In House, 'A Lot of Undecideds' on Farm Bill
While ready to move on the farm bill, House Republican leaders are giving Agriculture Committee Chairman Michael Conaway time to persuade “a lot of undecideds” to vote for tougher work requirements for SNAP recipients and looser subsidy rules for farmers. A sizable number of Republican lawmakers say Conaway wasn’t tough enough on either group and want to tighten the access to federal support.
Majority Leader Kevin McCarthy listed the farm bill for consideration this week but placed it last of three bills for debate. The House Rules Committee, the gatekeeper for floor action, says it will spend two days — Tuesday and Wednesday — deciding terms of debate for the bill, which could mean no discussion on the floor before Thursday.
“We’ve got a lot of undecideds,” said Conaway at the end of last week, acknowledging he lacked a majority for the bill after a head count by the leadership. “We believe we’ll get there … I believe we’ll be there next week and we’ll have it on the floor.”Learn More
Federal Reserve Ag Credit Surveys- 2018 First Quarter Farm Economy Conditions in the Midwest
On Thursday, the Federal Reserve Banks of Chicago and St. Louis released updates regarding farm income, farmland values and agricultural credit conditions from the first quarter of 2018. Recall that the Federal Reserve Bank of Dallas issued a similar update last month. Today’s update highlights core findings from Thursday’s reports.
Federal Reserve Bank of Chicago
David Oppedahl, a Senior Business Economist at the Chicago Fed, explained in The AgLetter that, “Agricultural land values for the Seventh Federal Reserve District showed signs of stabilizing in the first quarter of 2018, as farmland values were unchanged from a year ago. On average, ‘good’ farmland values in the first quarter of 2018 rose 1 percent from the fourth quarter of 2017, according to the survey responses of 181 District agricultural bankers.”Read More[Back to Top]
Almond Growers Think Crop Should Yield Record 2.3 Billion Pounds
The first indication of California’s 2018 almond crop is out, and growers appear optimistic, despite a bloom time freeze that did considerable damage in some locations.
The subjective almond forecast, which is the opinion based on grower interviews by the U.S. Department of Agriculture, suggests almond production could be 2.3 billion pounds this year, slightly higher than last year’s record-setting 2.27 billion pounds of production. The figure is based on 1.07 million acres of bearing trees from Red Bluff to Arvin.
Estimated yields in the subjective estimate suggest a 5 percent drop to 2,150 pounds per acre.Learn More[Back to Top]
Interest Rates on Farm Loans Increase, Pressure on Some Farm Operators Could Follow
Late last month, Bloomberg writer Alan Bjerga reported that, “American farmers have managed to stay afloat despite years of shrinking crop values, the lowest incomes since the recession and a budding trade war with China. Now, they’re feeling a new squeeze — borrowing money is getting more expensive as interest rates rise. For some, it may be fatal.”
The Bloomberg article explained, “The Federal Reserve is tightening credit as the economy shows signs of strength, ending a prolonged period of low interest rates in the wake of the financial crisis. As a result, banks pushed the fixed rate on U.S. farm loans to a five-year high of 5.6 percent in the fourth quarter, up from 5.3 percent a year earlier, Fed data show.Read More[Back to Top]
Survey Shows Farm Income has Declined for 17th Consecutive Quarter
For the first quarter of 2018, farm income continued to decline for the 17th consecutive quarter, according to the latest Agricultural Finance Monitor published by the Federal Reserve Bank of St. Louis. Quality farmland values and cash rents also fell slightly during in the first quarter from a year earlier.
The survey was conducted from March 15, 2018, through March 31, 2018. The results presented here are based on the responses from 34 agricultural banks within the boundaries of the Eighth Federal Reserve District. The Eighth District includes all or parts of seven Midwest and Mid-South states: Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.Learn More[Back to Top]
Corteva Agriscience Announces New Seed Strategy
Corteva Agriscience, the agriculture division of DowDuPont, is announcing a new U.S. multichannel, multibrand seed strategy. In a company news release, company officials say this strategy will expand access to the company’s genetics, technology, and traits across various agriculture distribution channels including agency, direct, retail, distribution, and licensing.
Corteva Agriscience will go to market through five regional U.S. corn and soybean seed brands including:
- Dairyland Seed
- Seed Consultants
Each will have a strengthened and expanded portfolio to serve the brand’s respective customers, say company officials. Keep Reading[Back to Top]
6 Interest Rate Trends to Watch
Interest rates continue to inch higher for farm loans, according to the Ag Finance Databook released by the Federal Reserve Bank of Kansas City. So far, these increases have had small impacts on farmers’ financial standing.
“Following a prolonged period of historically low rates, interest rates on most types of farm loans at commercial banks have increased between 1.0 and 1.5 percentage points since 2015,” report Nathan Kauffman, assistant vice president and Omaha Branch executive, and Ty Kreitman, assistant economist. “Additional increases in rates could put more pressure on some farm operations, but delinquency rates on farm loans remained low through 2017, and the performance of most agricultural banks has remained solid.”
Here are six interest rate trends to watch in the year ahead, courtesy of the Kansas City Federal Reserve Bank report: Farm Loan Interest Rates Edge Higher.Learn More[Back to Top]
Trump Says Ethanol Exports Could Count Towards U.S. Biofuels Quotas -Sources
NEW YORK, May 8 (Reuters) - U.S. President Donald Trump said on Tuesday he is considering allowing exported ethanol to count toward the volumes mandated under the nation’s biofuels law, a move that could appease both Big Oil and Big Corn by cutting the refiners’ regulatory costs while propping up demand for corn.
According to two sources briefed on the discussions with a group of Republican senators, Trump also reiterated his support for expanding sales of higher ethanol blends of gasoline and backed away from a proposal to cap the price of credits called RINs that refiners must acquire and turn into the government each year to prove compliance with the biofuels quotas.
The proposed changes follow months of fractious negotiations between Big Corn and Big Oil over the future of the U.S. Renewable Fuel Standard (RFS) that requires biofuels to be added to gasoline and diesel, after refiners increasingly complained the regulation was costing them a fortune.Read More[Back to Top]
Wind Farm Explosion Causes Rural Tax Windfalls
Private investment in wind energy is benefiting many US local governments by driving tax base growth and generating new tax revenues, particularly in rural areas, according to Moody's Investors Service.
While 46 percent of the country’s installed wind power capacity is located in Texas, Iowa, Oklahoma and California, wind farms are becoming more prevalent and 41 states had wind farms as of January 2018.
Despite the potential impact from changing state and federal policies, demand for wind energy will likely remain strong and continue to benefit local governments nationwide, according to Moody's.Learn More[Back to Top]
Wisconsin Farmland Prices Average $4,000 per Acre
The farmland market continues to be stable in Wisconsin. For 2017, the average price of farmland sold was $4,025. That’s identical to the 2016 state-wide average and 3.5% higher than the 2015 average, according to a report from the University of Wisconsin’s Center for Dairy Profitability that is based on Wisconsin Department of Revenue data.
“There were 11% more acres sold in 2017 and 13% more reported transactions,” reports Arlin Brannstrom, faculty associate emeritus at the University of Wisconsin’s Center for Dairy Profitability. “Declining farm incomes helped to dampen demand. With low commodity prices expected and increased borrowing costs again in 2018, producer competition for land will likely soften again.”
Farmland prices varied widely across the state. Only 17% of the 2017 farmland sales notched prices above $6,000 per acre, while 20% of the sales were less than $2,000 per acre. Only a few topped $10,000 per acre.Read More[Back to Top]
House Farm Bill Amendments Attack Crop Insurance
The House version of the Farm Bill, which is expected to have floor time this week, made its way through mark up last week which resulted in 103 amendments, several of which aim to make significant changes to the crop insurance programs.
“Amendment topics include the usual controversial proposals on capping crop insurance premium subsidies, means testing for the program, changing the sugar program, etc.,” says Jim Wiesemeyer Pro Farmer policy analyst.
An amendment from Reps. Michael Burgess (R-TX) and Earl Blumenauer (D-OR) , “caps spending on Agriculture Risk Coverage and Price Loss Coverage programs at 110% of CBO-predicted levels for fiscal years 2021 through 2025.”Learn More[Back to Top]
China's Multi-Story Hog Hotels Elevate Industrial Farms to New Levels
YAJI MOUNTAIN, China (Reuters) - On Yaji Mountain in southern China, they are checking in the sows a thousand head per floor in high-rise “hog hotels.”
Privately owned agricultural company Guangxi Yangxiang Co Ltd is running two seven-floor sow breeding operations, and is putting up four more, including one with as many as 13 floors that will be the world’s tallest building of its kind. (The photo at right shows one of the complexes under construction.)
Hog farms of two or three floors have been tried in Europe. Some are still operating, others have been abandoned, but few new ones have been built in recent years, because of management difficulties and public resistance to large, intensive farms.Read More [Back to Top]