Farm Bill Update
After failing to pass the farm bill, the House passed a rule to allow consideration of the motion to reconsider the House farm bill (H.R.2) until June 22, 2018. The House could vote on the motion at any time up to that date or it could extend the deadline for a vote. The Agriculture Committee will make no changes to H.R. 2 in the interim and is expecting a vote sometime after the House votes on an immigration bill. Further amendments will not be considered on the House floor to the farm bill, so it will be essentially a straight up-or-down re-vote on H.R. 2.
The Senate Agriculture Committee did not announce a date for mark-up before the House and Senate left town for a Memorial Day recess. Both bodies return to D.C. this week. It was widely anticipated that the Committee would announce June 6 as the mark-up date, after failing to make that announcement, now the mark-up in the Senate Agriculture Committee could be the week of June 11th. Senate Majority Leader McConnell has pledged Senate floor time should the Senate Agriculture Committee report a farm bill.
Land Market Signals
The last four years have been a trudge of low commodity prices, political upheaval, trade concerns and seesawing weather. At the center of it all, one asset, farmland, has come away looking practically bulletproof. Are some cracks finally starting to show?
It's early to infer that an uptick in farmland listings is an important indicator, but it's notable, says Randy Dickhut, Farmers National Co. senior vice president of real estate operations and an accredited farm manager. Through the first quarter of 2018, Dickhut says the company saw a 50% increase in private-treaty farmland listings compared to year-ago levels. A lot of that activity was in Iowa, Nebraska, Michigan and North Dakota. Farmers and ranchers, he notes, are still, by far, the biggest percentage of buyers, with 80 to 90% of property sold going to local operators.
Does the fact that Farmers National Co. is marketing more land mean the ag industry is seeing forced sales at this point? "Not on any large scale," assures Dickhut, based at Omaha, Nebraska. "It's true, there is some of that happening. From what we've seen, however,there aren't many total farm sales or liquidations. The exception would be in some of the dairy areas, where there is more financial stress.Keep Reading[Back to Top]
FY 2019 Appropriations Bills Move in House/ Senate
Both the House and Senate Appropriations Committees have now passed the FY 2019 Appropriation bills for agriculture. FY 2018 funding expires September 30, 2018. The bills will move to the respective floors for consideration next. It has been sometime since either the House or Senate have voted on the Agriculture appropriations bill as a stand-alone bill, instead of as an omnibus package. The House intends to do so, while the Senate will likely package the agriculture bill with other appropriations bills as a “mini-bus.”
The House bill funds the Risk Management Agency’s Salaries and Expenses (S&E) account at $75.419 million, while the Senate funds it at $74.829 million, the same as in FY 2018. The House bill funds the Farm Production and Conservation (FPAC) Business Center at $115.402 million, while the Senate only provides $1.028 million. The Farm Service Agency’s S&E is funded at $1.527 billion in the Senate bill, same as FY 2018 level, while the House provides $1.424 billion. Neither bill makes changes to the crop insurance, commodity or conservation programs even though the President’s Budget calls for cuts to those programs. [Back to Top]
Interest Rates on Ag Loans Rise as Farm Income Continues to Slide
Results of Kansas City Federal Bank’s most recent survey of farm lenders shows that interest rates on farm loans have continued to inch higher. At the same time, the first quarter 2018 Agricultural Finance Monitor published by the St. Louis Fed indicates that farm income slipped for the 17th consecutive quarter.
The interest rate increases had a “rather modest effect on producers’ overall expenses,” according to the Kansas City Fed. Authors of the May 4 report, Nathan Kauffman and Ty Kreitman, added, “Despite the modest increase in interest expenses, higher interest rates typically are expected to place downward pressure on farmland values, which may still have a more significant effect on farm financesthan interest expenses directly.
Farmland values, however, have continued to remain relatively steady and, even in a higher interest rate environment, have provided ongoing stability to farm sector balance sheets and agricultural lending.”Learn More[Back to Top]
FSA to Resume Continuous Sign-up for CRP
The Farm Service Agency (FSA) will resume accepting applications for the voluntary Conservation Reserve Program (CRP). Eligible farmers, ranchers, and private landowners can sign up at their local Farm Service Agency (FSA) office between June 4 and Aug. 17, 2018.
FSA stopped accepting applications last fall for the CRP continuous signup (excluding applications for the Conservation Reserve Enhancement Program (CREP) and CRP grasslands). This pause allowed USDA to review available acres and avoid exceeding the 24 million-acre CRP cap set by the 2014 Farm Bill. New limited practice availability and a short sign up period helps ensure that landowners with the most sensitive acreage will enroll in the program and avoid unintended competition with new and beginning farmers seeking leases. CRP enrollment currently is about 22.7 million acres.
For this year’s signup, limited priority practices are available for continuous enrollment. They include grassed waterways, filter strips, riparian buffers, wetland restoration and others. View a full list of practices
. FSA will use updated soil rental rates to make annual rental payments, reflecting current values. It will not offer incentive payments as part of the new signup. USDA will not open a general signup this year, however, a one-year extension will be offered to existing CRP participants with expiring CRP contracts of 14 years or less. Producers eligible for an extension will receive a letter with more information.[Back to Top]
FSA to Accept County Committee Nominations
The Farm Service Agency (FSA) will accept nominations for county committee members beginning Friday, June 15, 2018. Producers can nominate themselves or others. Check your local USDA service center to see if your local administrative area is up for election this year. To be considered, a producer must sign an FSA-669A
nomination form. The form and other information about FSA county committee elections are available at www.fsa.usda.gov/elections
. All nomination forms for the 2018 election must be postmarked or received in the
local FSA office by Aug. 1, 2018. Election ballots will be mailed to eligible voters beginning Nov. 5, 2018.[Back to Top]
Demand For Wisconsin Farm Land Remains Strong
Strong demand for farmland in Wisconsin has continued this year. It's keeping land prices steady despite low commodity prices and suffering farm incomes.
The latest data from the state Department of Revenue showed a slight increase in land sales during the first four months of 2018.
"That surprised me," said Arlin Brannstrom, associate professor emeritus at the University of Wisconsin-Madison. "I thought there wouldbe some dampening in that enthusiasm for land ownership given the weak prices we’ve seen for agricultural commodities, in particular milk. But I think there's still a lot of demand."Read More[Back to Top]
Bayer Plans to Close on Monsanto June 7
Bayer plans to complete its acquisition of Monsanto this Thursday, June 7. That’s contingent on receiving all approvals from regulatory authorities.
“The acquisition of Monsanto is a strategic milestone in strengthening our portfolio of leading businesses in health and nutrition,” said Werner Baumann, chairman of the board of management of Bayer AG in a Bayer news release. “We will double the size of our agriculture business and create a leading innovation engine in agriculture, positioning us to better serve our customers and unlock the
long-term growth potential in the sector.”Learn More[Back to Top]
White House Expected to Announce Compromise on Biofuels - Sources
WASHINGTON, June 3 (Reuters) - The Trump administration is expected on Monday to announce changes in biofuels policies, including a plan to count ethanol exports toward federal biofuels usage quotas and allowing year-round sale of fuels with a higher blend of ethanol, two sources briefed on the matter said.
Reuters reported on May 11 that after hosting several meetings between representatives of the corn and refining industries, the administration was in the "last stages" of formally proposing changes to biofuels regulations intended to appease both sides.
The changes, expected to be outlined in a memorandum on Monday, will be subject to the federal rule-making process, added the sources, who were not authorized to speak publicly. A White House spokeswoman declined to comment.Learn More[Back to Top]
Mexico, Canada Say They Are "Committed to NAFTA"
Mexico’s chief NAFTA negotiator and Canada’s top agricultural official say their countries remain committed to completing the North American Free Trade Agreement renegotiations, no matter how long that effort may take.
Kenneth Smith, who heads NAFTA negotiations on behalf of the Mexican Ministry of Economy, along with Lawrence MacAulay, Canada’s Minister of Agriculture and Agri-Food, addressed the 22nd World Meat Congress in Dallas on Thursday. The event is hosted by the U.S. Meat Export Federation (USMEF) and the International Meat Secretariat.
Smith says the negotiations that started in August have made progress in many areas, with proposals for the tougher issues currently on the negotiating table.Read More[Back to Top]
The Journal is Here!
The 2018 Journal of ASFMRA is here! Download your copy today
and catch up on the latest industry trends and insights.
Interested in submitting an article for the journal? The deadline for the 2019 Journal is August 15, so submit
your articles today! [Back to Top]