ASFMRA AgNews - Vol. 13 Issue XXXIIV [August 21, 2018]

By ASFMRA Press posted 08-20-2018 19:50

  

As Land Prices Climb, Small Farmers Look to Leasing as a Way to Stay in the Game

While managing their produce farm in Berks County six years ago, Deirdre and Trey Flemming searched for open farmland and better schools for their kids. Ideally, they wanted to lay claim to land in Chester County.

But property in Chester County isn’t cheap, and what’s available is often quickly snapped up and converted into equestrian property or used for other commercial ventures. And like many small farmers, the Flemmings, who own the certified organic Two Gander Farm, couldn’t afford to pay at least $1 million for just 20-some acres of land. Then a tip came their way: Did they know 10 acres of farmland was available in Downingtown?

The property, the Flemmings learned, was available for lease, and if they decided to take the land, their landlord would be the Brandywine Conservancy. One of the most prominent local land trust organizations, it owns and leases 365 acres of preserved land and, in cases of conservation easement, ensures that more than 20,000 acres are forever used only as farmland. The mission of the conservancy, the Flemmings say, matched closely with their own.

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WOTUS is Back for 26 States

U.S. farmers thought they had seen the last of the beleaguered Waters of the U.S. (WOTUS) rule in January when the Trump administration moved formally to rescind the regulation and start over with a new version. That broadening of federal jurisdiction under the Clean Water Act, however, became the law of the land in 26 states as the U.S. District Court for South Carolina ruled that the administration did not follow the proper rulemaking process in rescinding WOTUS. The court ruled that the Environmental Protection Agency (EPA) did not meet requirements for public notice nor a sufficient comment period.

The ruling leaves a patchwork of regulation across the country as courts have issued stays blocking the rule in 24 states. Consequently, the South Carolina ruling only impacts those states that do not have a legal stay in place blocking WOTUS.

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How a 'Strong Dollar' Causes Low Ag Prices and How to Fix It

In recent months, President Donald Trump has imposed much-needed tariffs to address China’s 24-year trade war and commercial espionage campaign targeting America. Instead of changing course, China has imposed tariffs on fairly traded goods from the United States. While President Trump’s moves are aimed at helping U.S. manufacturers, we need additional strategies to help farmers and ranchers.

America’s manufacturers and farmers happen to share a major export problem—an overvalued U.S. dollar that make their goods more expensive overseas. If Congress and the administration can buckle down to pass legislation addressing this “strong dollar,” we could see corn, soybean and beef prices increase by 25 percent or more.

In 1994, China devalued their currency by 40 percent, and has maintained that undervaluation for two decades in order to grow production, exports and their overall economy. At the same time, the U.S. has struggled with an overvalued dollar that has caused persistent trade deficits. According to a study by the Coalition for a Prosperous America, the U.S. dollar was overvalued by roughly 25 percent last year. This serves as a 25 percent tax on U.S. agricultural exports and a 25 percent subsidy for imports.

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Autonomous Drone is Making Test Flights in Kansas, Illinois

When precision ag enthusiasts first met drones, a match made in science began to flourish and it's been growing ever since. It shows no sign of slowing down as a recent demonstration in a remote cross-section of farm fields in central Kansas demonstrates.

The latest in drone technology was tested for three weeks in late July and early August at three locations in Kansas. At the end of the Kansas test on Aug. 10, it was scheduled to move on to three weeks of testing in Illinois.

The platform is American Robotics, which developed a stationary, autonomous drone named "Scout." Scout "lives" in a box at a fixed location and takes off several times a day to collect images of selected nearby farm fields. The drone then returns to recharge batteries, download images and convert them to easy manipulated files, stitch together maps, and transmit the processed data to a "home" computer, which can be nearby, dozens or hundreds of miles away.

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Demand Keeps Cash Rents Steady

Relatively low grain and soybean prices and reduced farm profitability have done little to dent demand for cropland, meaning cash rent prices will remain steady in the next 12 months.

The average rental price for cropland in the U.S. last year was $136 an acre, according to the USDA. Iowa and Illinois, the biggest growers of corn and soybeans, were the leading Corn Belt states at $231 and $218 an acre, respectively.

Crop prices, meanwhile, have held steady. The average price in 2016-2017 was $3.36 per bushel, the government says. Futures this year that are forecast from $3.25 to $3.55 per bushel are expected to average from $3.40 to $4.40 next year, according to data from the USDA.

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ASFMRA Joins Appraisal Organizations Urging ASC to Reject North Dakota Waiver Request

Last week ASFMRA joined 25 other professional appraiser organizations in a letter to Chairman Lindo of the Appraisal Subcommittee (ASC) urging the ASC to reject the North Dakota request to waive appraisal requirements for business or farm loans up to $1 million and residential real estate transactions up to $500,000. The joint letter points out that what the State of North Dakota is requesting is not relief the ASC can provide under its authorities and therefore the North Dakota request should be denied. You can read the full joint letter here:

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ASFMRA Membership Alert: Appraisal Waiver Requested by North Dakota

On August 1st, North Dakota Governor Doug Burgum co-signed a letter to The Appraisal Subcommittee (ASC) asking for a temporary waiver to be enacted in the state.   Other co-signers included the North Dakota Bankers Association and the North Dakota Department of Financial Institutions.  

ASFMRA became aware of this letter on August 3rd.     ASFMRA has signed onto a letter of opposition to this request along with Appraisal Institute (AI) and American Society of Appraisers (ASA).    In addition, The Appraisal Foundation (TAF) sent a letter opposing the waiver to ASC on August 13th.   More work is underway to defend the appraisal industry from unreasonable waiver requests and possible misinformation provided to ASC.    North Dakota Chapter leadership is also engaged on this issue.   If you are a member of the ND Chapter, please assist your leadership any way possible, and consider writing the Appraisal Subcommittee of your personal knowledge of the appraisal/appraiser situation in your state. 

The waiver request asks to relieve the requirement of an appraisal for loans below $1M for business or farm loans, and below $500,000 on residential loans.   Reasons include unreasonable delays, excessive costs, and a shortage of appraisers in some rural areas.   The request for “temporary” waiver is for up to five years in length. 

ASFMRA’s message in DC this past March was that shortages don’t exist when fees reasonably match the time and expense involved in a given appraisal project. 

As most of you know, this is not the first request for waiver of appraisal requirements, but it is the first which has come from high-ranking state officials.    We believe the wording of the “ask” does not meet requirements for a waiver; however, there is time for that to be revised prior to the next ASC meeting on August 29, 2018 when this topic will be considered.  

 

Another item of concern is the 95 pages of supporting documentation included with the ten-page letter.    A considerable amount of privileged information from several lending institutions regarding appraisal fees and turn times were supplied to ASC to support their argument of “unreasonable delays” and “excessive costs”.     This has stepped over the line of professional courtesy and is obviously an issue that ASC also needs to address for future appraisal waiver requests.

As ASFMRA members, please keep your ears open for similar waiver activity in your states.   You can be assured that if North Dakota is successful, many other states will join the “cause” and set this industry back 30 years.  

Contacts for the Appraisal Subcommittee (ASC):

            https://www.asc.gov/Pages/ContactUs.aspx

            Phone: 202-289-2735

            Fax:     202-289-4101


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Top Republicans In the House and Senate Press in Snap Work Requirements

A small group of negotiators will write the final version of the $87-billion-a-year farm bill in the weeks ahead, and they are under pressure from high-ranking conservatives in Congress to require millions of people to work at least 20 hours a week to qualify for food stamps. House Majority Whip Steve Scalise said over the weekend that work requirements are “really important” in a booming economy.

Food stamps account for three fourths of farm bill spending and are the biggest issue in reconciling House and Senate versions of the panoramic legislation, which ranges from crop subsidies to food aid and rural development. The Republican-written farm bill would apply more stringent work requirements to a larger number of people than now affected. The Senate rejected a work-requirement package, 68-30, before passing its farm bill on a bipartisan 86-11 roll call.

Senate Majority Whip John Cornyn urged farm bill negotiators “to take another look” at the work requirements in the House bill. “I was somewhat disappointed,” Cornyn said at the end of last week, that the Senate bill did not include similar language. Cornyn supported the 25-hour-a-week work requirement that was defeated in the Senate. Only Republicans voted for it. Similarly, only Republicans voted for the House farm bill.

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Farm Income to Slide Further in Second Half of 2018 Amid Trump Tariffs

As other segments of the state and regional economy are expected to continue heating up in the second half of 2018, agriculture income and farmland values will continue to decline for the remainder of the year, according to a recent survey by the St. Louis Federal Reserve Bank.

The Fed report on declining farm income and land values was released as Gov. Asa Hutchinson and U.S. Sen. John Boozman, R-Ark., crisscrossed the state to reassure rural communities that trade tariffs imposed by the Trump administration on China and U.S. allies won’t permanently hurt farmers or impair access of Arkansas-grown products to global markets.

The Fed survey, released Aug. 9, shows 24 agricultural banks across the expansive 8th Fed District expect farm income to decline next quarter, just as it did in this second quarter report. The 8th District includes all or parts of seven Midwest states, including Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

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Perdue Proposes New Forest Strategy After Calif. Trip

The U.S. Department of Agriculture (USDA) Forest Service (USFS) announced today a new strategy for managing catastrophic wildfires and the impacts of invasive species, drought, and insect and disease epidemics.

Specifically, a new report titled Toward Shared Stewardship across Landscapes: An Outcome-based investment Strategy (PDF, 3.7 MB) outlines the USFS’s plans to work more closely with states to identify landscape-scale priorities for targeted treatments in areas with the highest payoffs.

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Bayer Absorbs Monsanto

After months of negotiating, divesting and waiting, Bayer and Monsanto will fully merge. The German-based company says the integration of Monsanto into the Bayer Group can begin following the completion on Thursday of the divestment by Bayer to BASF of certain Crop Science businesses. While the name Monsanto will eventually disappear, brand names such as Dekalb, Asgrow and Channel remain untouched.

Bayer became the sole shareholder of Monsanto on June 7 of this year but could not integrate the two businesses until divestments to BASF were finalized. These included Bayer’s field crops business, vegetable seeds business, digital platform xarvio and certain other assets. The U.S. Department of Justice required the divestments to be finalized prior to integration.

“The acquisition of Monsanto gives rise to a leading agriculture company with a high level of innovative strength, a strong product portfolio and the highest ethical standards,” the company said in a recent press release. “As previously communicated, Bayer expects that the acquisition will already make a positive contribution to core earnings per share starting in 2019, with a double-digit percentage from 2021 onward. From 2022, annual contributions of 1.2 billion U.S. dollars to EBITDA before special items are planned from synergies. Moreover, Bayer will further strengthen its commitment to sustainability.”

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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

Anthony Miranda in Willows, CA (California Chapter)

Angel Quincy in Tarboro, NC (North Carolina Chapter)

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Share Your Experience

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!

 

Josh Balding

                   

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

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First Education Foundation Auction Item Received

The first Education Foundation Auction donation has been received! The FIRST 2018 Auction donation was made by the Oregon Chapter!

The Oregon Chapter has donated a Pendleton Wool Blanket. You do not want to miss your opportunity to bid on this amazing Pendleton blanket. It is 64 X 80 inches, 82% wool, 18% cotton. The blanket fits up to a Queen size bed and will keep you nice and cozy on those cool nights. It is a Beaver State Indian Blanket, Santa Fe Saxony Collection and made in the USA.

 

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 1, 2018 in Chandler, Arizona 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 8, 2018. Auction items should be shipped directly to the Sheraton Grand at Wild Horse Pass to arrive no later than Tuesday, October 30, 2018. Please do not send your Auction items to arrive at the hotel more than three (3) days in advance – not to arrive before October 26, 2018 – due to the cost the hotel charges for storage.

 

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.


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