Weekly AgNews – September 6, 2017

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Why Land Values Are Not Falling

Many signs pointed to a crash. Multiple years of low farm profitability, the upward trajectory of interest rates and a rise in farmers exiting the profession were just a few of the indicators suggesting farmland values would drop.

Yet that’s not reality. The average acre of U.S. cropland is worth $4,090, a level unchanged from 2016 and the third highest on record, according to USDA’s 2017 Land Values Summary. Pasture values increased by $20 per acre from 2016 values to a national average of $1,350. That’s the highest value for pasture land USDA has recorded.

Land values in most areas have softened from the record-high prices seen in the past decade. Although some areas are seeing values significantly below those of recent years, values have started creeping back up. Reports from Federal Reserve banks, universities and auction companies show land values in the Midwest, Great Plains and South are posting year-over-year gains.

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U.S. Farm Income Noses Upward After Three Years of Declines

Commodity prices are still in a trough, but U.S. farm income is on the rise for the first time since 2013 because producers are sending more crops and livestock to market than initially expected, said the USDA. It forecast net cash farm income (a measure of liquidity) of $100.4 billion this year, far stronger than the February forecast of $93.5 billion, but only three fourths of the record set in 2013.

“Increased quantities … are the primary driver, accounting for nearly 90% of the total effect on cash receipts,” said USDA’s Farm Sector Income Forecast, issued three times a year. Farmers reaped their largest corn and soybean crops ever in 2016, so they have ample stockpiles to liquidate this year. Livestock producers also ramped up marketings this year, boosting their revenue. USDA economists raised their estimate of cash receipts from crops and livestock by $14.1 billion, or 4%, from February.

The cash infusion trickled through USDA’s farm sector balance sheet to become a $6.9 billion increase in estimated cash farm income. With it, cash income would be 13% larger this year than in 2016. The USDA also forecast a 3% increase in net cash farm income to $63.4 billion, or half of the 2013 record for net farm income, a measure of wealth that includes crops held in storage. Cash farm income tends to be less volatile than net farm income.

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Secretary of Treasury Declares Housing Reform Still a Priority

On July 27th during a House Financial Services Committee hearing, Secretary of Treasury Steven Mnuchin declared that housing finance reform was still a top priority for the Trump Administration. Mnuchin argued that the current system where government sponsored enterprises such as Fannie Mae and Freddie Mac remain under the financial management of the Federal Housing Finance Agency is harmful to consumers and unsustainable. More specifically, Mnuchin stressed the need to clear up housing policy to streamline the benefits to single and multi-unit homeowners. Mnuchin called for an updated system that increased private sector participation and protected taxpayers. Mnuchin did not go into specific details concerning the make up or implementation of such a system.

GAO Releases Crop Insurance Report—Suggests Cuts to Delivery System

Last week the Government Accountability Office (GAO) released a report requested by Senator Feinstein (D-CA). It reviews the historical payments made by the Risk Management Agency (RMA) to the private crop insurance companies to deliver the crop insurance program – both the administrative and operating payments (A&O) as well as the underwriting gains paid to private insurers when indemnities are less than total premium. The report concludes that while significant savings resulted when the RMA renegotiated its agreement with the private sector in 2011, more cuts could be made to the private sector. GAO specifically recommends Congress require RMA to renegotiate its agreement with the private companies and lower the expected rate of return to 9.6% from the current target of 14.5% (gross return) and change the cap on A&O payments to reduce annual per policy fluctuations that result from the national payment cap. 

Read the Full Report

New Appraisal Valuations Tools Streamline Mortgage Underwriting Process

Fannie Mae and Freddie Mac are using new methods to streamline the mortgage underwriting process. The integration of the Uniform Collateral Data Portal, where lenders electronically submit appraisal reports, is allowing Fannie and Freddie access to over 20 million appraisal reports on-line. The data availability permits Fannie and Freddie to assess valuations with improved confidence as they now have access to appraisal reports in comparable areas. In specific cases Fannie and Freddie will waive an appraisal requirement for a borrower when they have a recent appraisal on file in their system.

The ASFMRA joined the Appraisal Institute, the Collateral Risk Network, the Columbia Society of Real Estate Appraisers and the Massachusetts Board of Real Estate Appraisers in a letter to the Chairman and Ranking member of the Senate Banking, Housing and Urban Affairs Committee (Senators Mike Crapo, R-ID and Sherrod Brown, D-OH respectively) raising concerns with this new program. The letter asks that the Senate Committee call on the Federal Housing Finance Agency (FHFA) to prevent the Enterprises from implementing the appraisal waiver programs until they can demonstrate the appraisal waiver program:

1) is consistent with safe and sound operation of the Enterprises;
2) does not bring harm to the consumer, especially the affordable housing sector;
3) is properly monitored by FHFA and tested with independent appraisals; and
4) integrates proper safeguards to prevent fraud.

Trump Fills Key USDA Positions

(Washington, D.C., September 1, 2017) – U.S. Secretary of Agriculture Sonny Perdue today applauded President Donald J. Trump’s selection of three individuals for key positions within the U.S. Department of Agriculture (USDA). The president announced Gregory Ibach as Under Secretary for Marketing and Regulatory Programs (MRP), Bill Northey as Under Secretary for Farm Production and Conservation (FPAC), and Stephen Vaden as USDA’s General Counsel.

The Under Secretary for MRP oversees three critical USDA agencies: the Animal and Plant Health Inspection Service; the Agricultural Marketing Service; and the Grain Inspection, Packers, and Stockyards Administration. The Under Secretary for FPAC oversees three critical USDA agencies: the Farm Service Agency, Natural Resources Conservation Service, and the Risk Management Agency.

“I look forward to the confirmations of Greg Ibach, Bill Northey, and Stephen Vaden, and urge the Senate to take up their nominations as quickly as possible,” Perdue said. “This is especially important given the challenges USDA will face in helping Texans and Louisianans recover from the devastation of Hurricane Harvey.”

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Dogs, Cats, Horses, Too: Animal Welfare Debates Could Tie up Farm Bill

WASHINGTON, August 30, 2017 – Animal welfare activists are optimistic that a series of bills they are pushing have enough bipartisan support to get included in both the House and Senate versions of a new farm bill. At the same time, activists are bracing for a possible battle over attempts to block individual states from regulating the way farm animals are produced.

Wayne Pacelle, president and CEO of the Humane Society of the United States, tells Agri-Pulse that he thinks at least three amendments have a chance of getting included in the farm bill: One would outlaw trade in meat from dogs and cats. A second would prohibit practices, called “soring,” that are used to give horses an exaggerated gait. The third bill, called the Pet and Women Safety (PAWS) Act, would provide protections for pets in domestic violence cases.

Pacelle said the horse-soring and dog-meat bans would likely have “overwhelming” support, even in the House committee, where Republicans have a 26-20 majority. The PAWS act likely could get a majority as well, he said.

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Autonomous Robots and Drones Will Operate Future Farms

PENDLETON, Ore. — Where is it taking us, all this technology? Where is it taking agriculture?

If the presentations and demonstrations at the recent Future Farm Expo are an indication, it’s taking us to Jaw Drop City.

Some of this is already in place:

A network of field sensors and software produces a three-dimensional soil map to help with crop selection, tillage and drainage decisions, and variable rate prescriptions for seeding, fertilizer and irrigation.

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Dow, Dupont Complete Merger

The Dow Chemical Company and E.I. du Pont de Nemours & Company, or DuPont, Aug. 31 announced the completion of the merger between the two companies. The combined entity is operating as a holding company under the name DowDuPont with three divisions – Agriculture, Materials Science and Specialty Products.

Shares of DuPont and Dow ceased trading at the close of the New York Stock Exchange Aug. 31, according to a written statement released by the new company. DowDuPont started trading on the New York Stock Exchange under the stock ticker symbol DWDP. Pursuant to the merger agreement, Dow shareholders received a fixed exchange ratio of 1 share of DowDuPont for each Dow share, and DuPont shareholders received a fixed exchange ratio of 1.282 shares of DowDuPont for each DuPont share.

The Board of Directors of DowDuPont comprises 16 members – eight directors formerly on the DuPont Board and eight directors formerly on the Dow Board. There are two lead directors: Jeffrey Fettig, who previously served as the lead independent director for Dow; and Alexander Cutler, who previously served as the lead independent director for DuPont.

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Wheat Virus Threatens Crop in U.S. Plains as Farmers Save Money

CHICAGO, Sept 1 (Reuters) – Kansas, the top U.S. wheat producing state, could face hefty yield losses next year from a virus that cost it nearly 6 percent of production in 2017, according to a preliminary estimate, as low wheat prices may have deterred farmers from spending money on herbicides.

This year’s outbreak of wheat streak mosaic virus in Kansas was the worst since 2006, according to plant pathologists at Kansas State University. The disease also struck parts of Oklahoma, Nebraska and Colorado.

Amid a global glut of crops that is depressing prices of corn and soybeans, milling-quality wheat has stood out as more vulnerable to shortages through adverse weather or disease. Earlier this year, high-protein wheat premiums surged as supplies were hit by drought in Australia and the United States.

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Corn Maturity Pace Falls Behind, USDA Says

DES MOINES, Iowa — On Monday, the USDA slightly raised its U.S. soybean crop rating, while leaving corn unchanged from a week ago.


As of Sunday, 62% of the U.S. corn crop had been rated good/excellent, equal to a week ago, according to the USDA Crop Progress Report Monday.

USDA pegged the amount of the U.S. corn in the dough-growth period at 86%, compared with an 87% five-year average.

Just 44% of the crop has reached the dented growth stage vs. a 51% five-year average.

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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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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.