ASFMRA News January 10, 2017

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CRP Contracts Can Be Terminated Early to Transfer Property, USDA Says

Beginning Jan. 9, 2017, USDA will offer an early termination for certain Conservation Reserve Program contracts to make it easier to transfer property to the next generation of farmers and ranchers, including family members.

The land that is eligible for the early termination is among the least environmentally sensitive land enrolled in CRP. “The average age of principal farm operators is 58,” said Agriculture Deputy Undersecretary Lanon Baccam. “So, land tenure, succession and estate planning, and access to land is an increasingly important issue for the future of agriculture and a priority for USDA. Access to land remains the biggest barrier for beginning farmers and ranchers. This announcement is part of our efforts to address some of the challenges with transitioning land to beginning farmers.”

Normally if a landowner terminates a CRP contract early, they are required to repay all previous payments plus interest. The new policy waives this repayment if the land is transferred to a beginning farmer or rancher through a sale or lease with an option to buy. With CRP enrollment close to the Congressionally mandated cap of 24 million acres, the early termination will also allow USDA to enroll other land with higher conservation value elsewhere. Read more.

Wisconsin Farmland Values Steady as Midwest Sees Declines

Wisconsin farmland’s value remained steady in 2016, unlike the rest of the Midwest. Nearly every state in the region saw decreases to farmland values last year because of low commodity prices, Wisconsin Public Radio reported. Iowa’s land values fell for the third year in a row, an issue the state hasn’t encountered since the 1980s. But Dennis Badtke, chief appraiser from Badgerland Financial, said Wisconsin land prices are surprisingly strong because people still have enough money and borrowing capacity.

“We’re looking at land values and are really surprised to see that land values have held as well as they have considering what’s happened to commodity prices,” Badtke said. Farm appraiser Arlin Brannstrom said Wisconsin’s diverse agriculture industry makes it more resilient to the impact of low prices.

“Wisconsin is a little bit different than most of the rest of the Corn Belt in terms of the dependence on row crops only,” Brannstrom said. “We grow a lot of alfalfa crops, we have a lot of farms that are using livestock and are dependent on having enough acreage to dispose of their animal nutrients.”

He said the state could see land decrease in value this year as rental rates decline and higher interest rates make loans less attractive. Read more.

Ag Cooperatives Post Record Net Income

USDA recently released its annual report on cooperatives, saying the nation’s top 100 co-ops again set a record for net income in 2015. USDA says Iowa has more co-ops than any other state. As a member of my local co-op, I’d like you to please explain this report.

Answer: Net income for the nation’s agricultural cooperatives soared by 14% last year, according to data released Oct. 5 by USDA. In its annual report on national cooperative business sales, USDA reported that the country’s farmer, rancher and fishery co-ops posted record net income of $7 billion in 2015.

Co-ops designed to allow farmers to share in profits

“The cooperative business model continues to perform strongly,” Agriculture Secretary Tom Vilsack said. “While the model has long been one of the hallmarks of rural economies, its reach has greatly expanded to include almost every aspect of U.S. commerce. The latest data show cooperatives are a key to building stronger and more vital communities, particularly in rural areas.”

Sam Rikkers, administrator of USDA’s Rural Business-Cooperative Service announced the top 100 ag cooperatives at an Interagency Working Group on Cooperative Development meeting at the Department of Commerce. The group, led by USDA, was established to foster cooperative development and ensure coordination between federal agencies and national and local organizations. Learn more.

Regulations, Election, Merger Define 2016 for Farmers

A presidential election, bumper crops, low commodity prices, and a merger of major ag companies are among news developments that affected agriculture in 2016.

Low prices dampen region’s big yields helping balance the low commodity prices, it was a bin buster of a year for corn and soybean growers through much of Illinois, Iowa and Missouri.

“The yields we have in 2016 absolutely helped get us through this year,” said Mike Hein, vice president of Liberty Trust & Savings Bank in Durant, Iowa.

In Illinois, many farmers harvested their best yields ever. Fairmont farmer Lyn Rohrscheib, whose family farms 7,500 acres in eastern Illinois, reported soybean yield averages in the high 70s. Many Illinois corn growers also had record yields.

In both states, however, there were areas where weather conditions, especially flooding, pushed yields downward.

As Iowa’s average corn yields surged toward a record high in USDA’s estimates, seed performance tests showed yields higher and lower than last year.

In Missouri there was some wacky weather throughout the season that drew down yields in some areas, but farmers were sometimes surprised how good yields were, including E.L. Reed of north central Missouri, whose soybeans averaged 50 to 60 bushels per acre. Likewise, corn yields were good.

“Everybody seemed surprised by the yields. Everybody’s happy with that,” Reed said of farmers in his portion of Missouri. Full article.

Still No Ag Secretary as 115th Congress Kicks Off

Lawmakers returned to Washington this week, but the expected announcement of the next agriculture secretary is still to come. Agri-Pulse’s Phil Brasher and Spencer Chase have more. Watch the video.

Three Areas Ripe for Private Sector Investment in Land, Water and Wildlife

By this time next year, I believe we’ll reflect back on 2017 as the year that the private sector stepped up to protect our land, water and wildlife for future generations.

I believe this because major retailers, food companies, agricultural businesses and farmers laid the groundwork in 2016, making sizeable commitments to reduce greenhouse gas emissions (GHGs), improve water quality and conserve habitat for imperiled wildlife.

President-elect Trump has made political theater by threatening to kill the regulations that protect our nation’s air and water. But in the real world, the private sector is going the other direction. Forward-thinking businesses are rolling up their sleeves and finding ways to make those regulations work better by accelerating the uptake of practices that are good for the planet and the bottom line. Full article.

Trump Advisor Rastetter Wants Mega-Mergers, Like DuPont Dow, Blocked

Bruce Rastetter, an Iowa entrepreneur and ag adviser to Donald Trump, wants the president-elect to block pending mega-mergers like the $130 billion marriage between DuPont, parent of Iowa-based Pioneer, and Dow Chemical Co.

Rastetter, CEO of Iowa-based Summit Agricultural Group, said he’s concerned a raft of mergers will “limit competition, stifle innovative research and stunt job growth,” eventually leading to increased costs for farmers.

Giant mergers expected to close this year — Bayer AG and Monsanto, China National Chemical Corp. and Syngenta AG, as well as Dow Chemical and DuPont — are especially concerning, Rastetter said, since they propose combining seed and chemical companies.

“It’s clear that the motivation behind the mergers is to increase prices and production costs for producers,” said Rastetter, a leading Republican donor in Iowa and president of the state’s Board of Regents, which governs public universities. “Simply put — this would be bad for every farmer on the planet.” Full article.

Ag at Large: New Water Bill Holds Promise for California Agriculture

The $10 billion Congressional water bill approved in December which transfers federal control of some water supplies in California to water authorities at the state level and provides funds for some badly needed structures is being applauded by farmers both north and south.

President Obama signed the bill Dec. 16.

Sweeping victories by Republicans in the November elections which gave them majorities in the U.S. House and Senate as well as the presidency have brought dramatic changes in the ways California’s water resources – much of them stored or conveyed in federally financed structures – will be allocated.

The persistent preference by Democrat representatives in Washington for federal control of the state’s water supplies was displayed by a petulant Sen. Barbara Boxer as the current bill was considered and passed. Her opposition to the bill and its support for state’s rights was bitter and outspoken, coinciding with announcement of her retirement.

On the other hand Democrat Senator Diane Feinstein, co-author of the bill, adopted a more reasonable stance in recognition of the state’s farm community’s persistent requests for action to channel more of the state’s water supplies to irrigation and agricultural use. Environmental interests have instead insisted on releasing vast amounts to run freely to the ocean. Learn more.

Agricultural Careers are on the Rise

The field of agriculture continues to grow and innovate along with the times, but the biggest change may be the increased use of technology.

Brian Leake, manager at Monsanto Agriculture store, explains how technology affects the business in several ways.

“Ag is becoming more and more technological and needs a broad range of skills including majors like computer science, biochemistry, engineering, and even communications,” Leake said.

The USDA released a study in 2015 that states there will be about 60,000 ag related job openings every year for at least the next five years, but only about 35,000 students will be graduating with related degrees.

Haley Hampton, education specialist for national FFA organization, says the decrease of degrees in the field could be because students are unaware of the opportunities.

“It’s actually a little scary that so few students actually know about the different careers in agriculture,” Hampton said.

The growth in human population and decrease in some natural resources has lead to technology becoming an important aspect. Watch the video.

Monsanto Swings to Profit as Bayer Deal Advances

Monsanto Co. returned to profitability in its latest quarter as executives said its planned $57 billion sale to Bayer AG remains on track.

The biotech seed developer said expanded South American corn planting and currency shifts helped deliver bigger-than-anticipated profits, though not enough to raise its longer-term earnings forecast.

Monsanto and other sellers of seeds and pesticides have struggled against a multiyear slide in the prices of major crops like corn and soybeans, which has slashed farmers’ incomes and forced them to scrutinize spending on farm supplies.

The slide has played into a wave of consolidation among the half-dozen conglomerates that dominate the global seed and crop chemical business, including Monsanto’s agreed sale to Bayer, which Monsanto investors blessed in December.

“With the vote behind us, our team’s working with Bayer on required regulatory filings and key stakeholder outreach,” said Hugh Grant, Monsanto’s chief executive and chairman, on a conference call discussing the company’s quarterly results Thursday. The companies submitted notice of the merger plan to U.S. antitrust officials and will file documents to the European Union by the end of March, he said. Read more.

Ethanol Increasingly a Stabilizing Factor for Iowa Farmers’ Income

At a time when Iowa farmers produced a second consecutive record corn crop amid falling prices for their commodity, the state’s growing ethanol industry remains a stabilizing factor.

National crop production reports released in mid-December showed Iowa corn production in 2016 at 2.69 billion bushels, up from 2.51 billion bushels in 2015. But average statewide corn prices fell from $3.37 to $3.01 per bushel from November 2015 to November 2016.

Brian Cahill, president and general manager of the Southwest Iowa Renewable Energy ethanol plant south of Council Bluffs, said that without SIRE and the 42 other ethanol plants in Iowa, prices would be even lower.

“Without ethanol,” he said, “farmers would be hurting. We’re a steady buyer.”

SIRE purchases 40 million to 50 million bushels of corn annually, more than 125,000 bushels daily – roughly 40 percent of the corn produced within a 75-mile radius of the Council Bluffs plant. Now paying about $3.20 per bushel, Cahill said SIRE pays between 10 to 15 cents more per bushel than offered by most elevators. Learn more.

U.S. May Become a Net Energy Exporter in Less Than a Decade

The U.S. could become a net energy exporter in less than a decade, according to an annual report by the U.S. Energy Information Administration released Thursday.

The report offered updated projections for the domestic energy markets through 2040, but also offered tables on its website with projections through 2050 for the first time, based on various economic, oil price, technological and clean-energy scenarios.

“EIA’s projections show how advances in technology are driving oil and natural gas production, renewables penetration, and demand-side efficiencies and reshaping the energy future,” EIA Administrator Adam Sieminski said in a statement.

Under the EIA’s base case, which assumes a trend improvement in known technologies and reflects the central views of leading economic forecasters, the U.S. could become a net energy exporter by 2026. The country has been a net energy importer since 1953. Learn more.

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. Read the list.

Insights on 2017 from ASFMRA Members

To put that forecast into perspective, we asked four ASFMRA farm managers for their thoughts about 2017 farm profitability and the outlook for rents. These farm managers believe their strategies and farm operating budgets moving forward will keep 2017 cash rents steady overall for landowners. Read their insights.

2016 Education Foundation Auction – Another Success Thanks to You!

WOW! What a great, successful, and fun event we had at the 2016 Education Foundation Auction in Indian Wells, California. Thanks to all the donors, buyers, and supporters. You are the ones who make this event a success.

If you were not able to attend this year, you really missed out on some great items, fun times with meeting up with old friends, bidding wars, and more. Take a look at some of the items that were donated this year by reviewing the Auction Items Program Guide by simply clicking here – Auction Items Program Guide.

Make sure to plan to attend the Auction next year in Savannah, Georgia so you don’t miss out on the great, fun, yummy items that are sure to be available. We look forward to seeing you there! Total numbers.

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! Learn more.

The Appraisal Foundation Seeks Candidates for Vacancies on the Board

The Appraisal Foundation is searching for qualified candidates to serve on its Board of Trustees (BOT). The BOT is the governing body of The Appraisal Foundation and works to promote professionalism and ensure public trust in the valuation profession. Application for candidates.