Ag News, April 1, 2014

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LandOwner Survey Finds Rising Caution Among Subscribers

Reflecting the softer demand seen at many farmland auctions in recent months, LandOwner subscribers are much more cautious, even negative, on farmland prices over coming years. But as a whole, you remain bullish on farmland values over the long run. These are the key findings of our eighth annual LandOwner Survey, which was conducted in December and January. The results reflect the attitudes of landowners in Illinois, Indiana, Iowa, Kansas, Minnesota, Nebraska, Ohio and South Dakota. Login to Member Resources to download the lates edition and read more.

Please take a few minutes to complete the three question ASFMRA Land Values Survey:    Results from this survey will be compared to data from the LandOwner Survey as well as USDA data in late April.

Register Now for Eminent Domain

Eminent Domain is a topic that all appraisers will have to address at some time in their career.  How much do you really know about condemnation appraising when it comes to preparing value estimates on properties that are subject to acquisition? 

Join ASFMRA on April 23rd – 25th, 2014 for our Eminent Domain course at the Doubletree Hotel in Denver, Colorado.  In this course you will learn techniques used in preparing value estimates and how condemnation appraising is dramatically different than other types of appraising.  We will explore complications which may be encountered, including severance damages, consequential damages, special and general benefits, condemnation blight, project enhancement and inverse condemnation. Case studies and short examples are used to learn:

  • Just compensation formula
  • Highest and best use
  • Approaches to value  
  • Damages and benefits  
  • Easements 
  • Appraiser relationships with attorneys, judges and juries
  • Trial preparation and participation
  • Trends in eminent domain law

While this course is not required for a Certified General Appraiser license, it can be used as an elective for the license, for continuing education credit, and to fulfill requirements towards your Accredited Rural Appraiser (ARA) designation.   Don’t miss the opportunity to add to your knowledge, register today!

Farmland Values Settle, Grain Prices at Fault

(Bloomington, IL, March 20, 2014) The rate of increase in the value of Illinois farmland has flattened and lower grain prices are to blame, according to presentations made at the Illinois Land Values Conference held here today. Hosting the event was the Illinois Society of Professional Farm Managers and Rural Appraisers.

“Simply put, farmland earnings are important and have been the driver on prices paid for farmland over the past few years,” says Dale Aupperle, AFM, ARA, Heartland Ag Group, LLC, Forsyth, IL, and overall chair of the annual Land Values and Lease Trends project managed by the Society. “Sharply lower grain prices have diminished earnings projections and put the brakes on the uptrend in farmland values.”

Joining Aupperle in the presentation was Gary Schnitkey, Ph.D., University of Illinois College of Agriculture, Consumer and Environmental Sciences, Urbana, IL. He told the group that prices paid for corn are now near $4.30 per bushel. “Prices were consistently above $5.00 from 2010 through midsummer last year. Current expectations are for lower prices into 2014.”

He noted that crop insurance provided farmers with a substantial amount of cash in 2012 and 2013. “Those funds are no longer coming in,” he said. “Experts are forecasting farmland returns to drop by up to 20 percent.”

Aupperle explained that the trend line on farmland values has been upward for decades and has seen significant interruptions in the pattern three times.

He said there was a 50 percent correction in farmland values from 1980 through 1987, the period of the Farm Crisis. “This was after farmland rose nearly 500 percent from 1982. This one was a bubble.”

The next period was 1998 through 2001 when there was a 15 percent correction “after an 11-year uptrend from 1997 with values rising by 92 percent,” Aupperle said. “The last period was in 2008-2009. Values went sideways for a year after doubling in value from 2001.”

“Perhaps history gives us some guidance for our current thought processes,” he continued. “It doesn’t look like a bubble to us. A more normal time for farmland prices may be in store for the next several years. Commodity prices have led to this situation.”

In presenting their summary to the group, the two cited the 2014 Illinois Land Values and Lease Trends Report. This is a composite of reports from around the state on land sales and lease trends occurring in Illinois during 2013.

They noted that all categories of farmland, determined by Productivity Increase, saw  minor drops in values during the year: Aupperle explains that Excellent land was down 2 percent — “With less land available but very willing buyers”; Good  land was down 3 percent — “Increased input costs are a concern;” Average land was down 4 percent — “Buyers are likely to be neighbors in the community;” Fair land was down 7 percent — “Popular category as land mix attracts residential, recreational and non-farm uses.”

Aupperle said that Recreational land was steady-to-stronger across the state and there was some activity in Transitional land near the metropolitan areas.

Local farmers are still the primary buyers with estate sales leading the way in reasons for selling as well as bringing properties to the market. Public auctions (43 percent) led the list of methods of selling followed by private treaty (36 percent), sealed bid (11 percent) and multi-parcel auction (10 percent).

Cash Rents Have Stabilized Cash Rents have stabilized, Schnitkey said. “Rents are slightly off the highs in 2013. This occurred because of the drop in commodity prices. We could be facing more cash rent declines if commodity prices are low in the fall this year.

“Assuming a price of $3.50 for a bushel of corn and $10 for a bushel of soybeans, 92 percent of our respondents expect cash rents to drop $10 or more per acre and no one expects to see rents to increase,” he noted.

“We are carefully watching the influence of commodity prices, weather and yields, interest rates, net farm income, the value of the dollar, alternative investments, ethanol, and long term inflation among many other factors. Each will play a role in land values,” Aupperle concluded.

Other speakers on the program echoed the findings of the Land Values Report, copies of which are available for sale through the Society web site at

Download a Power Point presentation that highlights the report by members Gary Schnitkey, PhD, and Dale Aupperle, AFM, ARA.

EPA and Army Corps of Engineers Clarify Protection for Nation’s Streams and Wetlands

The Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Army Corps) jointly released a proposed rule last week to clarify protection under the Clean Water Act for streams and wetlands. The proposed definitions of waters will apply to all Clean Water Act programs. It does not protect any new types of waters that have not historically been covered under the Clean Water Act and is consistent with the Supreme Court’s more narrow reading of Clean Water Act jurisdiction according to an EPA press release.

Additionally, the EPA and the Army Corps have coordinated with the USDA to ensure that 53 specific NRCS conservation practices that protect or improve water quality will not be subject to Section 404 dredged or fill permitting requirements. The agencies will work together to implement these new exemptions and periodically review, and update NRCS conservation practice standards and activities that would qualify under the exemption. Any agriculture activity that does not result in the discharge of a pollutant to waters of the U.S. still does not require a permit. The proposed rule will be open for public comment for 90 days from publication in the Federal Register. The interpretive rule for agricultural activities is effective immediately.

An unofficial copy of the proposed rule can be found here:

The interpretative rule related to NRCS conservation practices can be found here:

A list of the 53 NRCS practices are here:

More information from EPA about the rule can be found at

U.S. lists lesser prairie chicken as threatened species

The U.S. Fish and Wildlife Service (FWS) announced last week its final listing of the lesser prairie-chicken as “threatened” under the Endangered Species Act (ESA). FWS said it determined that the lesser prairie-chicken is likely to become endangered in the foreseeable future and warrants listing as “threatened” under the ESA. Under the law, a “threatened” listing means the species is likely to become in danger of extinction within the foreseeable future; it is a step below “endangered” under the ESA. The U.S. Fish and Wildlife Service says a special rule allows the five affected states to take the lead in preservation of the species and would avoid harmful regulations. The USFWS announcement and information about the bird and conservation plans can be found here:

Texas Land Values Report to be Released on April 17

On April 17, 2014, the Texas Chapter will release the Rural Land Value Trends for 2013 at the annual Land Conference in San Antonio. 

The Texas Chapter has a new website too,!!  It will be up and running on April 14th.  Check it out!!

Unmanned Aerial Vehicles (UAV’s) Experts to Invade Tucson

An outstanding program is being developed on Unmanned Aerial Vehicle’s (UAV’s) as part of this year’s Annual Meeting in Tucson, Arizona.  Not only can you escape the cold and the snow this October 27-November 1st, but you can also learn about ways to implement UAV’s into your daily work…in a way that is both affordable and applicable to your profession.

Saturday, November 1st will highlight several top experts who are utilizing UAV’s.  Saturday morning will kick off with Dr. Van Der Merwe from Kansas State University.  D. Van Der Merwe will discuss “Practical and Economic Advantages of UAV Employment in Rural Property Management”.  The opening speaker will be followed up by several hands-on demonstrations from individuals who utilize UAV’s in a variety of ways.  Jason Fest of Schrader Auction Company, Zach Fiene of DMZ Aerial and Ryan Jenson of HoneyComb Corporation. 

This incredible technology program will wrap up with a panel discussion which will provide the audience with plenty of time for questions and answers.  Panelists will include our own LeeAnn Moss, PhD, ARA; Jason Fest of Schrader Auction Company, Peter Wagoner of Applecrest Farm Orchards, and Robert Blair of Blair Farms.   Bios, photos, and company information will soon be available at  Many thanks to Leonard Meador, AAC for all his time and effort in putting together this top-notch program.

How Much is Your Winery Worth Today?

By Rob McMillan, Silicon Valley Bank – Probably once a week someone asks me, what are multiples doing. What they are really asking is “are sales prices going up or down.” As a banker I love that question because it means there might be a financing opportunity and a way I can help in an acquisition (…yes I do have a day job making loans as boring as that might sound.)  If you understand valuation theory and want to go straight to the answer to the question, skip down the page to the Current Public Company Multiples section.  - See more at:

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