ASFMRA Weekly News, February 14, 2017

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 Fewer Farms Sold: Interest High, But Sales Slow in Buying Farmland

Farmland buying interest is strong among outside investors but current land values are not yet cheap enough for most investors to lay their money down, said Steve Bruere whose firm, Peoples Company, hosted its 10th Annual Land Investment Expo with over 700 participants from 30 states recently.

“Investors would prefer to get a 3.5% return or more (for example, $350 per acre rent on $10,000 per acre land). At a 4% return, we could sell farms all day long. However, the farmland market right now is closer to a 3% return,” Bruere explained.

At a recent strong land auction in December, outside investors bought two parcels (38 acres and 153 acres) in Guthrie County in central Iowa for $11,900 per acre and $11,600 per acre. Kyle Hansen with Hertz Farm Management estimated those high-quality farms (yielding 190 to 200 bushels per acre of corn) could rent for $275 to $300 per acre (earning 2.5% to 3% return). Full article.

More Somber News for Land Values

Three Federal Reserve Banks that cover a large portion of the country say persistent weakness in farm income is reflecting in farmland values.

In the Corn Belt’s core, the Chicago district shows “good” farmland values in the fourth quarter of 2016 were down 1 percent from the third quarter. It’s also down 1 percent year-over-year, which is a smaller decrease than the previous two years.

In the St. Louis district, which covers the southern Midwest and South, quality farmland values during the fourth quarter of 2016 were 8 percent lower than they were during the fourth quarter of 2015. Ranch land or pastureland values were 3.5 percent lower than a year ago. Cash rents on ranchland are more than 11 percent lower.

In the Kansas City district, which covers the Great Plains to the Rockies, non-irrigated farmland values dropped 6 percent. Ranchland is off 7 percent from 2016. Cash rents for ranchland are down 12 percent. Depending on the region, some prices are holding. Watch the video.

Lesson #1: Every Farm Bill is Unique – The Last One Was a Doozy

The process for writing what was expected to be the 2012 farm bill started in a fairly routine way: staff discussions, member meetings and hearings to gather input from farmers and consumers.

Rep. Collin Peterson, D-Minn., chaired the House Agriculture Committee at the time and kicked off a series of field hearings on April 23, 2010, in Pennsylvania, listening to farmers and agribusiness leaders with a primary focus on one of his favorite topics: dairy policy.

Ranking Member Frank Lucas, R-Okla., described that hearing as “two-and-a-half hours to kick off two-and-a-half years.”

Sen. Blanche Lincoln, D-Ark., chaired the Senate Agriculture Committee and officially started farm bill work with a June 30, 2010, hearing in Washington, titled: “Maintaining Our Domestic Food Supply through a Strong U.S. Farm Policy.”

Just six years earlier, Lincoln had won her second Senate bid by 56 percent to 44 percent, even as Republican President George W. Bush carried her home state with 54 percent of the vote.

But by the 2010 mid-term elections, the politics in her historically “blue” state had changed rapidly. The Tea Party wave – concerned about the federal deficit and upset with President Barack Obama – was rolling across Arkansas. See why.

Bringing Coconut Farmers Into the 21st Century Through Mobile Agriculture

Salt. The soil needed salt. And not just a sprinkling, but up to two kilograms, applied in a shallow trench encircling each aging coconut tree where the outer leaves cast their shadow when the sun was overhead.

Marcelina Lastimosa learned the technique from an agriculturalist, Joraphel Tingcayao, who shared advice as she collected data on her tablet. Within 30 minutes, Ms. Tingcayao had a complete picture of the farm itself and the farmer’s practices, finances, environmental conditions, and key vulnerabilities. That data will feed in to the FarmerLink program in the Philippines, an ambitious, digitally connected program to help rural coconut farmers overcome the obstacles that keep them poor despite their greatest efforts.

Like the Philippines’ 3.5 million coconut farmers, smallholder farmers across Asia and Sub-Saharan Africa produce as much as 80 percent of the food supply, but their significance to food security was largely unnoticed until soaring food prices in 2008 put agriculture at the fore of the global development agenda. Learn more.

This Drone Operator is Helping Power Companies Mechanize Their Most Dangerous Jobs

Industrial technology has often been a blessing and a curse for workers, eliminating some jobs while making others safer.

That could soon happen at AES Corp., an Arlington-based power utility that generates $15 billion a year in sales powering homes in 17 countries. The company is moving to replace much of its high-risk maintenance work with a massive fleet of surveillance drones coordinated by Measure, a D.C.-based commercial drone operator.

For companies that own and maintain energy infrastructure, workplace injuries are a serious concern. The Occupational Safety and Health Administration (OSHA) recorded 35 deaths last year from workers who were electrocuted while working on or near power lines, and more than 300 who died in falls of various sorts.

In place of sending people to climb power lines or work atop scaffolding, AES is increasingly employing drone pilots to take close-up videos from the safety of a computer screen. See how.

Army To Allow Completion of Dakota Access Oil Pipeline

The Army told Congress on Tuesday that it will allow the $3.8 billion Dakota Access oil pipeline to cross under a Missouri River reservoir in North Dakota, completing the disputed four-state project.

The Army intends to allow the Lake Oahe crossing as early as Wednesday, according to court documents the Justice Department filed that include letters to members of Congress from Deputy Assistant Army Secretary Paul Cramer.

The stretch under Lake Oahe is the final big chunk of work on the 1,200-mile pipeline that would carry North Dakota oil through the Dakotas and Iowa to a shipping point in Illinois. Developer Energy Transfer Partners had hoped to have oil flowing through the pipeline by the end of 2016, but construction has been stalled while the Army Corps of Engineers and the Dallas-based company battled in court over the crossing. See how large the project is.

How Trump’s Immigration Policies Could Nearly Double the Price of Milk

President Trump’s plan to build a border wall between the United States and Mexico is a bad idea for many reasons, from insulting a close trading partner to harming migrating wildlife to the fact that the wall won’t actually improve current border defenses.

According to a 2009 study conducted by the Migration Policy Institute, a nonprofit independent think tank, 97 percent of undocumented migrants are still able to make it into the United States, even with walls constructed at various points along the border. “There is no barrier known to man that will stop someone who has traveled hundreds of miles to feed his family,” a border patrol agent told the Daily Beast. “He will go over, under, or around anything you put up.”

But let’s say Trump’s wall does get built and it succeeds in preventing illegal immigration along the Mexican border. And say he also goes through with his plan to deport millions of undocumented immigrants already in the U.S. One of the biggest impacts will be seen on America’s farms, and consequently, Americans’ dinner tables. According to the U.S. Department of Labor’s National Agricultural Workers Survey, between 50 and 70 percent of farmworkers in the the nation are undocumented. Based on these estimates, between 1.2 million to 1.75 million farmworkers are undocumented. These workers pick the vast majority of produce grown in the United States. Read more.

Washington Week in Review: Slowly Stocking the Cabinet

The senate is slowly working its way through President Trump’s Cabinet picks, and there’s no news on when USDA might get its new leader. Watch the video.

California Milk Marketing Order Proposed

California dairy farmers will be closely examining the Agricultural Marketing Service’s newly announced proposal to establish a Federal Milk Marketing Order (FMMO) in their state.

“We’re excited to see it hit the street and have started reviewing it,” said Kevin Abernathy, director of regulatory affairs for the Milk Producers Council, which represents California dairies. But he noted, “It’s a long process.”

California is the largest milk-producing state, accounting for about 20 percent of milk in the nation, AMS said. But it’s alone among large dairy producing states in not being part of a FMMO. 

AMS announced the proposal, which will be published in the Feb. 14 Federal Register. A hearing is set for Feb. 22 in Clovis, Calif.

In the proposal, AMS said the FMMO “would promote more orderly marketing of milk in interstate commerce.”

Milk prices under the recommended order “would reflect national prices for manufactured products and local prices for fluid milk products, fostering greater equality for California producers and handlers in the markets where they compete,” the AMS proposal says. “Under the recommended order, handlers would be assured a uniform cost for raw milk, and producers would receive uniform payments for raw milk, regardless of its use.” Learn more.

Mexico Readies to Revise NAFTA

Mexico’s government began a formal 90-day consultation process with the nation’s business community that’s needed before the start of talks to revise NAFTA and must be prepared for all scenarios, the country’s top diplomat said. Foreign Relations Minister Luis Videgaray on Wednesday said his visit to Washington last week was to lay the groundwork for collaboration with President Donald Trump’s government and not to negotiate details of trade for any specific industries. Talks will begin in May, and Mexico also will work to diversify its relationships, seeking to reach free-trade agreements with partners from the Trans-Pacific Partnership agreement who aren’t already covered by bilateral deals, including Australia, New Zealand, Malaysia and Singapore, Videgaray said.

Mexico’s government will speak with representatives from industries such as agriculture, auto manufacturing and textiles about the North American Free Trade Agreement’s impact over the past two decades as the U.S. goes through a similar process, Videgaray said. President Enrique Pena Nieto’s administration continues to expect a positive outcome from talks with the U.S. on areas from trade to security and immigration and took some positive signs from last week’s meetings despite Trump’s insistence that Mexico pay for a border wall and the cancellation of a sitdown between the leaders, Videgaray said. Full article.

The Next Agriculture Secretary Could Be Great for Agribusiness

President Trump finished with all his appointments for Cabinet nominations in late January 2017, and recently selected former Georgia Governor Sonny Perdue to be the Agriculture Secretary. Trump indicated that Perdue would excel at his role due to his background. Perdue grew up on a farm and served as a governor of a large agriculture state, and he has a firm grasp on solving problems that U.S. farmers face today.

Prior to serving as a governor to Georgia, Perdue had a career in the agriculture business, and he’s looking to guarantee American producers aren’t at a disadvantage to international agreements. This is great news for the agricultural business. Additionally, Perdue earned his Doctor of Veterinary Medicine and has vast knowledge of the agriculture business. Consequently, President Trump’s selection of Perdue could be great for the industry. Find out who.

Glueck to Head Senate Ag Committee Staff

Joel Leftwich is stepping down as majority staff director for the Senate Agriculture Committee and will be replaced by James Glueck, a senior policy adviser for the panel who has experience at the Agriculture Department and in the private sector.

Leftwich, a longtime aide to Chairman Pat Roberts, R-Kan., and a former top lobbyist for PepsiCo, is leaving the committee staff later this month to pursue other interests.

“Joel Leftwich has been a trusted and valuable advisor,” Roberts said in a release. “He fought for farmers and ranchers and achieved bipartisan success on problems many thought had no solution. He has honorably served agriculture and the Senate with distinction, and I wish him well in his future endeavors.”

Glueck, a native of Canyon in the Texas Panhandle, grew up on a chicken and peanut farm. He has been on the committee staff since March 2013. He served as deputy staff director and policy director when the committee was under Democratic control from 2013 to 2015.

“James Glueck is experienced in both the Senate and in agriculture policy,” Roberts said. “He accepts the responsibility for running the Committee staff at a critical time as we begin to consider the next Farm Bill. I am confident he will carry on the Committee’s focus on the farmer and rancher and put their needs first.”

Glueck went to work at USDA in 2002 as a confidential assistant at the Farm Service Agency and served in several other positions before becoming senior adviser for farm and foreign agricultural services at USDA in April 2007. Full article.

The ASB Addresses February Q&A’s 

The Appraisal Standards Board has issued the February Q&A’s for the 2016-17 edition of USPAP on the disclosure of prior service involving a partnership and for multiple assignments on a property. See full 2016-17 Q&A.

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! See all new members.

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! See new referrals.

Thank You For Your Generosity

The Education Foundation and ASFMRA wish to send a big THANK YOU to all of those who have made memorial donations. With support from these members, Chapters, other members, and companies, the Education Foundation (a non-profit organization) develops educational programs for professional advancement. Informative programs to increase awareness of the role agricultural consultants, rural appraisers, farm managers, and review appraisers have in agriculture, rural economy, and public policy is also provided by the Foundation. The generosity of these members and their continued interest and support of the Foundation is very much appreciated. See list of donors.