Weekly AgNews – September 26, 2017

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Cash Rents Move Lower Across Corn Belt

With lower commodity prices in recent years, many have wondered when asset values in cropland, farm real estate and cash rents would begin to decline in proportion to the declines in farm cash income. Prior to 2013, the correlation between cash rental rates and net cash income was nearly 90 percent. However, since 2013, a much lower level of correlation — driven by low real estate interest rates — has been observed at 22 percent, Figure 1. USDA’s most recent survey of cash rents along with the annual Land Values Summary confirmed that cropland, farm real estate and cash rental rates remain slow to adjust to this new period of lower farm income.

The 2008 farm bill mandated that USDA’s National Agricultural Statistics Service provide mean rental rates for all counties with 20,000 acres of cropland plus pasture. USDA’s most recent survey of cash rents and annual Land Values summary indicated the average value of cropland in 2017 was unchanged from 2016 at $4,090 per acre. The value of farm real estate, a measurement of the value of all land and buildings on farms, averaged $3,080 per acre for 2017, up $70 per acre or approximately 2.3 percent from 2016.

While the average value of cropland and farm real estate did not decline, the U.S. average cash rent for non-irrigated cropland did decline. Non-irrigated cash rents averaged $123 per acre, down $2 per acre from 2016, and down $10 per acre from the record-high observed in 2015. Irrigated cropland rents averaged a record-high of $212 per acre, up $6 per acre from 2016. Combined, the U.S. average cash rent for cropland was $136 per acre, unchanged from 2016, but down $8 per acre from the record-high in 2015 of $144 per acre.

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Land Values Up 2.9% Since September 2016

According to the Iowa Realtors Land Institute’s latest survey, average land values across the state have increased 2% since March and are 2.9% higher since the September 2016 survey. However, the relative strength from neighborhood to neighborhood (or sale to sale) can seem somewhat inconsistent, depending on the strength of the local neighborhood.

Land sales activity (the number of farms for sale and sold) is beginning to pick up, as is typical around harvesttime. Strongest values continue to be in sales of top-quality farms with highly productive soils, solid fertility and drainage, and high “farm-ability” with large and square fields, few point rows, and few waterways, creeks and obstructions.

The current land market has offsetting factors at play, and additional clarity is likely with additional fall land sales results. For owners concerned about land values dropping in the future, now may be a logical time to consider selling, as a majority of farmland sales in any given year occurs following fall harvest.

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Interest Rates, Commodity Prices Pressure Farmers’ Operating Capital

The last three years have seen a worsening of the calculated creditworthiness of many farmer borrowers, says Mississippi State University’s Bryon Parman — this despite loan-to-value rates remaining relatively consistent and overall credit criteria not moving much.

“Much of the operating capital reserves built during the peak of the most recent agricultural cycle have been exhausted as banks and farmers look to equity as a means of collateralizing operating lines,” he says in a new report, Mississippi Agricultural Credit and Lending Conditions 20197, based on a survey conducted in June by the MSU Department of Agricultural Economics and the MSU Extension Service. Participants included agricultural lenders, appraisers, farm managers, and agricultural economists.

“New equipment purchases now require more operator cash input or other forms of collateralization, compared to four years ago when the equipment itself was collateral enough.” In other instances, he notes, where lenders “are apprehensive about offering a full complement of operating capital to some clients, agricultural input dealers are offering various forms of financing to cover the deficit.”

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Rubio, Nelson Push for Agriculture Help

U.S. Sen Marco Rubio, R-Fla., and U.S. Sen. Bill Nelson, D-Fla., want the federal government to quickly approve aid for farmers, small business and communities impacted by Hurricane Irma.

In a letter Wednesday to U.S. Secretary of Agriculture Sonny Perdue, the senators asked for “expedited consideration of any disaster declaration and assistance requests.”

Irma caused extensive damage to citrus crops and caused losses for other parts of the agriculture industry such as vegetable growers.

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Futurist Lays Out Vision for Agriculture

A man who calls himself a futurist envisions an agricultural sector with further automation, a renewed focus on data, and a complete transformation of the food production and delivery systems.

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Wanted: More Farm Bill Funding to Grow California Almond Industry

California’s largest specialty crop is looking to the next federal farm bill for assistance with trade, conservation bioenergy, technical assistance, and research.

Almond Alliance President Kelly Covello’s remarks to the U.S. House Committee on Agriculture outlined the value of the California almond industry and the unique needs of its producers.

California almond producers attending the farm bill listening session held at Modesto also emphasized the importance of crop insurance, Environmental Quality Incentive Program (EQIP) funding, and the Market Access Program (MAP).

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Pistachios Push Kern County Crop Values to No. 1

A record pistachio crop and a general downturn across much of the rest of California’s agriculture sector gave Kern County the push it needed to crack the top-spot among farm counties in the United States in 2016.

In short: Kern County is now No. 1.

In order, the top three are:

Kern County: $7,187,944,340 (up 6 percent)
Tulare County: $6,370,212,600 (down 8 percent)
Fresno County: $6,183,960,100 (down 7 percent)

Though these figures can sometimes become bragging rights for local officials – and certainly Kern will have them as this has never happened before – the real story isn’t in the total figure as much as it is in the trends reflective among California agriculture.

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Bayer-Monsanto Acquisition Closing Date Likely in Early 2018

Early 2018 is the intended closing date of the transaction between Bayer and Monsanto, according to the latest update from Liam Condon, Bayer Management Board member and President of Bayer’s Crop Science Division. That’s when the European Commission will likely give its final decision on Bayer’s proposed $66 billion acquisition of Monsanto.

At the Future of Farming Dialogue hosted by Bayer Crop Science this week in Germany, Condon said that Bayer on Monday filed an application to the European Commission to extend the review deadline by ten working days until Jan. 22, 2018.

While there isn’t much overlap between the two companies in terms of seed and crop protection sales, Condon said areas that do overlap are under discussion amongst regulators regarding which assets would be necessary divestments to move forward with the acquisition – and one likely area is seed traits with resistance to certain modes of action.

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Rural Mainstreet Index Slips to Lowest Level Since 2016

The latest Rural Mainstreet Index (RMI) is revealing a drop in farmers’ financial conditions, sinking to the lowest level since December 2016. The index remained below growth neutral, a sign that shows financial pressure continues to prevail on farms and ranches.

“We survey a 10-state region stretching from Colorado and Wyoming in the West, up to North Dakota and Minnesota in the North, over to Illinois in the east and down to Missouri in the South, said Ernie Goss, author of the RMI, which is a survey of ag bankers in those regions.

Despite the recent drop in livestock prices, a strong start to 2017 produced better than expected financial conditions. That means livestock producers are currently faring better than their row crop farming counterparts.

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Five Factors You Should Know About Bayer Crop Science

Bayer Crop Science executives gave members of the agriculture media an update of the German firm’s activities at this week’s 2017 Future of Farming Dialog at Bayer’s global headquarters in Monheim, Germany. Here are five factors on their minds.

1. Technology acceptance is the biggest risk Bayer Crop Science faces, says Adrian Percy, global head of research and development for Bayer Crop Science.

An example of this is the bans and/or restrictions on neonicotinoid seed treatments. (Bayer Crop Science manufactures and sells these.) Percy cites British farmers who struggled to control flea beetle outbreaks in canola. This was spurred by a 2013 temporary European Union (EU) ban on neonicotinoid insecticide seed treatments. (The EU is considering a total ban on these products.) Without neonicotinoid seed treatments, those farmers were left with ineffective pyrethroid insecticides

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Renegotiating NAFTA: Easier Said Than Done

When President Trump notified Congress he wanted to renegotiate the North American Free Trade Agreement last May, some may have assumed that he meant the agreement would be changed right away.

That won’t be the case, as John Gilliland, an attorney with the Akin-Gump law firm, explained in a presentation to the National Cotton Council’s Board of Directors at their mid-year meeting in late August.

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Nine Years After the Crisis, Fannie and Freddie Remain Unfixed

This month marks the ninth anniversary of the start of the Great Recession. And today, the U.S. economy still remains susceptible to a pair of major drivers behind that crisis: Fannie Mae and Freddie Mac.

As the crisis exhibited all too clearly, the government-sponsored enterprise duopoly system creates systemic risk for everyone, most notably to taxpayers, who have paid out trillions in bailouts. Congress must act to reform these two giant government-sponsored enterprises in order to prevent future taxpayer-funded bailouts and protect the savings of American families.

Fannie and Freddie do not make loans. Rather, they buy mortgages from banks. The transaction flushes capital back into the banks, allowing them to originate more mortgages.

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DowDuPont Revises it’s Future Plans

DowDuPont (NYSE:DWDP) today announced that its Board of Directors and management, with the assistance of independent advisors, have completed their comprehensive review of the portfolio composition of the three intended independent companies.

The Board unanimously concluded that, in light of knowledge gained since the announcement of the transaction, certain targeted adjustments will be made between the Materials Science and Specialty Products divisions, which will enhance the competitive advantages of the intended resulting companies. The changes better align these businesses with the end-markets they serve, ensuring clear focus, market visibility, targeted innovation and stronger growth profiles, and better equip each to compete successfully as industry leaders.

The DowDuPont Board of Directors approved the changes based on: a thorough review led by the lead independent directors, which included recommendations provided by McKinsey & Company; a comprehensive business and operational analysis leveraging knowledge gained over the past 20 months of pre-merger planning; and input from a wide range of stakeholders, including both investors and financial advisors.

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How Pheasant Hunting Can Save Rural Iowa, Farming and the Environment

Missouri Valley, Ia. — Clay Bowman expects a big harvest this fall among the Loess Hills and Missouri River bottomlands: a bounty of visitors wearing blaze orange and loaded with green.

“The word definitely got out this fall,” said Bowman, president of the Harrison County chapter of Pheasants Forever. He’s seeing dove and teal hunters from Nebraska, Missouri and Kansas, and he expects local hotels and restaurants to fill up when pheasant season starts next month. “The out-of-state money is what I like.”

The secret that’s attracting hunters to Harrison County is 4,300 new acres of grassland and other habitat on private land but open to public hunting. And it’s just a piece of a larger effort by groups like Pheasants Forever to restore Iowa’s once mighty bird populations — and create more habitat in a state ranked 49th in public land ownership.

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In Parched North Dakota, Cloud-seeding Irks Some Farmers

In the parched northern Plains, where the worst drought in decades has withered crops and forced some ranchers to begin selling off their herds, a cloud-seeding program aimed at making it rain would seem a strange target for farmer anger.

But some North Dakota growers are trying to end a state cloud-seeding program that’s been around for generations, believing it may be making the drought worse. Besides anecdotal accounts from decades of farming, they cite satellite images of clouds dissipating after being seeded and statistics over two decades that they say show less rainfall in counties that cloud-seed than surrounding ones that don’t.

“You watch the planes seed, you will see storms weaken,” said Roger Neshem, a 39-year-old farmer in the northern part of the state who is leading an effort to see if Mother Nature can do better on her own.

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Irma Took Cotton, and Analysis Reveals How Much

A recent analysis reveals how Hurricane Irma treated Georgia cotton.

Hurricane Irma blew into Florida Sept. 11 and moved rapidly north into Georgia cotton country with tropical storm strength, knocking lint to the ground and twisting and beating up fields.

“To varying degrees, it is safe to say that every cotton field in Georgia has been negatively impacted by Irma,” said Jared Whitaker, University of Georgia Extension cotton specialist, in an interview Sept. 19.

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Washed-out Florida Farms Show Limits of Crop Insurance

In the U.S, government-backed insurance plans help compensate farmers for losses after natural disasters. Unfortunately for the produce growers that were ravaged by recent hurricanes, a lot of the nation’s vegetable and fruit crops aren’t covered.

Hurricanes Irma and Harvey, which devastated parts of Florida, Texas and the Gulf Coast, also hit some of the nation’s least-insured crops, based on data the U.S. Department of Agriculture released in a report Wednesday. Nationwide, only 16 percent of peppers and 2 percent of strawberries, both key Florida products, are covered by insurance.

“Extreme weather events are coming more often, and farmers do need tools,” said Krysta Harden, a former deputy secretary of the USDA, who’s now the chief sustainability officer and vice president for public policy for the agriculture division of DowDuPont. “Crop insurance helps them deal with these extreme weather patterns. The need for it is increasing,” she said in an interview in New York.

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Welcome New Members

Thank you for being a part of ASFMRA! Help ASFMRA welcome our new members and thank them for choosing the Society as the organization that they desire to be affiliated with. ASFMRA continues to support rural property professionals and offers services, resources and education which will be of benefit to all of our members, both professionally and personally.

We are recognizing new members of the Society on a monthly basis. You may recognize your colleagues in the following list and we encourage you to welcome them into ASFMRA!

New Members
Joseph Chase in Fresno, CA (California Chapter)
Calvin Conroy with Titles of Dakota Appraisal Service in Rapid City, SD (South Dakota Chapter)
Adam Hansberger with Hansberger CPAs in Elgin, IL (Illinois Chapter)
Amanda Hernandez in Angels Camp, CA (California Chapter)
Daniel Rohrer with Homestead Land & Management Company, Inc. in Hickman, NE (Nebraska Chapter)
Jared Rounds in Rigby, ID (Idaho-Utah Chapter)
Jennifer Simmonson with CBRE, Inc. in San Diego, CA (California Chapter)
Vanessa Williams in Carbondale, IL (Illinois Chapter)
Donald Zacher with Ensz Appraisals, LLC in Spearfish, SD (South Dakota Chapter)

Share Your Experience – Make a Referral

You know first-hand what a great organization ASFMRA is and what it means to you both professionally and personally. Pass that benefit on to others that you know who would benefit from membership with The Most Trusted rural property professional organization – ASFMRA! Talk to those you know who would benefit from ASFMRA’s educational offerings, networking, and meetings. Let them know your experiences of being involved in this great association and some of the business contacts you have made along with lasting friendships. Your peers listed below have done just that! They spoke to individuals about ASFMRA and those individuals have now become members of ASFMRA!

Allan Barros, ARA
Wade Buck
Ronald Ensz, ARA
D. Matt Marschall, ARA
Kurt Rewinkel

Thank you to all who have referred someone and in some cases, more than one, to join ASFMRA.

Get Your Bid In!

Make sure you get your bid in for a chance to win the Golf Foursome in Savannah, Georgia with Stephen Frerichs! The lucky winner will play at The Club at Savannah Harbor and receive $100 to enjoy snacks and/or beverages at the Club House. What more can you ask for?

Place your bid now! This on-line opportunity ends on October 23, 2017 so the winner will have time to make plans to go to Savannah and enjoy golfing with Stephen Frerichs!

Step 1: Click on the link below
Step 2: Log-in or Create Your Account
Step 3: Confirm your information
Step 4: Enter your credit card
Step 5: Enter your winning bid!

Bid on the Golf-Foursome!

Good luck bidding!

Plan to Attend the 2017 Education Foundation Auction and Make Your Donation Now

The time is now to make your donation to the Education Foundation Auction. This fun, entertaining annual event at the Annual Conference supports a variety of projects such as the development of new educational offerings, rewrite of course material to continue to offer cutting edge education, and much more.

Mark your calendar now – November 16, 2017 in Savannah, Georgia and be part of this special event. Plans are being made and we need you to make the Auction a success again this year! We need your donations. The Education Foundation Auction’s success depends on you – ASFMRA members, Chapters, sponsors, exhibitors, and nonmember supporters.

Donations that have been made to the 2017 Education Foundation Auction include –
The Indiana Chapter has donated an Indianapolis 500 Racing package. You do not want to miss your opportunity to bid on this amazing package that includes everything that you will need to have an amazing weekend! The package has it all – includes two tickets for the 2018 Indianapolis 500 Mile Race weekend (May 25th through May 27th), two race day tickets located in the Paddock Grandstand where you will have a spectacular view of the Start/Finish, two tickets for admission to Miller Lite Carb Day (May 25th), two tickets for Legends Day (May 26th), two tickets for admission to the garage area immediately following completion of the race, and a three day auto parking permit!
Brian Gatzke, ARA has donated the Savannah Golf Foursome. Come play golf in Savannah with Stephen Frerichs plus receive $100 to spend in the Club House. Enjoy your round of golf at The Club at Savannah Harbor. This Golf Foursome may be redeemed either before or after the ASFMRA Annual Conference (valid until April 8, 2018). Don’t forget – You can place your online bid on this item NOW! Bid on the Golf-Foursome!
Roos & Associates, Inc. has donated a Quilt that you will want to take home with you! This is a farm theme Queen/King sized quilt made by Pat Roos. This quilt will keep you warm on the cold nights and keep you feeling nice and snug. You will have a difficult time sharing this quilt with your family.
The Missouri Chapter has donated a Charlie Daniels Autographed Fiddle. Don’t miss out on this one! A beautiful red/white/blue fiddle signed and authenticated by Charlie Daniels. This also comes with a Charlie Daniels Band CD, padded case, certificate of authenticity, and a signed photograph of Charlie Daniels. What a fantastic gift or collector item for any music lover!
The Northeast Chapter has donated a Frederick Remington Bronze “The Mountain Man”. This depicts one of the old Iroqouis trappers who followed the fur companies into the Rocky Mountains. The sculptor chose a dramatic episode in the daily life of a trapper and his mount’s decent on an almost vertical slope. Once you see this, you will want to make sure you take this home with you!

Make your tax deductible donation to the Education Foundation Auction today by simply completing the donation form. Return the completed form directly to Hope Evans via email at: hevans@asfmra.org or fax at: 303.758.0190.

Make your commitment for Auction items by October 23, 2017. Auction items should be shipped directly to the Westin Savannah Harbor Golf Resort and Spa to arrive no later than Tuesday, November 14, 2017. Please do not send your Auction items to arrive at the hotel more than three (3) days in advance – not to arrive before November 10, 2017 – due to the cost the hotel charges for storage.

If you have any questions concerning donations, contact Hope Evans directly at: 303.692.1216 or hevans@asfmra.org. THANK YOU for your generous donations and continued support.