Episode 18: Illinois Corn Health, July 2020

Corn basis isn’t where it needs to be in Illinois. If you’re farming in the area, what tools and approaches can help you make the most out of a grain marketing decision? Gabe and Rodney cover the numeric and psychological considerations to keep you profitable heading into the dog days of summer.

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Rodney: I was just talking to a buddy about, hey, what's this year's crop looks like versus last year. And I just ran a couple of counties. So LaSalle County, which is really close to me, it's like a big corn producing county next to me. Last year we had them at 162 for corn. Right now currently, we have them at 202.

Gabe: Oh man.

Rodney: That's a 40 bushel difference.

Gabe: So do you know anybody in LaSalle County?

Rodney: I know tons of people in LaSalle.

Gabe: So, okay. So, when you talk to them, do they feel like what they're growing is 20-30% bigger than what they grew last year?

Rodney: Yeah. I mean, a lot of them, we had some late planting last year and struggled with getting this crop off the ground. So yeah, I don't think anybody's surprised by a 40 bushel corn difference. In fact, that's average, 202. A lot of the guys I deal with, if they have 202, they're going to be very disappointed.

Gabe: That's because you work with only the best farmers.

Rodney: Only the best, only the best. So, you know what the problem with 40 bushel extra corn is, Gabe? If there is one?

Gabe: You probably market it for 160?

Rodney: So, partly. Right? And actually, this year more than most, even that is... It was hard for farmers to pull the trigger on new crop corn this year, just because they were so blinded by what was happening in an old crop corn. So I'd say, most farmers are even less marketing than they're used to. The other thing I see guys doing all the time is basing their sales on last year's crop. Right? So it's really easy to say, "Hey, last year's crop was poor. So now I'm even less comfortable harvesting this year's crop."

Gabe: Sure.

Rodney: So good news. Big yields, times not as big price, can often equate you good profit.

Gabe: So I remember... and I don't think we had this discussion on the podcast, but you were telling me you were doing some analysis that there's actually quite a few folks that selling at harvest is actually the right time to do it from a basis perspective? So with this much production, does that change your storage math?

Rodney: Yeah. So that is all I'm thinking about right now. Right? So actually, this much production would likely even benefit harvest sales even more, in my opinion.

Gabe: Really?

Rodney: Well, so it depends on what's going to happen this harvest. So, I'm looking at a few things. We should just talk through them. What's interesting, I use a lot of our basis analysis and combine it with the Atlas yield data.

Gabe: Mm-hmm.

Rodney: I'm not predicting the future, but you can make some assumptions on what might happen to basis based on what the crop size is going to be. Right?

Gabe: Sure.

Rodney: So, it's been really interesting in Illinois, specifically. We have watched this crop get better in the last six weeks on the Atlas yield data. Right? So it started off, I don't know, I can't remember now what the issues were. Well, it was dry. It was super dry. Right? We got it planted in a timely fashion and it was dry.

Gabe: I love at this point, you have almost forgotten the standing in the rain, which was two weeks ago.

Rodney: It literally was. Yeah. Yeah. So dryness. We've seen the crop pretty steadily improve since then. And what happens is, fall basis in particular is also looking back to last year. So when I worked at a grain elevator, we were saying, "Hey, what should we do with our fall basis?" I mean, we started with last year. Right? So it was either, "Hey, last year we paid too much or we paid too little." There's a term for that, recency-

Gabe: Recency bias.

Rodney: There we go. Recency bias. So we check last year's basis. Last year's basis was pretty strong in my neck of the woods, or in Illinois in general, I'd say for fall. I'm talking specifically fall. So, what I've seen here, as the crops start off slow, it was too hot, too dry. We saw basis steadily improving in the country. Right? So I think guys running country elevators started saying-

Gabe: Wait a minute. When you say saw basis going up, so they're steadily improving. Were you talking about old crop? Like people were starting to pay up for old crop or in anticipation of new crop problems?

Rodney: Yeah. So I'm specifically talking about fall basis; so October, November basis.

Gabe: Okay. Got it.

Rodney: Yeah. Good question. Good clarifying question. Because actually old crop basis is coming off of it's very strong values. Yeah. This is always a super fun part of the year where I get to tell a guy, "Oh, your old crop corn that used to be worth a lot, has now turned into new crop corn, which is not worth that much." So, that's a fun conversation, but which I feel like is shaping up here. Yeah, so what I think we saw was these guys that are responsible for buying grain into space. Right? So I'm talking to country elevators. It's not processors.

Rodney: It's country elevators saying, "Hey, I don't know. Last year we probably weren't paying enough early to get what we needed to get." Right? So that put a little crusher to increase that basis a little bit, improve basis a little bit. And then it was confirmed as we see this hot, dry, crop coming up. So they're like, "Oh man, now I need to get stronger again." And we saw this steadily stronger. And now, I'm seeing our Atlas data, me standing in the rain type stuff. Right? My own experience saying, "Hey, actually, I think this crop looks better than it was." And we haven't seen basis react negatively to that. So we see basis numbers-

Gabe: Still firm.

Rodney: ... on the high end of historical ranges for sure.

Gabe: Okay.

Rodney: All right.

Gabe: For fall delivery. Okay. So, when you say the high end, I think last week you were throwing out things like percentiles and stuff. What do you mean by they're at the high end?

Rodney: Just throwing stuff out.

Gabe: Does that mean you're looking at the last 50 years and you're like, "Hey, this is one of the best five years?" What are you-

Rodney: Usually five years is kind of what I'm looking at to see if it compares. So, I would say on average, we're probably about a nickel better than I would expect. Right?

Gabe: Okay. So, let's think through this, or help me think through this for a second.

Rodney: Yeah.

Gabe: Okay. So there's a pretty good narrative about why basis would have firmed up. And then you're calling explicitly, Atlas isn't the only place where large crop is being forecasted and that's become fairly confident over the last two weeks with the rain. And so crop feels like it's getting made. Similar to you, the anecdotes that I get out of the field are all strong. Right? Nobody's saying it's bad. Some are like, "Well, it's good. And then I got some great stuff over here." Right?

Rodney: Yeah.

Gabe: And that kind of thing. So really, generally, it's the most sensational stuff that you hear about from guys talking, but most of the rhetoric I think is in line, that I'm hearing, is the same that you are. So big crop for this fall, seeing basis not fall off is surprising.

Rodney: Yep.

Gabe: So I want to make a guess. So I guess, first I'll ask, I don't want to hear the answer. Do you have a view on why that is?

Rodney: Yes.

Gabe: Okay. I'm going to make a guess first. So Rodney, normally, says X, like I know everything. Well, he knows everything that's why. So, this is me.

Rodney: Yay, look, in the future in about 10 seconds in the future, you're going to prove that you know more than me about a topic that you don't know as much as me about.

Gabe: I don't think that's true, but anyway, we could go back to the Spider-Man conversation from a couple of weeks ago. But anyway, so I know it's not unusual to see basis stay steady or drop as future markets rally. And in fact, we're seeing the opposite right now. So we kind of peaked out just below 370. We talked about this last week for the [Diest crop 00:00:08:35], Deist corn crop prices. And now we've seen that come off pretty hard and just keep drifting lower and lower and lower. So, my guess is, we're seeing the basis stay firm just because the futures are hitting so hard. So, that that's my guess. And now I'm looking for you to tell me why it's actually happening.

Rodney: No, that's part of it. I don't think it's any surprise. So the reason I looked up LaSalle County today, was a old buddy of mine that runs the commercial elevator, was like, "Hey, tell me a little bit about the crop size in my own backyard." Right? Looking for another perspective. We didn't talk about the implications of the number I gave him, but I suspect that he was thinking, "Hey, this crop looks a little bigger than maybe I thought a couple of weeks ago." And he wanted to confirm that. Right? Or find some other information. The other thing really comes down to ownership. So this is the most interesting thing about running a grain elevator in my opinion. So, the cash price of corn is not where the farmer wants it right now. It's significantly below. Right? We just can't find anybody even remotely excited about the price of corn.

Rodney: So, what the industry has done is offered commercial storage. Right? Where the farmer can pay a few cents a bushel and rent that space from the elevator. The trick to that is that elevator has to have the actual space at their place to rent that to a grower. So not everyone knows this. I don't know if you know this, Gabe, but if I have a two million bushel grain elevator and I go out and say, "Hey, Mr. Farmer, you can rent this space for 20 cents a bushel." I physically have to store that grain at my location.

Gabe: I've got a bunch of questions about that, but so-

Rodney: Doesn't make sense to everyone outside the industry. I don't know. Yeah.

Gabe: Oh, I don't... Well, so it makes sense to me that as an elevator... Well, so, all right. So I think we can put some guard rails around this. So when I rent from the elevator and I'm renting out my space as storage, I haven't taken ownership of that grain yet. Right?

Rodney: That's right.

Gabe: I mean, that was the headline on kind of what you said. So, I put two and two together there, so I don't own it yet. So, that means that I can't actually sell it to somebody else. I don't have the rights to do that. So right now, I am literally just outsourcing storage space. So, it makes sense to me that if there were... I mean, you said two million bushels. If I had two million bushels of capacity and I've rented that all out for grain I don't actually own yet, I can't rent out space for two million and one bushels, because that will have meant that I sold one of those bushels to somebody that I wasn't allowed to.

Rodney: That's right.

Gabe: Because I didn't own it.

Rodney: Yeah.

Gabe: Okay. Now-

Rodney: Yeah.

Gabe: Can I go in and get my grain back?

Rodney: So, there is typically an out charge where you could do it, but I'll tell ya, I have traditionally set my out charge at a place that wouldn't be... A place where you-

Gabe: You didn't want it to be attractive.

Rodney: Go pick up the grain. Yeah, right.

Gabe: What if I write my name on each kernel?

Rodney: It's all mixed in. You dump 15% number two yellow, that's what you get on the way out. You can discount me if it's not quality.

Gabe: It's not.

Rodney: So I think that is what we just called, we just named the perfect scenario. Right? But the reality is, when you own a grain elevator, you can't just bring in grain, let it sit there till the end of time. Right? You constantly have to be kind of moving this grain around and shipping stumps. You got some space that you can store till July. Maybe you got some space that you wouldn't store past December. I've seen some of these bins where it's like, "Hey, this is fine to keep it for a little bit, but it's got to go." So you can't let the farmer dictate that for you. So in a lot of cases, you're trying to manage this ownership versus what you let the farmer rent from you. Right?

Gabe: Mm-hmm.

Rodney: Because you need to have some control over your operation. So I think part of what's happening in Illinois here, is everybody understands is a big crop. They're trying to get some ownership so they can operate their business in a way they want to operate. And the way to do that is through cash sales or basis contracts.

Gabe: Pay out.

Rodney: That's what makes this harvest basis seem strong to me right now.

Gabe: So you think there's still a bunch of grain sitting in those bins that's unpriced in those commercial storage facilities, and so the country elevator's like, "I need to get this out so I can get the newer stuff in?"

Rodney: That may be part of it. But I'm actually talking about just let's pretend everybody was empty, come October 1st.

Gabe: Okay.

Rodney: Right? And it's like, "Hey, of this grain that's coming my way, I assume there's going to be enough to fill up. So I want to kind of manage what I own versus what the farmer owns in my facility, just so I have a little bit of control." Right?

Rodney: So I looked up a specific place. I looked up Northern Illinois, Northwestern Illinois. I mentioned we have a lot of listeners in Illinois, so I thought I'd pick on Illinois a little bit. It also happens to be an abnormally large crop right now. So it looks like, according to Atlas, that's a really good looking area, lots of corn up there. And I just said, all right, I'm a farmer in Marston, Illinois. I picked Marston for some reason. I've never been there. You ever been there?

Gabe: Me neither.

Rodney: All right, so Marston, Illinois. It looks like a farmer in Marshall, Illinois could sell his fall delivered crop for about two dollars and 99 cents. Appeared to be a reasonable harvest price for them. Any farmer going to be excited about that?

Gabe: Well, I don't know. How many bushels are they growing? Right? Like, I mean, hopefully that's the math they're doing is how much... If it really is a good crop. I know you're talking about it in context of versus last year, but last year was not a good crop. Right?

Rodney: Right.

Gabe: It was passable. So, how does that price... So, I think when we talk about breakeven's, a lot of times we talk about on-trend yields. Right? And thinking about breakeven's there. So, when you said it looks good, how much bigger does the crop look like versus trend-line yields? Do you have a feel for that?

Rodney: I'm sorry, I don't have a feel for that off the top of my head. I will say this. It seems like about trend-line actually. Maybe a little above trend-line for that. Yep.

Gabe: Okay. So it feels bigger because last year was lighter.

Rodney: Exactly. That's the biggest-

Gabe: But it's actually in line. So, that 299 cash price is probably just below breakeven's, right? Like we think breakevens a little bit above three?

Rodney: Yeah. Probably 340, 350, even.

Gabe: Okay. That's more than a little bit.

Rodney: Yeah. It's a lot below, I think.

Gabe: All right. Okay.

Rodney: Not happy with the price. Right?

Gabe: Not happy with the price and if you're talking about on-trend deal, then yeah. I got nothing to get happy about.

Rodney: So I talk a lot at Indigo about with grain marketing. Really what I'm worried about is my next best alternative. Right? What is the other thing I can do? Because if I could predict if the futures market is going to go up or down, that's great. I can make a ton of money doing that. But most of the time when I'm talking about decision making, I want to know my next best alternative. So, what most guys are going to do, if they don't like the price of grain today, is they're going to put that grain in storage. Right? They're going to go rent commercial space, and so I don't know the discount schedules of these particular elevators, but I'll tell ya, it's typically about, let's say 15 cents in charge. So I'm a farmer, I'm going to show up to Gabe Sheets-Poling, LLC Elevator, and you're going to charge me 15 cents to rent your space, and that's going to give me storage until usually January 1st.

Gabe: Okay. So 15 sentences is my in-charge in about three months.

Rodney: That's right.

Gabe: Okay.

Rodney: That's right. Then what you're going to do is you're usually going to shrink me down a little bit. So corn is sold cash typically at 15% moisture. But if you're going to offer your space up as a grain elevator, you're going to dry that corn down a little bit more to be able to store it longer. So typically what you do is you tell the farmer, "Hey, that's fine. I'm going to shrink your corn on storage. Rather than 15%, I'm going to shrink it down to 14%." Does that make sense?

Gabe: Okay. Yeah.

Rodney: Is water important, Gabe? Is that an important thing when it comes to pricing?

Gabe: I mean, I feel like people don't like transporting water around.

Rodney: It is expensive. That's right.

Gabe: It's expensive to move. And obviously it changes the... Well, I mean, in this context, the most important thing, right, is the durability of the corn.

Rodney: So, one of the things I see farmers miss all the time when they're doing this decision tool is, "Hey, actually, if you're going to shrink corn from 15% to 14%, just that shrink alone is going to cost you about 4 cents a bushel at three dollar corn."

Gabe: Really?

Rodney: Yeah. Does that make sense?

Gabe: Yeah.

Rodney: So that's $3. Yeah. So that shrink ends up being 1.4% is kind of the industry standard that they use, from 15 to 14.

Gabe: Okay. And what about from 14 to 13? I mean, I'm just curious, is it a linear-

Rodney: So, I'm sure at some point it goes down, but yeah, it's a linear. We use linear for the most part.

Gabe: Well, because... And I know sometimes in dryer harvest seasons, right, you guys will pull in 12%, 13% moisture and-

Rodney: Ah, so that is like a ghost cost. Right? That is one of those super interesting costs that we're always trying to capture here, where there is no bill for losing out on 3%. Right? Nobody tells you that you lost out of it, it just shows up. It's just like, "Hey, I didn't get as much money." Yeah.

Gabe: Right. You thought you were at 205 and now you're at 192.

Rodney: That's right.

Gabe: Yeah.

Rodney: All right. So now what we're saying is, "Hey, it actually costs me at Gabe Sheets-Poling, LLC Elevator 19 cents-

Gabe: For three months of storage.

Rodney: To get to January 1st.

Gabe: Okay.

Rodney: Right?

Gabe: Yep.

Rodney: All right. What I'm trying to do is avoid pricing my grain because I want to get the highest price possible. So instead of selling 299, which I don't like, I'm going to drop it off with Gabe and spend 19 cents to also eventually receive a price I don't like. Maybe, right? It just depends on what the market does. So I checked at this particular location that I picked out, I could have received 309 for my January bid.

Gabe: Okay.

Rodney: All right?

Gabe: So but then you've got to back off the 19, you're saying.

Rodney: That's right.

Gabe: Okay. So, not 290.

Rodney: Yeah. So when I'm thinking about this next best alternative, I'm saying, "Hey, look, I think the price is going to go up." That's fine. Right? And frankly, Gabe, I think the price is going to go up. So fine. But how do I best take advantage of that? Most guys are going to default to commercial storage. And I guess what I'm trying to remind people is, is if you do that math, you need to calculate your in-charge, calculate any extra shrink you're going to take by doing that, and now what you do is you take that January bid or wherever that ends, lower it by that, right, and say, "Am I better off selling 299 in the fall or 290 in January? Right? Which I think is a pretty easy answer.

Gabe: Mm-hmm.

Rodney: And make decisions around that. Right?

Gabe: Mm-hmm.

Rodney: So how would you handle it, Gabe, if you thought the price was going to go up, what are some things we can do?

Gabe: I mean, there's two pretty clear... Well, you have three choices. Right? So, you've laid out one of them, which is... So, I think we're accepting the premise, you got to deliver it, but you don't have the storage to handle whatever it is, so you're going to deliver it.

Rodney: That's right.

Gabe: So option one is, is as you're laying out, leave it unpriced at the facility and pay commercial storage. So, that's one.

Rodney: Yep.

Gabe: There's two other things that I know we do, but I know a lot of other places offer as well. So one of those is what we call price pivot. And so that basically, you price that grain and so it's effectively sold. So ownership has moved, but you don't take payment on the full contract yet, and you regain that long exposure to the futures price. Now, the advantage of that is so you're paying some fee to get into that tool, right, to pivot back into long, the market-

Rodney: Lose two or three cents.

Gabe: Couple cents. Yep.

Rodney: Yep.

Gabe: And it's got unlimited downside. So when we look at the difference between what you could do in terms of leaving unpriced, paying storage, and just getting along in the market. So one, it has the same futures exposure. So you're still just straight up long. Two, the fixed fee for doing that is a lot less, because you're just paying a couple cents out versus basically... You talked about that gets you through January. I don't think there's a lot of rebating if you get it sold by December 15th. They're not giving you a bunch of back.

Rodney: Zero rebates.

Gabe: Zero.

Rodney: Exactly zero.

Gabe: Right. So, that's kind of a sunk cost there. Not kind of, it is a sunk cost there. And then, the third piece that you don't get to take advantage of is if you also think basis is going to appreciate. So when you make that sale, you take yourself out of the basis game.

Rodney: That's right.

Gabe: So lower fixed cost, no exposure basis, same exposure to the futures market. Unless you've got a strong view on basis appreciating to that Jan delivery date... Which, I mean, maybe it happens, maybe it doesn't. And even if it does, it's unlikely to be as volatile as you would expect to see at other futures.

Rodney: Yeah.

Gabe: So that's one path, I see basically to taking on a similar exposure, but way lower overhead, way lower costs.

Rodney: Yeah. The other thing I'd say is even if in this exact scenario, even if you thought basis was going to appreciate, we should understand that basis would have to appreciate 19 cents to even be in the same boat. Right?

Gabe: Right. To make it worth... Yeah. And more than that. Right. If it's 2 cents to do the pivot it's 17 cents.

Rodney: Yeah.

Gabe: And then the other thing is, is our old friend minimum price. Right? Which is-

Rodney: Yeah, buddy.

Gabe: ... buy a min price call. So you pay a fixed cost, but you kind of decide where you want to be able to be into the market again. So it could be, you're paying 15 or 20 cents for that, or you could pay much lighter. Right? So if you want to buy a lotto ticket in case something crazy happens in the market, it goes up a buck, you can buy something that's 20, 30, 50 cents out of the money for a really low cost. And it gives you that opportunity to participate. The big advantage there being the fixed cost of the premium and no downside.

Gabe: Right? It has... So it's the same type of exposure as a pivot, without the downside. Variable cost to get into it, but you still know it once you do it. It's not going to change. And so, that's another path to go.

Rodney: That's right.

Gabe: If I were to do it and I thought the market was going to go up, but I wasn't really confident. Right? So I mean, knowing what I know, I am more worried... Well, not just knowing what I know. In general, I am more worried about the market going down than going up, especially at this point. Right? Once I'm already in a loss situation, every additional penny I'm losing, I think hurts all the more, but if I had some belief that something might happen, there's some narrative out there that could lead to higher markets, personally, I would probably go the minimum price round, just so that I could do it and not have to worry about it.

And I would probably buy something that actually gave me more time than just through January. That's the other thing that we didn't talk about is, both those other tools, the price pivot, and the minimum price approach, can give you a much longer period of exposure to the market that you... We're not going to do the math on what's... So, okay. What's it costing me to store from Jan to Feb? What's it cost me to store from Feb to March? Those types of things.

Rodney: That's right.

Gabe: So, that's what I would probably do if that was the scenario I was imagining.

Rodney: We're deliberate, Gabe, on this podcast that we're not trying to promote marketplace on its own. Right?

Gabe: Mm-hmm.

Rodney: We are trying to help farmers make sense of the world and market grain appropriately. The ones we talked about today are available inside the marketplace, in a lot of cases available outside of marketplace; not everywhere. What we're really trying to do is help guys think about that math they should be doing when they're making that decision.

Gabe: That's right.

Rodney: I personally think we should touch on the psychological piece of this. Because I think, this is important, right? So, I want you to help me understand why, if I'm a farmer, and I put grain into storage, right? So I essentially have always done... Man, Gabe you should have the experience of putting grain into storage. Right? So, let me talk about this a little bit. When we put grain into storage... I'm going to start it the other way. When we sell grain, right, it's like, "Man, what's the price? Oh boy, what do we think about that? Oh, what's South American crop look like? What's my profitability?" All question, question, question, question, question. Right? And then finally you pull the trigger and you immediately have seller's remorse. Right? Just full stop. This is how it works.

Gabe: That's a horrible idea. I can't believe I did it.

Rodney: I can't believe I did that. Right?

Gabe: Yeah.

Rodney: And we've talked about a lot about that. Storage, if you never had the opportunity to do this Gabe, you pull up to the elevator in your semi or wagon, tractor, whatever. And in ours, it's a button. You push the button and it's like an Intercom system to Marcy. Right? And you say, "Hey Marcy, Conner Farms. Throw it on storage," and then you drive away. Right? So it is the easiest thing in the world to do. I'm interested in your thoughts about that.

Gabe: Well, I think you're calling out that it's easy... So, you know what it's kind of like? So there are these mobile games, right, on your phone.

Rodney: Sure.

Gabe: And they're built to create dopamine production in your brain. So, there's this guy, Skinner, he's a famous psychologist that always experiments. So if you're familiar with the rat in the maze or going for the cheese or... The one that's relevant is he did one where there was a button. If the rat hit the button, it got cheese. And so, whenever the rat wanted food, it would hit the button and it got cheese.

Rodney: Sure.

Gabe: So now let me create a very important build on that. What Skinner learned was when the rat hit the button, if the rat got a random distribution of cheese, both in terms of size, of amount of cheese, and/or whether or not there was any, the rat didn't hit the button when it was hungry, it hit the button all the time.

Rodney: Oh man. That is... Yeah. All right.

Gabe: So, they call that a Skinner box. Right? And so, this should sound... That's actually exactly what a slot machine is. Right? So a lot of the time you get a little payout, right, sometimes you get nothing, but every once in a while, there's a big thing. Right? There's a huge payout. And that what addicts people to gambling. So now I'm going to take it to your phone. So there are video games. So the way they create payouts, isn't through a bunch of cash coming your way, but it's a bunch of fireworks. Right? I think you showed me one time, one of your workout apps, where when you hit a new personal record or something, it's like, "Rodney, you're amazing. Boom, boom, boom, boom, boom."

Gabe: And you're like, "I feel good when I see that." Right? I want to get it again. And it's not huge, but it's something, and it actually, it creates in your case, if it's a workout app, it's an actual accomplishment. When it's a video game, right, I guess it might be an accomplishment, but it's really the illusion of having done something. Or more importantly, it's the feeling of having done something.

Rodney: Yeah.

Gabe: And so there's a whole, industries built around, how do I make you feel like you accomplished something? Right? And there has to be something that you did accomplish, otherwise it doesn't actually do anything. But the bigger deal I can make out of anything the better. So, when you tell me about that experience of driving up... So I just filled up a truck, right, with corn or whatever. So I drove it, coming across the scale. I hit a button, tell them put it on storage, then I'm dumping that grain. And maybe I walked out and opened up the shoots or whatever. But I did a thing.

Rodney: Yeah.

Gabe: While I didn't make any big decisions, I did make a decision. [crosstalk 00:30:25] And we solidified it.

Rodney: You definitely feel like, load done.

Gabe: I was going to say, you're driving out. You can feel the truck' lighter. Right?

Rodney: For sure.

Gabe: It's bumping around. It's like a whole thing. So I think that's what happens is... So, it's not that the farmer in your scenario, right, Connor Farms didn't make a decision. You made a decision, you did a thing. You loaded up, you got a load, you brought it in, you dumped it. You decided to put it on storage, like boom, boom, boom, you're knocking stuff... It's checking stuff off the list, with a regularly functioning human brain, it's always looking for the easiest way to accomplish things, the easiest way to make decisions, the easiest way to move forward.

Gabe: And so there's a lot of times that's super useful, but without constant vigilance, you will find yourself walking down paths of least resistance that aren't the best paths for you. And so, that's what it is. Is it's this construct that I don't think anybody's nefariously constructed, that results in probably a material dopamine release in your brain. You did a thing. You made a decision. Nice. Did I answer your question?

Rodney: Oh man, Mr. Farmer, do us a favor. Take the time now, while you have a little time- 

Gabe: There we go.

Rodney: ... to make a decision. Right? Do the math, make a decision? Because if you don't, you'll likely take the easy path later, which may or may not be the right decision, but certainly will be thrown at you rather than be a real positive decision.

Gabe: It's okay to acknowledge that you're a regular human being.

Rodney: Yeah. Right.

Gabe: I think that's the... And I've certainly talked about this point. Is I get annoyed when I hear people talking about farmer psychology. Like there isn't really farmer psychology. It's these are humans doing this job, and this is how humans act when they're in this job, when they're having to make these decisions. And so the point that you and I have hit over and over again, it's really easy to talk into these microphones and stare at each other and say what we say, and so it really is about acknowledging, "Hey, I'm a human. This is the way my brain works." And it applies to everybody.

Rodney: Yeah. All right, Gabe, it looks like we're almost at time. Thanks everyone for tuning into the GrainWaves podcast, where Gabe and I bring real-time analysis of grain marketing decisions directly to you. If you're new to the podcast, remember to subscribe, leave a five star rating, and share it with your friends and family.

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