July 2020 Key Connections | 1

www.keycoop.com | July 2020

your essential business partnerA publication dedicated to informing and connecting members.

A refrigerated trailer purchased by the Jasper County group is only one of two “meat process-

ing trailers” in the state of Iowa. Left to right: Randy Van Kooten, David Jansen, Rick Fopma,

Joel Jansen and Bryce Engbers.

continued on page 7 continued on page 4

IN THIS ISSUE

Time to Be Proactive _________ 2

Foliar Protection & Soybean Yield __ 3

Grant for Story City Carousel ____ 5

Welcome to Key, Allie!__________ 6

A Mission on WheelsJasper County group builds mobile meat locker start-upBy Sara Clausen, Director of Communications, Sara.Clausen@keycoop.com

BECAUSE WE LIVE and work in the “corn state,” Iowans are all keenly aware of the recent extreme markets for grain and livestock. It’d be a danger-ous understatement to say the pandemic has negatively impacted the markets and our food supply. When headlines are reading, “COVID-19 is causing food shortages,” “Meat plant closures bring concerns about nation’s food sup-ply” and “Coronavirus sends agriculture reeling,” we know our livelihoods and generations of farming are being threatened. This spring, five men with Jasper County connections became con-cerned not only for the fate of their fellow producers and growers, but for the families in their communities. They say great minds think alike, but these

Key Perspectives What’s ahead for agriculture?By Boyd Brodie, General Manager, Boyd.Brodie@keycoop.com

AS WE ALL look forward to the summer days ahead, we’re also grappling with the question of what’s next after the pandemic. Is it even realistic to think there will be a “post-pandemic” or an “after

2 | www.keycoop.com

THE USDA’S JUNE Supply-Demand Report may have been a non-event on the board, but

it’s far from that when you dig into it. It’s painting a picture of a supply-bear market next year that we need to get ahead of with a proactive, risk-managing plan of attack.

June USDA S&D highlightsThere were very few changes in corn from May to June. The 2019–2020 carryover rose just 5 million bushels to 2.103 billion, which is 60 million bushels below the average trade guess. They lowered this past year’s crop by 45 mil-lion, which brought the total to 13.617 billion bushels. The 2020–2021 new crop picture is entirely different from last year. It projected a crop of 15.995 billion bushels, a car-ryover of 3.323 billion bushels and a stocks-to-use ratio of 22.5 percent. That’s a jump of 2.378 billion bushels year-over-year, which contributes to carryover and stocks-to-use numbers that will put a damper on the market. Soybeans also had a fairly net-neutral report, but I’d say the forecast for them is more optimistic than it is for corn. Greater domestic meal demand helped offset a lack of exports this year. This kept the 2019–2020 carryover in check, with a bump of 580 million to 585 million bushels. The USDA is optimistic about crush expectations for next year as well, with an increase of 15 million bushels from the May report, which took the 2020–2021 carryover projection down to 395 million bushels. The 2020–2021 carryout figure is half a million bushels less than what we realized just two years ago, so that should help facilitate some opportunities. Overall, the report is telling growers to get ahead on new crop corn marketing and to lean toward soybeans if they’re going to store something next year.

Marketing thoughtsHistorically, late June and early July have been an opportune time to clean up some old crop and start on new crop. Even though the market may not be at desired or even break-even levels right now, I’d still highly encourage you to take ac-tion, because there’s still considerable downside. We tested the $3.00 futures level this past spring, and there’s a high likelihood we could do that again. I’d encourage all growers to make HTAs a major part of their new crop marketing

plan. You could also look into premium offers or accumula-tors to make your final futures strike level more attractive. I like HTAs for next year because we should see better-than-average levels of board carry, with a projected carryover of 3.3+ billion bushels. Buying put options is another basic strategy to con-sider in this environment. First, I’d consider covering the portion of your crop that’s not covered by crop insurance and continue upping the percentage of your crop covered by puts until we reach a board level you’re comfortable forward selling. A similar strategy is a minimum/maximum contract with Key Cooperative. This contract still requires you to buy a put option to cover downside risk, but you can cover some of that premium cost through the sale of a call option. The caveat is that there’s a max upside limit at the strike level at which you sold the call. Key Cooperative has some major speed and space proj-ects underway, which will be completed in time for harvest. We’re adding approximately 3.25 million bushels of space across the company, with increased receiving and handling. These projects will further improve Key’s ability to take the harvest surge, in addition to improving members’ harvest efficiency. Furthermore, these space investments will give Key Cooperative the space, time and flexibility we desire to optimize our merchandising strategy next year. Feel free to reach out to a member of Key’s Origination team for more information on marketing plans and how to utilize any of the contracts mentioned above.

Time to Be Proactive By Jason Dubberke, Grain Division Manager, Jason.Dubberke@keycoop.com

Foliar Protection Boosts Soybean Yield Article courtesy of WinField® United

SOYBEAN YIELD is influenced by pod number per plant. The difference between a 50-bushel yield and a 62-bushel yield is largely the number of pods in the middle portion of the plant.

About 60 percent of soybean yield comes from the middle nodes of a plant (nodes 7–13). It is important to protect leaves in these areas because they provide most of the plant energy for the pods at those nodes. Applying a fungicide and insecticide at R2–R3 can protect the middle leaves.

The goal is to add more pods to the plant. According to Purdue University adding (1) three-bean pod can increase yields by three bushels per acre, while adding two pods can increase yields by six bushels per acre.

Special financing available for a limited time.

*Purchase of DeltaForce, SpeedTube, and vDrive are required for the $200 per row rebate. Purchase of 2 of these 3 products is required for the $150 per row rebate. Purchase of 1 of these 3 products is required for the $50 per row rebate. Purchase of Gen3 20|20 required for $1000 off rebate. There is a minimum row purchase required of 6 rows to receive the rebates. Make The Precision Decision rebate program offi cially ends 9/30/20. See additional terms and conditions at maketheprecisiondecision.com. Products must be registered within 30 days of purchase to receive rebate. 20|20®, DeltaForce®, SpeedTube®, vDrive®, and Precision Planting® are registered trademarks of Precision Planting LLC ©2020 Precision Planting LLC.

to take advantage of this offer.

Visit maketheprecisiondecision.com

Limited-time savings available on 20|20®, vDrive®, DeltaForce®, and SpeedTube®.

For more information contact your CENTROL Precision Ag Team:

Jared Tokle641-990-4554

Nick Lacaeyse641-990-1348

Connor Hardison515-320-6822

SUPERIOR PROTECTION FOR YOUR EQUIPMENT. POWERED LOC LLV.®

C> 2020 CHS Inc. Cenex® is a registered trademark of CHS Inc.

515-290-0009

Earn a $15 VISA® gift card for every 4-10 pack or 35# pail OR a $50 VISA gift card for every 120# keg of qualifying Cenex® grease purchased between June 15, 2020 and August 14, 2020.

Contact your local Certified Energy Specialist for details and to earn gift cards.Chris Nady Rod Meyer

641-521-6318

Research at the University of Illinois showed that a foliar fungicide plus insecticide applied at R3 adds on average 2.5 bushels per acre in a standard system and 3.5 bushels in a high-management system.

July 2020 Key Connections | 3

4 | www.keycoop.com

A Mission on Wheels continued from page 1

men set out together on a mission driven by a higher power than just coincidence or like minds. It all started with a phone call in May. “I got a call from Randy Van Kooten for the first time ever,” said hog producer Bryce Engbers of Grinnell. Randy is from Lynnville and also has hog sites. “He said he’d been thinking about how horrible the meat market was and had an idea to purchase a refrigerated trailer to butcher hogs in during these desper-ate times.” Shortly after this call, Bryce’s business partner, Rick Fopma of Lynnville, made an almost eerie pronouncement. He had just been talking to a friend, Joel Jansen of Sully, who was thinking about doing the exact same thing. The next day, Bryce shared the idea with David Jansen of Kellogg, who immediately said, “I’m in, too!” In a matter of 48 hours, all five men were in favor of the project. By 4:00 p.m. on May 5, they had purchased a refrigerated trailer from Vander Haag’s in Des Moines. “After COVID hit, I watched packing plants start cutting back, and I just felt there was going to be a need for meat in our community,” said Rick. “I wanted to help serve others in this way.” “We were concerned about a meat shortage, since many lockers were nine or more months out from being able to process,” added Joel.

“We knew some families couldn’t wait that long.” They are not interested in competing with local businesses; their

goal is simply to get food to families and help producers so they won’t have to let their animals go to waste. So, the group reached out to the local Sully locker to discuss their project. From there, both commitment to the project and modifications inside the trailer moved quickly. In fact, just one month passed between the date of purchase and when they could begin butchering. “Fabrication inside the trailer featured a lot of local talent. Some custom welding was done by Mike Engbers. There was some reused stainless steel and many, many donated items,” said Randy. “We knew the trailer had to be easy to clean and easy for additional volunteers to work in someday.”

The group has applied for their own “stamp” from the USDA, which will certify them as a locker. That will allow them to have meat inspected, so they can donate it to food banks or other food relief programs. “The local USDA officials have been very, very supportive,” said Bryce. “They have helped us de-velop standard operating procedures around food safety practices.” Big picture: The group hopes to someday invite families to use their trailer and process their own meat. For now, they will continue to butcher for their own families and perfect their process. “Good causes and what our faith requires is not work—it’s fun,” said Bryce.

For now, the group is butchering for their families and perfecting their process. It’s their hope that someday other families will be able to use the trailer.

The group is seeking certification from the USDA. Local officials have helped them develop standard operating procedures for food safety.

Story City Antique Carousel Receives Donation from Cenex® and Key CooperativeIowa community honored for historic, hand-carved carousel Article courtesy of CHS, Inc.

Key Cooperative and Land O’Lakes wrote a $2,500 matching grant to support Story City’s historic carousel. Shown are: Key Cooperative Energy Specialist Chris Nady, Key Cooperative Energy Manager Scott Richardson, Jay Wilson (Greater Chamber of Commerce Executive Director), Al Holm (GCC member), Karen Hermanson (GCC member) and Shanon McKinley (GCC Assistant Director).

IN JUNE, STORY CITY’S hand-carved, wooden carousel was recognized by both Key Cooperative and Cenex—the energy brand of CHS, Inc.—for being a unique source of pride to central Iowa. As part of this recogni-tion, the Story City Chamber of Commerce received a $5,000 grant from Cenex to support the restoration of the carousel’s outer structure. To add to the project efforts, Key reached out to Land O’Lakes partners and wrote a matching grant for an addi-tional $2,500.

Story City’s antique carousel has been part of the town’s history since its purchase in 1938. Listed on the National Register of Historical Places, it is decorated with roosters, pigs, dogs and horses—paying homage to its Midwestern roots. Annually, the carousel gives nearly 20,000 rides to visitors from all 50 states

and over a dozen foreign countries.

“Key Cooperative is proud to support the restoration of the 80-year-old antique carousel that makes our town unique,” said Energy Manager Scott Richardson. “Here in Story City, we know the importance of this landmark and are pleased that local and visiting families can enjoy

its charm for generations to come.”

The donation from Cenex was made possible through a grant program that encour-ages Cenex retailers and distributors to share stories about what makes their local communities unique. In total, more than $100,000 will be given back to Cenex commu-nities this year.

“The Cenex brand has a deep-rooted history of serving the people and communities of rural America,” said Bryan Brignac, Director of Marketing at CHS, the nation’s largest farmer-owned cooperative. “We are proud of our associates at Key Cooperative, who are highlighting things that make their hometowns special.”

July 2020 Key Connections | 5

6 | www.keycoop.com6 | www.keycoop.com

Welcome to Key, Allie!

WE’RE EXCITED to welcome intern Allie Wisgerhof to the Key Feed team! This May, Allie graduated from Iowa State University with a degree in Animal Science and had planned to begin an internship with our partners at Purina. Due to COVID-19, her internship with Purina was no longer an option, so we invited Allie to join the Key intern group instead. A native of Van Meter, Iowa, Allie’s extensive experience—including working for a local feed dealer in high school, participating in shows and rodeos and helping out at the ISU horse barns—has prepared her well for this internship. “I originally thought I wanted to be a vet or maybe even a nu-tritionist,” said Allie. “My communications minor led me to the perfect combination of customer relationships and animal nutrition.” This summer, Allie will be responsible for customer service, coor-dinating feeding trials and marketing the Purina retail brand at Key loca-tions. “I’m looking forward to capturing what we call

‘feed in action’ photos as I help lead our harness horse racing feed trials,” said Allie. “I will get to document our 30-, 60- and 90-day trials to confirm the performance benefits of various feed products.” Allie’s home base will be in our Gilbert location, but don’t be surprised if you see her working with producers at your location!

This summer, Allie will be responsible for customer service, coordinating feeding trials and marketing the Purina retail brand at Key locations.

July 2020 Key Connections | 7

Key Perspectives continued from page 1

it’s over,” a time when we miraculously return to exactly where we were or where we left off? The more appropriate questions might be: How do we operate with these new and ongoing realities? What is the new normal during an extended viral pandemic? How do we best move forward, restructure and reinforce ourselves and our businesses for the future? One major reality check exposed by this pandemic is the inconceivable issue of food security and scarcity in the U.S. market—the breadbasket of the world. Our system runs from field and farm to manufacturer and packer. It goes on to the distributor and retailer, then ends up on the family table. What or even who is left stand-ing in the still-reeling hotel, restaurant and institutional sector? This segment used to represent over 60 percent of the average U.S. household food budget. There is no quick recovery for a market that was abruptly severed with a handful of survivors, all of whom are still in distress. What does a swoosh, a W-shaped or a multiple-V-shaped re-covery for this market sector even look like? What are the tributary effects and implications for agriculture? What are the repercussions of commodity markets reacting to this irregular and unpredictable misalign-ment and chaos of supply and demand across all sectors and segments of the economy? The result is a virtual myriad of cascading dominoes crisscrossing all facets of our industry. The inevitable reconciliation of a wartime level of relief spending and investment is simultaneously propping up all sectors of the economy. Our equity will be leveraged and

revalued, but this will not happen immediately. We will have to endure a period of adjustment. The depth and duration of that period will coincide with but lag behind the swoosh or the W. This goes beyond the financial markets. This is recovery in the overall economy—all the interdependent sectors and ultimately the restoration of our GDP. This equity correction will also be delayed by federal price and income support, which will recede well before our oversupply issues have been addressed. For our members and customers, recovery will have to start with a revaluation of farmland and the overdue correction of cash rent. Until commodity markets return to break-even or profitable levels, something has to give. The costs of products and services will also be forced to adjust, while occupying a smaller residual fraction of the production cost struc-ture and with less margin to compress. Individual strategies will be determined by how well positioned equity, working capital and cash flow were going into these events. For most, it will be a necessary priority to mitigate risk and losses and preserve equity and capital until markets stabilize. Cash flow will be tight and require strategies to reduce ongoing costs to carry inventory, monetize those inventories and maximize periods to capture any run in the markets, with established targets in a disciplined or automated process. Our Grain Originators, Field Agronomists and Energy and Feed Specialists are ready to assist in developing plans and strategies to fit your individual situation. As intimidating as it ap-pears, when we consider all that is

happening, having a methodical strategic plan in place can provide more than just peace of mind. As my grandfather used to say, “Indecision is a decision, and it’s usually not a good one.” By being intentional, rolling up our sleeves and working more closely together than ever before, we will suc-cessfully transition through whatever is ahead. The potential of working with an essential business partner that’s committed to your success has never been more evident. The collective strength and power of the cooperative system will be a strategic advantage. Remember to work safely, stay healthy and be proactive in the summer months ahead!

$10,000SUPPORTING OUR CO M M U N I T I E S

in financial contributions and matching grants

this springGIFTED TO OUR LOCALH U N G E R R E L I E F P R O G R A M SFOOD PANTRIES | SCHOOLS | CHURCHESCOMMUNITY OUTREACH ORGANIZATIONS

your essential business partner

13585 620th AveRoland, Iowa 50236

PRST STDAUTO

U.S. POSTAGE PAIDPERMIT NO. 371

NEWTON, IA 50208

OUR BOARD OF DIRECTORS

Key Connections is sent to you courtesy of Key Cooperative. Please send comments or suggestions to Sara Clausen at 515-388-8030 or at Sara.Clausen@keycoop.com.

Would you like to see one of your photos featured on this page? Enter the Connections photo contest, which is open to any member or customer who receives our newsletter. One winning photo will be selected and placed in the newsletter. Winning photographers will receive a $20 gas gift card! Photos must feature agriculture or rural settings; Iowa-based scenes are preferred. Photos must be submitted by the 10th of each month in order to qualify for the following month’s newsletter. Please include your name, address, phone number and email address with your submitted photo(s). Submissions may be emailed to Sara.Clausen@keycoop.com.

Perry Ritland, President

Rick Fopma, Vice President

Branon Osmundson, Secretary

Dave Hassebrock, Assistant Secretary Bryce Arkema, Treasurer

Ron Roseland, Southeast Associate

Brian Larsen, Northwest Associate

Ryan BellMike Engbers Bob Finch Chad HafkeyBrian Sampson

PHOTO CONTEST WINNER: SO MUCH FOR KNEE HIGH BY THE FOURTH OF JULY!

By the Key Cooperative Communications team

your essential business partner