did 5 years ago.”

I asked Borchardt if he thinks we have bounced back as far as the pandemic goes and how the pandemic affected the economy.

He believes there are still a lot of things dripping in relative to the pandemic and how that affected businesses in metro areas. A lot of the impact was somewhat delayed with the Payment Protection Program (PPP), COVID loans, and stimulus payments that went out. It allowed a survival period to take place. Borchardt said in certain sectors that is just now becoming noticeable, meaning at the end of 2021 and the beginning of 2022.

Locally and regionally across North Dakota, Borchardt said ag producers had a phenomenal year.

“You know we were pretty concerned about drought conditions all the way through the middle of the summer even up to harvest time in areas of the state, but fortunately commodity prices sharply rebounded throughout 2021 coming out of 2020 and still sit at pretty favorable levels so agriculture faired very well in North Dakota for the most part,” Borchardt said.

Borchardt said crop producers for the most part did fairly well, but it was the livestock producers that to some extent didn’t do quite as well in terms of profits because a lot of those outlets for insurances and other program payments aren’t there for them.

“So, if there was a sector of ag that did still struggle a little bit, I would say it was the livestock folks. We ended up with a relative amount of success in terms of farming for 2021 here,” Borchardt said. While we all wish we had a crystal ball, none of us do. We can only speculate what the future holds for 2022 as far as the overall economy, and Borchardt has his predictions. He said if agriculture had an opportunity to hit a home run, it was certainly in 2021 as we saw commodity prices sharply increase, and most folks had a modest level or modest prices locked in for their input. Now looking at 2022, prices for fertilizer have more than doubled – a lot of chemicals are up sharply. You can say the same for some producers in terms of seed costs - the cost and the expense columns are almost back to the same level.

Shanda Christianson. Photo by Larry Stokke.

As we are getting further into the new year, we decided to take a look back at how the economy faired in 2021 and a look ahead to what a local bank president thinks we have in our future for 2022.

Todd Borchardt, president of Choice Bank in Langdon, had a lot of thoughts about the topic, including that North Dakota continues to do quite a bit better than the national picture, which is largely due to the makeup of the business in the state.

Borchardt said looking back to the end of 2020 as the country was coming through the pandemic, the economy as a whole contracted in terms of GDP by 3.5%, and by the end of the year, nationally, the U.S. had lost 9-10 million jobs.

That made 2021 a bounce back period where things tried to get back to normal, but a hiccup that was added was other variants of the COVID-19 virus. North Dakota had its worst point of unemployment in 2020 at a little under 9%, and now the state is back to a little over 3%, which Borchardt said is normal looking at the last 10 to 20 years of statistics.

So, if the jobless claims are being normalized, why do so many businesses feel short staffed?

“I think that has a lot to do with the scope of what people are looking for work has changed so much now, too, so I mean you have a lot of people Borchardt said he sees many opportunities for ag producers to be profitable in 2022.

Todd Borchardt, president Choice Bank, Langdon. Photo by Larry Stokke. “Locally, I’m optimistic. I think we’re set up in terms of moisture; we froze up in a pretty good spot in Cavalier County, and we’re sitting on a nice base of snow now. Obviously, you know a lot of that ends up being runoff, but I think moisture-wise we should be sitting really good to get things going in the spring. Hopefully, Mother Nature’s on our side as we move through the year,” Borchardt said.

During our interview we also talked about commodity prices as many producers may be wondering if now is a good time to sell. Borchardt said it is.

“The reason I say that is if you look at the wheat market, canola specific to our area, we are double the price that we sat at less than18 months ago, and we spent a lot of time hoping and praying for a market like this, so a lot of guys are taking advantage of it,” he said.

When looking at world stocks, Borchardt thinks that’s an area that will continue to show some volatility, specifically when you look at the wheat market. In the last 2 to 3 months, there have been short term rallies then pullback, and it goes back and forth like that. In recent weeks there has been more pullback.

“It’s still super profitable for producers to go out and convert crop to cash, and if there’s folks that have sat on some grain holdings for a number of years, they’re taking advantage of the markets today. I do think it’s an opportune time to sell.”

Borchardt said our local area is in good shape in terms of agriculture, saying there is a lot of stability in communities like Langdon and others in the area.

“I’m proud of the business footprint that we have here, and we have a lot of great people doing a lot of great things, so I’m optimistic locally. The national stage might be another situation. Inflation is certainly a risk that’s out there right now, so hopefully we don’t see any major hiccups in terms of stock market corrections or anything that would really impact the national stage,” Borchardt said. “We try to stay somewhat insulated in our area for the local business and the local agriculture, so hopefully we maintain a good spot here.”

Shanda Christianson has been the National Association of Farm Broadcasting (NAFB) Farm Director at Simmons Multimedia for 3 years.

By NAFB News Service

The United State Department of Agriculture (USDA) released its January World Ag Supply and Demand Estimates and the Grain Stocks reports this week. While the January report has been a market-mover in the past, Ben Kasch of Bower Trading said this year’s report is more neutral.

“For the most part, it came in within the trade expectations on most numbers here, and the most aggressive numbers are probably the decline in soybeans production down in South America,” Kasch said. “We've seen a slip from 144 on the Brazil crop down to 139, so that was a five million metric ton decrease for Brazil soybean production, and then, they also cut the corn production by three million metric tons down to 115. To me, that seemed like the largest number that popped out.”

He says U.S. crop production numbers came in as expected.

“Corn production for the U.S. was relatively unchanged: the yield was unchanged, soybean yield was only up two-tenths of a bushel. So, the carry-outs did go up slightly on corn and beans, roughly 50 million bushels on corn and then 10 million bushels of soybeans,” Kasch said. “Wheat carryout did increase quite a bit more than expected, up at 628. Trade was looking for 607. Once again, it was within trade estimates, the average range, and so, for the most part, this is kind of the most neutral January report you could expect.”

While the Brazil soybean numbers were the biggest change, wetter, cooler weather could be on the way to provide some relief. Kasch said he expects the weather to influence the grain markets, but that won’t be the only factor in play.

“You got to look, too, at where the position is. This is a new year; they've been long in row crops for quite a while now, you know, well over a year; and they've been long corn, long soybeans. They just got that short wheat about a week ago. But overall, in the commodity markets, due to the inflationary type of trade, it’s kind of getting to be a little bit of an old news situation and then also our stocks are getting back to a comfortable level,” Kasch said. “So are they going to unwind some of that long position, reallocate money to different markets, to different sectors that may be oversold, or get out of the overbought markets that saw great gains last year? I think some of that money movement is something to watch besides the weather here in the U.S. and, particularly, South America, but the southern hemisphere in general, you know, is still in the midst of their growing season.”

North Dakota Renews Focus on Farmer Safety

By Mike Moen / Prairie News Service

2022 will see a renewed focus on farmer safety in North Dakota with the addition of a new farm and ranch safety director through NDSU Extension Services. Angie Johnson will be the first coordinator the Extension has had in over 15 years, that gap in time being attributed to cuts in federal funding. She says these days, producers face so many pressures, and it can be hard for them to think about slowing down and being extra careful. "We are under Mother Nature's control and, also, with the markets. And so, how do you make really good, rational, safe and healthy decisions for yourself when you're under that kind of pressure?" Johnson said.

She says it's about more than just avoiding rushing on the job – things like healthy sleep habits also are important. Johnson says it's hard to get true data on accidents in North Dakota because so many family farms aren't required to report to OSHA. However, in 2020, the state ranked Shane Sickler, a fourth-generation farmer and member of the North Dakota Farmers Union, was injured in an accident several years ago. He said he noticed the decline in safety outreach and feels a rejuvenated program will help producers, especially those seeing higher turnover with their staff. "We're moving so much faster, equipment changes a lot, so you have to adapt to the equipment more often, and with inexperienced help that comes – that you hire, maybe every year – you have to re-educate 'em about the equipment and stuff," Sickler said.

As she shapes prevention education, Johnson said she'll gather feedback from local extension agents on the types of accidents they're seeing in their counties. She also encourages farmers not to ignore mental health concerns so they're in the best position to run a safe operation.

"Take advantage of the rural mental health services we have. They're so, so much better – they're improving. Telehealth has been a huge factor," Johnson said.

By NAFB News Service

It’s hard to predict the future when it comes to the American agricultural economy, and 2022 is no different. David Widmar, an agricultural economist with Agricultural Economic Insights, says there are several concerns in the months ahead.

“The macro-economy, the overall U.S. economy is on everyone's mind, and how things play out in 2022 could have long-term implications. And I think the important issue is the combination of production expenses and commodity prices,” Widmar said.

He said inflation is the biggest concern when it comes to the macroeconomy.

“Everyone right now is thinking about inflation – and I think that's true – we’ve seen data coming out of the Federal Reserve that said that inflation is pretty high. Thankfully, the duration has been pretty short. We haven't seen inflation lasting very long,” Widmar said. “Again, a year ago, we were looking at inflation rates in the one to two percent range. And so, this has been a pretty short-term phenomenon. How much pain inflation causes are a function of the magnitude and the duration. We have a magnitude that's around five, five-and-a-half percent. The duration has been short. Of course, this is a concern, but we have to put it in the right context. Of course, the follow-up is what's going to happen with inflation?”

Widmar said the biggest economic question is what the federal government will do with interest rates and the effect it will have on inflation.

“It's important to think about how this unfolds, and if we see a scenario play out in 2022 where the Fed is raising interest rates, and inflation is still challenging, then that could spell long-term challenges or headwinds for the farm sector,” Widmar said. “We could see inflation continue to be a concern; we could see the high levels of interest rates continue to be a concern. On the other side, maybe the optimistic side, if we see inflation start to abate or start to slow down as supply chains get restarted, that could be less pressure on the Fed to raise interest rates here in the next year or 18 months.”

Widmar also says policy coming from Washington DC, as well as global tensions are expected to play a part in the 2022 ag economy.