Weekly AgNews – August 29, 2017

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Work On New Farm Bill May Last Into 2018

U.S. House and Senate lawmakers are still months away from passing a new Farm Bill. The legislation, which governs an array of federal agricultural and food programs, is set to expire in 2018.

Sen. Pat Roberts of Kansas is the chairman of the Senate Committee on Agriculture, Nutrition and Forestry. That committee and the House Committee on Agriculture are currently working to rewrite the Farm bill.

Roberts says his goal is to get the bill passed in October, or at the very latest, early next year.

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Crop Insurance Key

MINNEAPOLIS — Crop insurance is the No. 1 priority in a new farm bill, farmers and others told Rep. Roger Marshall, R-Great Bend, during a meeting in Minneapolis on Wednesday.

“How hard would it be for your bank to give a loan to a young producer without crop insurance?” Marshall asked Tom McGavran, community bank president for Citizen’s State Bank and Trust Company. “If they refused crop insurance, would you give them a loan?”

“No,” McGavran said. “The regulators would consider that an unsecured loan. ”

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Freddie Mac Introduces Innovative Appraisal Alternative for Home Purchases and Refinances

MCLEAN, VA–(Marketwired – Aug 18, 2017) – Freddie Mac (OTCQB: FMCC) announced today that consumers who are buying homes or refinancing existing mortgage loans may be eligible for an automated appraisal alternative. Borrowers may be able to realize savings in some instances of approximately $500, and closing times may be reduced by as many as seven to 10 days in cases where Freddie Mac’s innovative new capability determines a traditional appraisal isn’t needed.

Freddie Mac’s automated collateral evaluation (ACE) assesses the need for a traditional appraisal by leveraging proprietary models and using data from multiple listing services and public records as well as a wealth of historical home values to determine collateral risks.

“By leveraging big data and advanced analytics, as well as 40+ years of historical data, we’re cutting costs and speeding up the closing process for borrowers,” said David Lowman, executive vice president of Freddie Mac’s Single-Family Business. “At the same time, we’re providing immediate collateral representation and warranty relief to lenders. This is just one example of how we are reimagining the mortgage process to create a better experience for consumers and lenders.”

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Negative Cash Rent Farmland Returns Since 2014 Reduced Farmer Net Incomes

In recent years, many farmers have had positive incomes. However, cash rented farmland may not have been contributing to those positive net incomes. At average cash rent levels, cash rented farmland has reduced farmer net incomes in 2014 and 2015. Often, positive returns from owned and share rented farmland offset negative returns from cash rented farmland. Herein, returns to owned, share rented, and cash rented farmland are quantified after background information is presented.

Background

Average net incomes on Illinois grain farms has fallen since setting an all-time high in 2012. Incomes have been lower since 2012, but average incomes have been positive in all years except 2015 (for more detail see farmdoc daily, August 15, 2017).

At the same time incomes have been positive in most years, farmers often have had negative returns on cash rented farmland. Figure 2 shows operator and land returns, which equal gross revenue minus non-land costs, and represent the return that can be split between the farmer and land owner. Cash rent is the payment to landowners when farmland is cash rented. If cash rent exceeds operator and farmland return, then the farmer is generating a negative return. As can be seen in Figure 2, cash rent exceeded operator and farmland returns in 2014 and 2015, generating negative returns to farmers. Moreover, farmer returns are projected negative in 2017 and 2018 (for more detail, see farmdoc daily, August 8, 2017).

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Not as Much Room to Renegotiate Cash Rent for 2018

Iowa State University Extension farm management specialists are holding meetings across Iowa in August to discuss farmland leasing issues with farmers and landlords. The meetings are held each year to prepare for the Sept. 1 deadline for providing a written notice if you want to terminate your lease for the coming crop year. That deadline to give the other party such notice is set by Iowa law.

One of the key topics covered at this year’s meetings involves farmers renegotiating cash rents with landlords. Cash rental rates for cropland have declined in each of the past four years and are likely to stabilize in 2018. The expected stabilization in cash rental rates will put added economic pressure on farmers coping with continued low commodity prices.

“Farmers who rent land are probably going to have to find other ways to reduce costs than just renegotiating cash rental rates,” says Steve Johnson, ISU Extension farm management specialist in central Iowa. “Many landlords have already adjusted the cash rent downward. And the demand for rented land continues strong. I don’t see much more room to adjust rental rates for 2018, with the demand there is for rented land.”

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How Big? A Look at the Size of Beef Operations in the U.S.

The most discussed trend in U.S. agriculture is likely the declining number of U.S. farmers and ranchers. Combined with ever-growing global demand, this has led to larger U.S. farms and ranches over time. With operations expanding, many wonder just “how large” farm and ranch operations have become.

To understand the question a bit more, this week’s post looks at the distribution of U.S. beef operations. In doing this, USDA Census of Agriculture data were considered. Throughout this post “cows” will be used to describe the USDA’s specific data category of “cows and heifers that have calved.”

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Rain and Flooding From Harvey Likely to Disrupt Wheat Exports

Flooding from Tropical Storm Harvey, the most powerful storm to strike the U.S. as a hurricane in more than a decade, will disrupt wheat shipments from the ports of Houston and Corpus Christi, says Ben Scholz of the Texas Wheat Producers Board. Scholz told Bloomberg that most of the Texas wheat crop was not affected by Harvey but exports could suffer.

Ports on the Texas Gulf handle a quarter of U.S. wheat exports and only small amounts of U.S. corn and soybean shipments. Ports in Louisiana are the outlets for roughly six of every 10 bushels of corn and soybeans. If rainfall and flooding from Harvey interferes with Mississippi River ports, it could slow down the movement of corn and soybeans to overseas markets.

Scholz says cotton and soybeans were the crops most at risk from Harvey. Texas is the No. 1 cotton-growing state, forecast to harvest 8.8 million bales of the estimated U.S. crop of 20.5 million bales.

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USDA Offers Assistance to Hurricane Harvey Victims

The U.S. Department of Agriculture (USDA) offers programs that provide assistance before, during and after disasters. USDA staff in the regional, state, and county offices in Texas and Louisiana are ready to help.

“American farmers and ranchers can handle adversity, and USDA is here with resources so they don’t have to go it alone. Our thoughts and prayers are with those affected by Hurricane Harvey, and USDA stands with them and is ready to assist in any way we can. We have USDA employees in every county in this nation, and our people can help with a variety of services that may be useful in natural disasters like this one,” said Agriculture Secretary Sonny Perdue.

USDA’s Operations Center is activated 24/7 keeping the Secretary and USDA’s leadership team informed. An Incident Management Team will remain in effect thorough the incident.

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Analyst Calls Midwest Crop Tour Findings Mixed For Markets

A market analyst calls findings from the Midwest Crop Tour mixed.

Naomi Blohm says the industry was looking for more of a triumphant, ‘see I told you that crop wasn’t there’ type of reaction, and we didn’t quite get it.

She tells Brownfield expectations of substantially lower yield projections along the tour might’ve been unrealistic.

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2017 Education Foundation Auction

Thank you to everyone who has already donated an item to the 2017 Education Foundation Auction! We need you to make the Auction a success again this year!

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 e-mail at: hevans@asfmra.org or fax at: 303.758.0190.

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.

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.

Since we have already received some great items let’s start the fun early and begin the bidding now! Brian Gatzke, ARA has donated a 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!

Let the bidding begin! 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 Now

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.