ASFMRA AgNews - Vol.13 Issue XLI [September 24, 2018]

By ASFMRA Press posted 09-24-2018 19:33


Despite Recent Reports, Local Farmland Experts See Steady Land Market

The Iowa Chapter of the Realtors Land Institute released a report earlier this month noting from March to September 2018 farmland average values across the state have dropped by 1.7 percent and 0.6 percent in northwest Iowa. Local farmland experts pointed to the six-month period as too short of a window to draw accurate conclusions on a market they said is relatively stable.

"I really think we call the market off a little bit, but in reality, I would call the market steady," Acre Company realtor and auctioneer Jon Hjelm said. "We will know more six months from now about how right this survey is and we have seen some very strong sales in the last six to eight months. ... As in any market, you are going to have some highs and some lows."

Farm Credit Services of America northwest Iowa regional vice president Al Patten noted a decrease in the quality of land in the last six months as a possible factor contributing to the observed decrease in overall prices.

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What Happens If Congress Misses Farm Bill Deadline?

Barring a dramatic breakthrough, farm-state lawmakers will miss their target of enacting the 2018 farm bill in the next six days, according to two of the Senate and House negotiators charged with finding a compromise. SNAP, specifically House Republicans’ demands for stricter work requirements for food-stamp recipients, is the major obstacle for the conferees, but there are differences across all sections of the $87-billion-a-year legislation.

There would be little immediate impact if the 2014 farm law expires, as scheduled, on Sunday without a successor in place. Lawmakers have passed short-term extensions, sometimes repeatedly, in the past while completing negotiations, or simply allowed a lapse of a few days. At some point, the bogeyman of farm bills will be invoked — reversion to the “permanent” 1949 Agricultural Act, which would boost farm subsidy rates to unaffordable rates, reintroduce planting controls for some crops, and eliminate support for soybeans.

During interviews with broadcasters, Minnesota Representative Collin Peterson, the senior Democrat on the House Agriculture Committee, and Iowa Senator Joni Ernst, one of the Senate conferees, said it was unlikely that Congress would pass the farm bill by Sunday. Peterson, one of the “big four” negotiators, said on “Adams on Agriculture” that a compromise bill might be passed in October. Ernst told Radio Iowa, “We could be looking at a one-year extension.”

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AG FINANCE: Farmland — Is It Still A Good Investment?

Farmers have had a special relationship with land since the beginning of history. Agricultural land has formed the backbone of ancient empires such as Egypt, China and Rome. Wars have been fought over it.

Settlers have left the comforts of their homeland in search of it. Today, of the 10 nations that make up the largest agricultural producers in the world, 8 of them are in the top 10 total economies.

The amount of quality farmland is perhaps not only the most important component of a farmer’s individual balance sheet, but also the country’s.

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Iowa Land Values Could Suffer From Tariffs

Iowa land values are still strong, despite coming off of record highs a few years ago. Still, tariffs and trade uncertainty are likely to impact farmland values going into 2019, according to Kyle Hansen at Hertz Ag.

According to Hansen, a recent survey conducted by the Iowa chapter of Realtors Land Institute found that over the past six months the state average price of tillable land has come down 1.7%.

“It pretty much puts us to about the same values as what we had roughly a year ago,” Hansen told AgriTalk host Chip Flory.

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Despite Value, Midwest Farmland Disappearing to Residential Development

America has lost millions of acres of farmland over nearly three decades to urban and rural development.

Despite conservation work by state and local governments and increased financial incentives for farmers, urban development and the expansion of rural residential real estate over the past 25 years have devoured farmland throughout the country at at a speed not seen since the early 1970s.

From 1992 on, nearly 31 million acres of farmland have been developed for residential use around urban centers and in rural areas, according American Farmland Trust’s latest report, “Farms Under Threat.”

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Illinois Economist: Rented Land Likely Won’t Generate Profit In 2019

With dismal profit margins, farmers need to plan on cutting costs and negotiating lower land rental rates. University of Illinois (U of I) recently released crop budgets for three regions in Illinois based on historical returns and costs to discover dismal profit forecasts for the 2019 season.

“[Projected] return level is similar to return levels in 2005, more than 10 years ago,” said Gary Schnitkey and Krista Swanson from U of I in a recent news release. “In 2005, average cash rent in norther Illinois was $137 per acre, [which is] $101 per acre lower than current cash rents.”

Even stellar yields won’t necessarily improve profit possibilities. U of I research indicates even a 221 bu. per acre corn-after-soybean yield would result in returns of $218 per acre without land cost. This is still below the $238 per acre average cash rent for the area.

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U.S. Soy Seizes EU Markets, Bolstering Trump Trade Deal

SALZBURG, Austria, Sept 20 (Reuters) - The United States has supplanted Brazil as the European Union’s top supplier of soybeans since a deal in July with President Donald Trump to avert a trade war, according to EU data seen by Reuters on Thursday.

In the 12 weeks to mid-September, U.S. soybeans accounted for 52% of imports to the EU, rising 133% compared with the same period last year to 1.47 million tonnes. The United States had just 25% of the market in the same period of 2017.

Imports from Brazil dropped to a 40% share of the bloc’s roughly 35-million-tonne annual import market for the animal feed staple.

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New Leadership, New Structure For Corteva Agriscience

Earlier this week Corteva Agriscience, the Agriculture Division of DowDuPont, announced changes to leadership in both members and structure.

Earlier this week Corteva Agriscience, the Agriculture Division of DowDuPont, announced changes to leadership in both members and structure.

“With each of these business units, North America for instance, [Corteva] is putting strong leaders in place [to] look over these growers [who will] notice speed and agility, a real connectivity to the marketplace and a very decentralized organization so that decision making is at the optimal place—with the Corteva employee calling on growers,” Collins says.

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Farmland Sale: Top Bid of $8,450 for 400 Acres in North-Central Iowa

Land buyers in the northwest Iowa county of Emmet have not had farmland hit the market since the end of 2017. Thus, prospective buyers had September 19 circled on their calendar. That’s when the sale of 400 acres of high-quality farmland were to be sold by Peoples Company at auction.

The property, divided into two quarter-sections and an 80-acre tract, had been family-owned for 60 years. The heirs decided it was time to let it go, and taking the farm to auction seemed to be the prudent thing to do.

“This area has been quiet as far as sales go,” explains Andrew Zellmer, land broker at Peoples Company. He adds that there are established farm families in Emmet County seeking expansion opportunities. This sale was the right property at the right time.

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In Memory

Kenneth V. Fiske
Woodstock, Illinois
ASFMRA has just learned some very sad news. Kenneth V. Fiske passed away last December (2017). ASFMRA was honored and pleased to welcome Ken into the membership in 1950 as a Professional member. He maintained his Professional membership until he transferred to the Retired membership classification in 1991. Ken was honored for his 65 years of membership with ASFMRA in 2015 in San Antonio, Texas during the Annual Conference. Ken was very proud of his membership and remained active. He made many friends through his association with the Society and he will be missed greatly. Our thoughts and prayers are with Ken's family.

Michael E. Jewett
Ventura, California
ASFMRA was honored to welcome Mike into the membership in 1981. He obtained his Accredited Rural Appraiser (ARA) designation in 1984. ASFMRA has been informed that he passed away on September 19, 2018. Additional information that was sent to ASFMRA regarding Mike’s life included: ” Mike was born and raised in Ventura, attending local schools and graduating from UC Davis. He worked for many years as manager of the Federal Land Bank in the Tri-Counties before it combined with Production Credit Association to become Farm Credit. He worked as an independent fee appraiser and was active in both the chapter and the national ASFMRA. His reputation was unparalleled as he helped guide the occupation of farm appraiser from an informal, loose-knit group to a professional, well-educated, organized and disciplined industry. Upon his retirement, he and his wife Pat moved to Fallbrook where they have lived for the past several years.” Mike made many friends during his association with the Society and he will be greatly missed. Our thoughts and prayers are with his wife and family.
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