Weekly AgNews - July 18, 2017
Farmland Values Holding Steady in First Half of 2017
OMAHA — Farmland values largely held steady through the first half of 2017 in Grain Belt states served by Farm Credit Services of America (FCSAmerica).
Benchmark farm values overall remain unchanged in Nebraska and increased slightly in Iowa and Wyoming. South Dakota’s benchmark farm values inched down a moderate 1.8 percent. Meanwhile, in eastern Kansas, where FCSAmerica operates in alliance with Frontier Farm Credit, benchmark values were off about 3 percent.
FCSAmerica and Frontier Farm Credit monitor values on 71 benchmark farms. Where values declined, lower-quality land sales helped drive the market.
Farm Bureau Releases Farm Bill Recommendations
Last week the American Farm Bureau Federation (AFBF) released a letter addressed to the House and Senate Agriculture Chairs and Ranking members outlining its farm bill recommendations for the next farm bill. With regard to crop insurance, AFBF is largely looking to maintain the current program as is. Specifically, its recommendations are:
- the availability of crop yield and/or revenue insurance for all producers of all crops;
- continuation of the federal government financial support, at a percent not less than current levels;
- continuation of everyone being eligible for the program, regardless of size of the operation or payments; and the currently legislatively approved farmer premium discount schedule.
- We oppose premium discount caps, payment limits or means testing being applied to crop insurance;
- keeping the WFRP as a pilot program rather than making it a permanent federal crop insurance program;
- Increase the $20 million annual cap on livestock insurance products to $75 million annually.
Regarding Commodity Programs, AFBF recommends:
- Allow farmers to select the “higher of” the five-year Olympic Average yield for the Agriculture Risk Coverage County Program (ARC-CO) or a simple 10-year average yield.
- Increase the reference price used as the floor for the ARC-CO program by 5% for corn, soybeans, wheat, sorghum and other minor crops. Increasing the ARC-CO plug prices for corn, soybeans and wheat by 5% would mean ARC-CO floor prices of $3.90, $8.80 and $5.80 per bushel, respectively.
- Support a cotton lint program and/or designating cotton seed as an “other oilseed” to make cotton eligible for Title 1 commodity support programs.
Federal Reaction to Perceived Appraiser Shortage
The number of state licensed appraisers (not including state-certified) has declined significantly since 2008, falling from 30,286 in 2007 to just 7,176 in 2017. This drop-in state licensed appraisers resulted after 2008 when the Housing and Economic Recovery Act (HERA) required the Federal Housing Administration (FHA) to change its appraisal requirements to only accept appraisals from certified appraisers. As a result, state licensed appraisers could no longer appraise FHA back loans and the time and cost of additional certification drove some appraisers out of the industry, resulting in a possible shortage in some rural communities.
On May 31st , 2017 the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC) issued an Interagency Advisory highlighting two options that state and federal Institutions can use to address appraiser shortages, especially in rural areas. First, Temporary Practice permits can be issued to certified or licensed appraisers from other states. These permits allow appraisers from other states to temporarily provide valuation in states where they are not licensed. Second, Temporary Waivers can be granted by the Appraisal Subcommittee that waive certification or licensing requirements of appraisers in states or regions where there is a significant shortage of appraisers. The requesting party must show evidence of the shortage of appraisers in a specific geographic region. If granted, the requirement to use a certified or licensed appraiser on a federally related transaction would be waived for the requested geographic region, not just the individual who filed the request.
House Appropriations Passes FY 2018 Ag Spending Bill; Senate to Mark-up its Version
Last week the House Appropriations Committee passed its version of the FY 2018 agriculture spending bill. The Subcommittee had passed the bill before the July 4th recess (see last Weekly for details). No amendments related to crop insurance were offered. None of President Trumps budget proposals related to crop insurance are included.
The Senate will consider its version of the FY 2018 agriculture spending bill at the Subcommittee level this Tuesday at 10:30 am and at the full Committee level on Thursday at 10:30 am.
President Trump Nominates Steve Censky for USDA Deputy Secretary
Steve Censky, CEO of the American Soybean Association (ASA) has been nominated as the Deputy Secretary of USDA. The Deputy slot requires Senate confirmation. Mr. Censky has served as the CEO of ASA in St. Louis, Missouri since 1996 and prior to that served in the Reagan and Bush Administrations. Secretary Perdue to date is the only Senate-confirmed nominee at the USDA; other positions requiring Senate confirmation include the Undersecretary for Farm Programs, Risk Management, and Conservation. Iowa Secretary of Agriculture, Bill Northey is rumored to be under consideration for that position.
House Agriculture Committee Schedules Three Farm Bill Listening Sessions
The House Agriculture Committee has scheduled three more farm bill listening sessions. It previously held on in Gainesville, Florida. The upcoming sessions are: July 31 in San Angelo, Texas, August 3 in Morgan, Minnesota (Farm Fest) and August 5 in Modesto, California.
Work is Beginning on Federal Farm Bill
INDIANAPOLIS — Legislators may start writing the 2018 farm bill this fall, according to Mary Kay Thatcher, senior director of congressional relations at the American Farm Bureau Federation.
“The House Ag Committee is telling us that they plan to finish drafting the farm bill in the August recess this year,” she said. “If we want to give them ideas, we have to get to them before August.”
The Senate Ag Committee may be further behind because they are focused on hearings, she said.
Summer Heat Could Fire Up Corn Prices Despite Record Stocks
CHICAGO, July 12 (Reuters) – Global corn stocks may be at record highs, but rising demand is eating into the strength of the safety net, boosting the chances that any damage to the U.S. crop from a hot, dry summer could trigger further gains in prices.
The global stocks-to-use ratio – which shows how long the world would manage on just what is in storage – is heading for a five-year low, according to the U.S. Department of Agriculture (USDA). It is likely to be 16% at the end of this crop year on August 31 – enough to cover about two months of demand.
Bumper corn harvests since 2013 have managed to outpace demand and taken stocks to all-time highs, forcing farmers to store the grain in open fields and even on runways. Successive years of record crops have depressed corn prices, forced farmers into debt, and hurt grain traders.
Flinchbaugh Grades Trump on Ag
President Donald Trump’s performance for agriculture during his first six months in office is a mixed bag, according to Barry Flinchbaugh, professor emeritus, agricultural economics at Kansas State University. Flinchbaugh, an expert on agricultural policy who has contributed to the development of each farm bill since joining the KSU faculty in 1974, says Trump deserves an A for the appointment of Sonny Perdue as Secretary of Agriculture because of his intelligence and “he knows agriculture very well.”
Flinchbaugh, speaking at the Cattle Feeders Business Summit sponsored by Merck Animal Health in Denver, CO, said Perdue deserves credit for shaping the Trump administration’s view on issues such as trade and immigration.
“It would have been an absolute disaster to withdraw from NAFTA (North America Free Trade Agreement),” Flinchbaugh says. “The U.S., Mexico and Canada have all benefitted. NAFTA has resulted in a net job increase for the U.S., and Mexico and Canada are our top two customers. If we screw up NAFTA we run the risk of losing those customers to Brazil, Argentina and other countries.”
Dominion Energy to Build 2 Wind Turbines Off Virginia Coast
Dominion Energy announced Monday it is partnering with a Danish energy company to build two wind turbines off the Virginia coast, an effort years in the making that the utility said could lead to the development of a much larger wind farm.
DONG Energy will immediately begin design and engineering work on the Coastal Virginia Offshore Wind project, with the two six-megawatt turbines expected to be installed off Virginia Beach by the end of 2020, Dominion said.
The turbines’ 12 megawatts of generation is enough to power about 3,000 homes at full capacity, Dominion President and CEO Thomas Farrell II said at a news conference in Portsmouth. If the project is deemed a success, Dominion would move forward with developing an adjacent 112,800-acre site it leased in 2013 from the Bureau of Ocean Energy Management.
Whisky-Powered Car Makes its First Journey
The world’s first car powered by whisky has successfully completed its first test drive.
Any conventional petrol and diesel engine can be run on the biofuel, made from whisky residue. The biofuel, called biobutanol, is designed as a direct replacement for conventional fuels.
The car was, unsurprisingly, tried out in Scotland, the traditional home of the alcoholic privilege, with Edinburgh Napier University testing a standard Ford Focus using the whisky-residue based fuel last week.
Back to Normal?
Have you ever wondered what the “new normal” means? I think it’s another way of saying that things are heading south, back to some level that was considered “normal” at some point in time. Most of the time when I’ve heard the term used, it’s based on anecdotal evidence, which I find interesting. At the same time, I think being able to put some numbers behind it gives terms like the “new normal” a lot more credibility.
This is why I found an article in the Spring 2017 issue of Iowa State University’s Center for Agricultural and Rural Development (CARD) newsletter interesting. Entitled, “Four Reasons Why We Aren’t Likely to See a Replay of the 1980s’ Farm Crisis,” Iowa State ag economist Wendong Zhang, outlines “four economic and legal reasons why this farm downturn is unlikely to slide into a sudden collapse of agricultural markets.
You can read the entire article here, but speaking of numbers, I found the average percentage change in land, gross income and net income that Zhang helpful in understanding the major influencers of both the good times for ag and those not-so-good times.
The Appraisal Foundation Seeks Candidates for the Appraiser Qualifications Board and the Appraisal Standards Board
The Appraisal Foundation has begun its annual search for qualified candidates to serve on the Appraiser Qualifications Board (AQB) and the Appraisal Standards Board (ASB).
Background and Qualifications:
The Appraiser Qualifications Board (AQB) is responsible for establishing the minimum education, experience, and examination qualification criteria for real estate appraisers. Also, the AQB sets the minimum requirements for real estate appraisers to
maintain their state credential. The qualification criteria are the minimum criteria that real property appraisers must meet to become state licensed or certified. The AQB also sets the minimum requirements for personal property appraisers, and
adherence to the personal property criteria is mandatory for Foundation Sponsors who confer personal property designations. Familiarity with appraiser qualifications is a prerequisite of service on the AQB, and a minimum of ten years of appraisal
experience is required.
The Appraisal Standards Board (ASB) is charged with developing, interpreting, and amending the Uniform Standards of Professional Appraisal Practice (USPAP). Familiarity with USPAP is a prerequisite of service on the ASB, and a minimum of ten years of
appraisal experience is required.
The AQB and ASB have up to four face-to-face meetings per year. In-person meetings typically consist of 1½-days of work sessions and a ½-day public meeting. In months when the Boards do not meet in-person, they conduct web or teleconference meetings.
Individuals serving on the Boards are compensated for their time and are reimbursed for travel expenses. Those individuals selected for a position on the AQB or ASB will serve initial terms of one to three years commencing January 1, 2018.
The Boards Nominating Committee of the Board of Trustees is interested in business leaders from a variety of disciplines and background for positions on these Boards.
Application Deadline is August 21, 2017