Episode 3 | Beyond the Bins

Transcript of Podcast Video

Transcripts have been lightly edited for clarity and readability. 

Intro: Welcome to At the Table with Central Valley Ag. Here, we bring transparent leadership perspectives, innovative strategies and actionable insights designed to help you grow your operation and strengthen your foundation for long-term success. Whether you're in the field, in the office, or thinking about what's next, this is where ideas grow into action. Pull up a seat - let's get started. 

Josh Mueller: Welcome to At the Table with Central Valley Ag where we bring the conversation straight to you from across the cooperative. I'm Josh Mueller, senior grain merchandiser here at CVA, and your host for today's episode. Joining me today at the table are Jeff Bechard, senior vice president of grain and Luke Beckman, grain sales manager. In this episode we're going to wrap up harvest, talk market trends, and share some updates on key projects. We'll also discuss the expectation heading into winter grain meetings across our territory. Luke and Jeff, thanks for joining us today. Before we get started, why don't we have each of you share a little bit about yourselves and your roles and how the Grain Division supports its members. 

Luke Beckman: Jeff, you're the top dog. I think you should go first. 

Jeff Bechard: As senior vice president of grain at CVA, my primary role is leadership. The focus is trying to hire the top talent, which I believe we do a good job with, and putting them in the right position because I don't do this alone. The big responsibility in this role is profitability of the division and managing risk so that we can bring maximum value to our member-owners. I work closely with our operations team and accounting team so that we coordinate efforts of merchandising, operations and accounting to fill the responsibilities we need to. 

Luke Beckman: I'm Luke and the grain sales manager at CVA. A lot of people don't know what that means - so I lead our grain origination staff, sales efforts in the country to really own customer relationships and make sure that we're doing what we need to be doing to solve problems for our customers. I lead a team of 12 grain specialists out in the country. They work with farmers to originate grain into our asset base. We run shuttle loaders across the CVA footprint in northwest Iowa, Nebraska and Kansas, and also operate truck house elevators. We provide a service within the grain supply chain, and that's a part of it operationally. But another key part of that is how we solve problems for the farmers and grain markets are volatile and can be a major pain point for our producers. Our team is really focused on solving problems for our producers and orginate grain to those assets. It's my job to lead that team and make sure that we have goals that we're focused on achieving and to make sure that we're doing a good job for our customers because ultimately that's what matters. 

Josh Mueller: You guys are really the face-to-face side of the grain team and interacting heavily with our member-owners. Great to see. To get started, why don't we talk about harvest wrap up. Let's get into some challenges and successes that you guys have seen for the 2025 season. 

Jeff Bechard: To lead it off, harvest did start a little later than normal. Usually we're into it hot and heavy by early September. The way harvest looks at CVA is typically our south region, Kansas, will start on dry land corn. It's mostly dry land in that area and then progressed to soybeans. It's just the opposite in Nebraska and our Iowa regions where we'll start on soybeans and go hard on that and convert to corn. Harvest started off a little bit later but it picked up momentum fairly fast. We had some peak days around the 23rd of October. A peak day for CVA is around 5 million bushels. That's all combined receipts into our elevators over those three states. We were really pleased with that. Those were record days for us. The quality of grain overall was really good. The farmers reported better than expectations on their soybean yields, their dry land corn yields, but we did hear disappointment in the irrigated corn yields just with the growing season being the way it was. 

Luke Beckman: I would say another key thing that was key, this harvest was the introduction of a new crush plant in our foot print - AGP open to processing facility in David City. We're very familiar with that company. AGP is a cooperative in which CVA would be a member of. We had introductory meetings with our producers leading up to harvest this year to familiarize them with that process. AGP's new to the footprint and it was a new experience for the producers in that region where processing in the western corn belt really hadn't been a huge component of total demand in our footprint. That's really changed with renewable diesel and a lot of the green initiatives that have been driven primarily by the west coast and what's going on in states like California and Oregon. But as western corn belt crush capacity has increased, that's been a change for our producers and it's been a change for CVA too, just in terms of our grain flows and where things go. David City is also coming into the mix this year. We also had a crush plant in Norfolk, Nebraska open up a year ago so it's their second harvest this go around. The AGP thing was new and just getting producers acquainted with that experience and as a cooperative, producers in order to access that crush facility have to sell through a cooperative. That's a new experience for us this fall. A lot of learnings on both sides, but I feel like it went pretty well and it was certainly a popular destination for producers in that area. 

Josh Mueller: It's nice to see that we can be origination piece into that asset with how we're set up. Speaking of harvest and some of the successes, I would say it felt like with soybean harvest - I mean, we got a slow start, but when it was rolling, it was rolling and soybean harvest lasted for - I'm sure it lasted two to three weeks, but it felt like we got hit hard for a week. I think we see some same things in corn when it rolls, it rolls. Can you talk about some of the successes of our assets and our facilities with handling speed? These farmers have gotten their equipment and can really hammer stuff out. Are we seeing successes on that side of it? 

Jeff Bechard: I would say one of the things we're proud of is that we do invest in back into our grain assets pretty aggressively. That's one way we get back to our customer through speed and space at the facilities that they depend on. I think we do a pretty good job of planning going into harvest and how we're going to utilize the space, but we have to be flexible so we never know quite how much room we're going to need for beans and corn. We have a general idea, but the key is flexible so that we don't have interruptions or create any difficulties for our customer, but we do experience those from time to time. I feel like it's gone pretty well in terms of being able to execute on the plan and then adjust our space needs as the crop is harvested. I think that was a big success. It always helps when the corn is dry and this year we saw high quality beans. We didn't see as much of the green matter in the beans, and so flow as good and I think that attributed to getting it put away in good shape. 

Josh Mueller: Good.

Luke Beckman: Josh, I feel like people probably don't know there's an awful lot of planning that goes into making harvest a success. Our merchandising staff in the York office along with our operations people do a great job of putting that plan together with the help of origination and just having a pulse for what's going on in the country. A lot of things have to happen to pull that plan off and there is a method, a lot of number crunching that goes on to figure out how big is the Nebraska, Kansas and Iowa crop, what's the western corn belt look like? What kind of an export program do we have? We didn't have one this year. We didn't sell a soybean to China this fall. All that really complicates harvest logistics and makes things pretty dynamic. So the neat thing about a company like CVA, just a shameless plug here, is that we're big enough to where we have access to a lot of the information and have access to a lot of the different markets so that we stay fluid. We can provide service to producers when they need it the most, which is really this harvest period. CVA facilities rarely got plugged. We're going to have a home for you to dump your bushels. We're not going to turn you away because our network's big enough to where we can just continue to service the customer. Even when we get into a year like this, when we didn't have an export program. We had large crops in the western corn belt and we had that bean crop really backlog in the system and getting into our corn space. 

Josh Mueller: A lot of planning, great job communicating across multiple teams and different aspects of our business. Nice job and very well put together. Why don't we move into some market updates? I'll let you take it from here, Luke, with markets. What are you seeing for trends? What do we got going on there? 

Luke Beckman: If you look at last year, 2024, we found pre-harvest lows in August of 2024, and then we saw this methodical rally in the corn market between there and the month of February, and we're in a little bit of a similar track right now. We saw an early pre-harvest loan corn, and as of this conversation, we've bounced out for that and the hope is this corn crop is a little smaller than what the USDA thought it was initially. If we can trim the size of the crop back, maybe get some policy help, we can see this corn market follow a similar trajectory to what it did a year ago, and that would be good news for producers. A lot of this crop is unsold and unmarked by the producer so that's corn. Soybeans have been incredibly range bound for a year. We've been a dollar range from high to low, right now we're actually climbing back towards the upper end of that range. Just a lot going on with leadership in Washington D.C. in terms of what policy directions are we going to take, what trade directions are we going to take? Those things will have a large impact on the potential for corn and soybeans. South America continues to grow bigger and bigger crops. They have the arable land base to bring more acres into production and they continue to do that, so they're not going to go away. We need a little bit of help there. Those are some big things happening, I guess in the grain markets right now. 

Josh Mueller: What do we think these farmers do? What are we looking for recommendations? If they're looking for recommendations, they come to us, what's your guys' thoughts on what should they be doing right now? 

Luke Beckman: Well, number one, I think the first step you do once harvest is over is now you know what your production is. You also know what your costs were per acre for the year. You should have a pretty black and white breakeven at that point - a cost of production. It's updated. It should give you confidence in where do I pull the trigger? The other thing that's going on right now is farm aid and farm support payments are probably going to make up a pretty good chunk percentage wise of the value of farm production this year, and that's going to come in the form of ARC and PLC payments. So producers would've gotten some money this past month or two from the 2025 crop. Those farm program payments are going to go up and they won't realize those though until October of 2026. This year, you need to incorporate those payments into what it's going to take to get there. So take that money into consideration, farm aid, ad hoc payments, just farm aid payments that the administration may decide to make just because of the state of the economy, you need to incorporate that into your decision making as well. It's all part of the pie in terms of 'am I going to make money this year or not?' Define what your final cost of production was, incorporate your farm aid payments in the total revenue associated with that to come with. I need X to pay the bills this year, and we're in a market carry right now although some of those carries have come out and we know that on-farm space is full of corn. There's soybeans on farm. Those carries give you an opportunity to generate a return to your on-farm space. If you know what it takes to generate a profit this year, and you can see a number further out in the curve that makes sense in the deferred months, start making some sales. 

Jeff Bechard: I think with the two new crush plants, especially in Nebraska, the markets encouraged more soybeans to go on farm and in hopes of creating more value to those as opposed to putting corn in those bins. It wasn't a huge shift. I don't believe, but more did go on farm, especially those in close proximity to Norfolk Crush and AGP David City just made sense. Part of it is just harvest efficiency - avoid the lines that we saw during harvest. That and price appreciation would be the goal. And that's one of the things that we'll be shifting our mindset a little bit to. We're used to mostly going after corn on-farm after harvest and so we just are more geared up to try to create those opportunities for our soybean grower that we weren't working on in the past. 

Josh Mueller: We know that Nebraska farmers stores corn, but different opportunities for us as we move forward. Why don't we now shift our focus and review key projects and key updates that we have throughout our own network here at CVA. 

Jeff Bechard: Sounds good. Where would you like me to start? 

Josh Mueller: Luke covered some of the new crush facilities that are in our territory. Why don't you update us on some of the projects we have going on within CVA? 

Jeff Bechard: The one that has been in the press in the last six month is our Hampton facility - the corn cleaning plant in Hampton, Nebraska. We brought that online or into production around March 1st. That plant was built to accommodate the growing demand for tortillas and chips made from food corn. We feel good about that plant. It's designed to process around 6 million bushels a year of clean corn, and we can load out by rail, bulk trucks with 2,700 to 3,000 pound tote bags to hit various markets. We're still working through some of the challenges of bringing a new plant online and we expect to continue to do that. Overall, we've been pleased with the success we've had this far. We hope to have it at about 60% of our full production within the next 12 to 18 months just based on the demand we have right now. And that demand continues to grow. 

Josh Mueller: That's been a good business, honestly. It is a cool deal. It gives us a whole different side of the market, very unique but definitely a good segue for our businesses and our value added side of it. Any other updates we have in our facility? You got some Kansas assets coming on. 

Jeff Bechard: Yes. We brought on a new flat storage facility in Narka, Kansas - a new space with 2 million bushels of space that came with a 20,000 bushel hour receiving leg that's been really appreciated. Our volumes during harvest are record levels on a daily basis just because our ability to elevate there. And farmers appreciated that. The other new facility that we had an open house this summer on, and that's the Courtland Hub, which is a train loading facility on the BNSF as well as a liquid fertilizer unloading facility designed to do 115-car trains that came on very opportunistic for us. Crop is really solid in Kansas, and so that capacity was very much needed. We use this opportunity to close some older elevators that have been at the end of their useful life. It's been a real nice addition. I think the customer is really appreciating that we are pulling grain from quite a ways because the facility is fast. We're excited about that. We've been well supported by our farm customer in that area. 81-20 is a joint venture that we had with ADM. it was started in 2013 to build a train loading facility at the intersection of Highway 81 and 20 near Randolph, Nebraska. That entity has been in operation for just a little over 10 years. In the spring of this year, we negotiated with ADM to buy out their 50% share of that facility and that took effect August 1st and we actually dissolved the LLC September 1st. We just consider that CVA's 81-20 location now. The transition went really smooth. We appreciated the 10 years of being in business with ADM at that facility. It's gone really well. It was just an opportunity for them to make some adjustments in their strategy. It was an opportunity for us to own the whole facility. We already had the fertilizer had the fertilizer assets at that location. This just completes it as a Hub that's solely owned by CVA. 

Josh Mueller: Alright. Thanks for the updates on the facilities. I know we're about ready to wrap this up, but real quick, why don't we cover the winter grain meetings and then we'll wrap this thing up. 

Luke Beckman: Winter grain meetings are really geared towards the customer. It's our opportunity to share information with the customers that we feel is pertinent as it relates to grain markets and really just farm economics. There's different things we're going to cover in there that producers probably are not thinking about when they think about attending a marketing meeting. We really want to hit on farm economics as a whole and other global things that are really impacting the marketplace that they need to be thinking about. We really feel like we're creating awareness around different opportunities for the customer, and it's also an opportunity for us to show our appreciation to our customers. We know they have choices on who they can do business with and we feel like we have to earn that. So our team that is out in the country, we feel like they're some of the best people out there. We screen to hire the right people. We want to train and develop those individuals. We want them to be highly, technically credible at what they do in terms of grain markets and risk management. And so for folks who work at an elevator, we want to make sure there's some of the best out there. So we want to put that on display at our Winter Grain Meetings and share information with our producers that they're going to use to make better decisions for their own operations. Those will be coming up January and February of 2026, and I hope producers can come out and attend. 

Josh Mueller: They're always well done. I encourage everybody to get there and be a part of them. They're a unique perspective and it's good to be there. I think that's going to wrap us up. Thanks Luke and Jeff for being a part of this. Thanks for listening and we'll see you next time At the Table with Central Valley Ag. 

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