ASFMRA AgNews - Vol. 13 Issue XXIX [July 17, 2018]

By ASFMRA Press posted 07-16-2018 18:14

  

“Land Values are Strong, so I am Okay.”


The other day, a third-hand conversation brought up an interesting perspective. This young, new lender to agriculture had $20 million of potential loans in his pipeline. He indicated to the farm management consultant that he felt okay because land values were still strong in his area. My perspective is that this thought process is very common,particularly later in the stages of an elongated economic downturn.

Profits and cash flow are first to be suppressed in the stages of an economic downturn. The strong, proactive manager will burn through working capital that was built during good economic times. The reactive manager will usually resort to refinancing to replenish financial liquidity on the balance sheet and continue operations.

In the middle stages of the economic cycle, both reactive and proactive managers may have to resort to debt restructuring. The unfortunate reality is that reactive managers may be on their second or third refinance.

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More News:


House to Request Farm Bill Conference This Week

The House will vote this week to request a conference with the Senate on the 2018 farm bill. Since both bodies have passed a version of the 2018 farm bill, the conference request is the next official step. The Senate will make a similar request after the House motion. Conferees can be named at any point after the successful vote to request a conference. The House probably won’t name them this week and might wait until later this month, because once they are named in the House a clock starts (25 legislative days, 45 calendar days) that once reached allows any member of the House to offer motions to instruct conferees.

Senator Roberts (R-KS) will be the conference chairman for this farm bill. By tradition, the chair rotates between the House and Senate. Representative Lucas (R-OK) chaired the 2014 farm bill conference. The Chair determines when the official conference meetings will be held. In the meantime, staff will begin working on ironing out minor difference between the two versions. The goal remains to have a conference report by the end of September to the President before the current farm bill expires. Both the House and Senate will have to pass the conference report. A conference report is not open to amendments.

The nutrition title will be the most contentious issue for the conferees to iron out. There are significant differences between the two bills in the conservation title and funding as well. As you know, there are some crop insurance differences, but those are largely minor as neither bill cuts, caps, or means test crop insurance.
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USDA Announces Disaster Payments

Agriculture Secretary Sonny Perdue announced that agricultural producers affected by hurricanes and wildfires in 2017 now may apply for assistance at their local FSA office to help recover and rebuild their farming operations. Signup begins July 16, 2018 and continues through November 16, 2018.

USDA will make 50% of the payments available immediately and the remainder later in the year if sufficient funds remain. Eligible crops, trees, bushes, or vines, located in a county declared in a Presidential Emergency Disaster Declaration or Secretarial Disaster Designation as a primary county are eligible for assistance if the producer suffered a loss as a result of a 2017 hurricane. Also, losses located in a county not designated as a primary county may be eligible if the producer provides documentation showing that the loss was due to a hurricane or wildfire in 2017. A list of counties that received qualifying hurricane declarations and designations is available here. Eligibility is determined by FSA county committees.
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USTR Announces Additional $200 Billion in Tariffs

After the U.S. raised 25% tariffs on $34 billion of Chinese goods, China responded with  its own set of tariffs., Last week, U.S. Trade Representative Robert Lighthizer announced another round of 10% tariffs on $200 billion worth of Chinese imports. The escalating trade war with China is creating concern among agriculture, business, and Members of Congress. To read the USTR press release here.
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Ag Land Values Drop for 4th Year

Agricultural land values in Nebraska are down 4 percent from a year ago, the fourth consecutive year of declining values. That is according to the Nebraska Farm Real Estate Report from the University of Nebraska-Lincoln Department of Agricultural Economics.

“I am not surprised,” said Amy Johnston, marketing director for Lashley Land and Recreational Brokers in North Platte. Land prices closely follow the commodity markets. However, a number of other factors affect market value, and agricultural land is still a good investment, she said.

Some producers need to reduce debt and find other ways to deal with low income and high property taxes, and so they have little choice but to sell land, Johnston said. However, they are selling marginal land as opposed to their best fields, and that figures into the valuation. Marginal land may have drainage issues or less fertile soil, for example. Four years ago an equal number of top-quality farms and marginal farms were up for sale, she said.

Keep Reading
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Andrew Wheeler Assumes Acting EPA Administrator Role

With EPA Administrator Scott Pruitt ‘s resignation last week, former deputy EPA administrator Andrew Wheeler has stepped into the position of acting Administrator.  Wheeler previously had worked on the Senate Committee on Environment and Public Works  under Chairman Jim Inhofe (R-OK) and as a lobbyist for the coal sector.
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US Raises Odds of El Nino This Year

It’s increasingly likely an El Nino will form this year in the equatorial Pacific to roil global weather patterns and threaten natural gas and agricultural markets, the U.S. Climate Prediction Center said in a report.

There’s now a 70 percent chance of El Nino between December and February, according to the report released Thursday. Last month forecasters put the odds at 64 percent.

“We believe the models more the closer we get to winter,” said Michelle L’Heureux, a forecaster at the center in College Park, Maryland. “Just like weather forecasts tend to be better one day out than seven days out, the same thing tends to happen in climate forecasting.”

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Amid Trade Turmoil, Olive Industry Eyes U.S. Market

Olive growers in California face no shortage of global trade and economic issues. But for the moment, the U.S. trade disputes and their resulting tariffs aren’t one of them.

If anything, producers of olives for oil could be helped if the U.S. decides to slap tariffs on incoming European oils whose prices have been undercutting the California product for years.

As the state’s tree nut sectors are advocating vociferously for a resolution to the budding trade war with China, the European Union and other countries, one crop that is largely unscathed by all the turmoil is olives.

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5 Trade Imbalances are Key Factors in Trade War Concerns

President Donald Trump looks at the merchandise trade imbalances listed below and says it’s time to reduce these imbalances with our trading partners. His contention is these trade imbalances are limiting U.S. growth, compromising trade relationships, constraining quality U.S. job creation, compromising U.S. security and the list goes on. 

See the List
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Wineries Trying to Clear Space for Looming Harvest

Spring rains and cool temperatures may have bought some time by slowing the development of grapes, but wine suppliers are still feeling pressure to clear tank space to make room for the upcoming harvest.

That’s because California wine in the bulk market is moving only in small increments, meaning it’ll take some time to work through the large inventory, according to a monthly report from the Ciatti Co., a San Rafael-based wine and grape brokerage firm.

In late spring, Ciatti received an uptick in requests from suppliers wishing to find buyers for wines to clear tank space ahead of the looming harvest and crush, or to generate cash flow, Robert Selby says in the company’s June report.

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Welcome New Members

Thank you for being a part of ASFMRA! Help ASFMRA welcome our new members and thank them for    choosing the Society as the organization that they desire to be affiliated with.  ASFMRA continues to support rural property professionals and offers services, resources and education which will be of benefit to all of our members, both professionally and personally.

 

We are recognizing new members of the Society on a monthly basis. You may recognize your colleagues in the following list and we encourage you to welcome them into ASFMRA!

 

New Members

Robert Porterfield in Indianapolis, IN (Indiana Chapter)
Nicholas Reps with Compeer Financial in Roshester, MN (Minnesota Chapter)
Christian Suntrup in Clayton, MO (Missouri Chapter)
Tyler Waldner with AgVisors in Redfield, SD (South Dakota Chapter)
Taylor Walker with FIB&T Appraisal in Bismarck, ND (North Dakota Chapter)
Craig Welter with Hertz Farm Management in Nevada, IA (Iowa Chapter)

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Share Your Experience - Make a Referral 

You know first-hand what a great organization ASFMRA is and what it means to you both professionally and personally. Pass that benefit on to others that you know who would benefit from membership with The Most Trusted rural property professional organization – ASFMRA! Talk to those you know who would benefit from ASFMRA’s educational offerings, networking, and meetings. Let them know your experiences of being involved in this great association and some of the business contacts you have made along with lasting friendships. Your peers listed below have done just that! They spoke to individuals about ASFMRA and those individuals have now become members of ASFMRA!

Richard Pringnitz, AFM
Paul Reisch, ARA
Lisa Suntrup                  

Thank you to all who have referred someone and in some cases, more than one, to join ASFMRA.

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