Land Sales Picking Up
But low crop prices along with tariff and trade uncertainly will keep a lid on bids. Interest in selling agricultural land is picking up among landowners in the Midwest, according to reports from farm real estate agents. The amount of land Farmers National Co. has listed for sale is up 21% compared to last year at this time, says
Randy Dickhut, senior vice president of real estate operations at Farmers National.
“Most of the sales are coming from individuals or ownership groups who are deciding now is the time to sell,” he says. “They may have recently inherited the land or have owned it for years, but sellers have watched the land market, and some are deciding to take advantage of the still historically good land prices. Some sellers are thinking there is more downside risk in land prices than upside potential; so for them, now is the time to sell.”
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Cannabis Names A Commodity Crop in the 2018 Farm Bill
While the full text of the 2018 farm bill hasn't been released yet, U.S. Rep. Collin Peterson, D-Minn., says the new bill will look a lot like the one that expired in September. What isn’t the same in the expired bill? Cannabis, in the form of industrial hemp, receives crop status in the bill, opening a significant door for farmers growing it.
Official release of the farm bill will be next week, due to memorials and the funeral of former President George H.W. Bush, says ProFarmer policy analyst Jim Wiesemeyer. Congressional leaders have still not determined when the House and Senate will vote on the measure.
The farm bill is done, including most, if not all, estimates from the Congressional Budget Office, despite reports to the contrary, Wiesemeyer says. Getting the bill done was a challenge. "We've had problems trying to button this thing up," Peterson, the ranking Democrat on the House Agriculture Committee, told reporters at a news conference in Moorhead. "Frankly, it's a damn miracle we got it done."
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40 Acres of Farm Land in America Is Lost to Development Every Hour
Picture bulldozers plowing up pastures and cornfields to put in subdivisions and strip malls. Add to this picture the fact that the average age of the American farmer is nearly 60—it's often retiring farmers that sell to real estate developers. They can afford to pay much more for property than aspiring young farmers.
Alarmed by this trend, environmentalists back in the 1970s developed the idea to pay retiring farmers to preserve their land in a natural state rather than sell out to real estate developers. Since then, thousands of nonprofit "land trusts" have sprung up to support the cause, 29 states now have funding programs to support them, and the federal government has offered a hefty tax break to landowners who sign a "conservation easement," which is legalese for a document that prevents a parcel from being paved over, in perpetuity, no matter who buys it.
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How the New Tax Cuts and Jobs Act Affects Your Tax Planning
There are two or three important benefits that the Tax Cuts and Jobs Act (TCJA), signed into law December 2017, offers farmers in the 2018 calendar year. Let’s take a look at those, as well as a few things to watch out for, or at least be aware of, as you head into tax season on your farming operation. Income tax brackets are wider and tax rates are lower. As an example, a married couple who reported $75,900 of taxable income in 2017 hit the high end of the 15% income tax bracket. For 2018, that same couple could report $77,400 of taxable income – hitting the high end of the 12% bracket. Additionally, the top 2017 rate of 39.6% starting at $470,700 married filing jointly taxable income is now 37% starting at $600,000.
Depreciation rules are more favorable....
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Blockchain Altering Ag Commodities Trading
Blockchain is still in its very earliest days, but those working in the field say the technology will be game changing, just like the internet.
When people hear the word “blockchain” they more often than not think of cryptocurrency such as bitcoin. But blockchain experts say the technology goes far beyond bitcoin and predict it will be a major force in all sectors of the economy, including agriculture. Blockchain is a hot topic in the tech world right now. Many are saying it will do for data management what the internet has done for information and communication: Allow for the decentralization and democratization of data. In essence, blockchain is a distributive ledger database that stores blocks of digital data with each block in the chain representing a transaction. There is no central single control or management of blockchain and the data is publicly shared and continually reconciled.
Read more about this digital future.
Energy Revolution Coming in Next Decade
Ex-Tesla Motors official believes electric tractors, other innovations will virtually eliminate growers’ fuel costs. Disruptive change is likely coming to California agriculture in the next decade, as technological improvements will lead to electric tractors and alternative-energy storage that will virtually eliminate farms’ energy costs. So suggests David Deak, an expert in “disruptive innovation” who has served as senior development engineer at Tesla Motors, Inc., and chief technology officer at Lithium Americas Corp.
“I imagine running an almond orchard with zero cost of energy,” Deak told a luncheon audience Dec. 5 at the Almond Conference in Sacramento, Calif. “What’s really limiting us? Not time, because we have plenty of that. And it’s not money, because there’s some of that, too. It’s actually knowledge. We need new ideas, or taking some old ideas and putting a new perspective on it.”
Read about his new perspective.
Become An Employer of Choice
Helping employees thrive is key to retaining reliable workers. Finding and keeping employees who are a good fit for your farm can, of course, be challenging in today’s tight job market. There are steps you can take to increase the odds of finding and retaining those individuals who make a good match for you.
Becoming an employer of choice in a competitive job market is key. “Finding employees who are seeking jobs on farms is getting harder by the minute,” says Jennifer Blazek, University of Wisconsin Extension dairy and livestock agent. “Part of that has to do with the culture of today’s younger generations. They simply don’t want to work on a farm.”
For dairy farmers in particular, who have relied heavily on immigrant employees, the hiring challenges are becoming critical. The pool of immigrant workers is dwindling, with alternative replacement candidates few and far between.
Tips for success.
Will China Buy U.S. Soybeans?
The U.S. said China agreed to immediately restart purchases of agricultural products, this wasn't mentioned in the Chinese statement. For a soybean farmer in Iowa or Illinois, it may be premature to celebrate the ceasefire in the trade war between the U.S. and China. After all, there’s still no sign of any easing in the 25% retaliatory tariff that China levies on imports of American soybeans, and while the U.S. said China agreed at the summit in Buenos Aires to immediately restart purchases of agricultural products, this wasn’t mentioned in the Chinese statement.
Plus, market moves on Monday in reaction to news of the truce have so far only worsened crushing margins in China, with benchmark soybean futures rising in Chicago and soybean meal and soybean oil declining in Dalian. An indicative calculation based simply on futures, exchange rates and prevailing taxes, shows a profit of about $13 a metric ton for processing U.S. beans in China. But that doesn’t include freight, insurance or other fees. So, the market doubts there can be any commercial purchases without a cut in tariffs, said Monica Tu, an analyst at researcher Shanghai JC Intelligence Co.
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Microsoft Bringing AI to Ag
Standing before a crowd of farmers at the 2018 Farm Journal AgTech Expo, keynote speaker Josh Henretig voiced what he believed a lot of farmers were thinking. “Why is someone from Microsoft, the company that brought you Windows Office and Xbox standing in front of you today?” asked Henretig, senior director, artificial intelligence (AI) for earth for Microsoft. One of the answers, he said, is that Microsoft views the planet as the ultimate operating system and that information technology, in particular artificial intelligence, can help the company monitor, model and respond to the need to help feed the planet and address global health issues. He notes that Microsoft leaders see the company’s role in the process as “unchanged” from its core business model and can “provide the connective tissue to enable the technology ecosystem to tackle these challenges.”
The desire to provide that connective tissue is one of the reasons Microsoft established the AI for Earth Program, which was funded with $50 million and a 5-year commitment from Microsoft President Brad Smith in December 2017.
Three additional goals for the program are to 1) enable the company to anticipate and respond to climate-related issues, 2) support energy, carbon, water and waste projects that reduce the environmental impact of Microsoft’s operations, 3) and help establish Microsoft as a thought leader and innovator on key environmental issues.
How does Microsoft plan to support ag?
Rabo AgriFinance and Conservis Partner
Partnership translates farm data into financial management. Rabo AgriFinance and Conservis will co-develop technology that makes it possible for U.S. crop farmers to seamlessly connect their real-time field and management data with financial results.
“To have two companies already working with farmers pair up like this, so I can break down the wall between the mountains of farm data and my financials, is something great,” says Aaron Lee, general manager of Cornerstone Family Farms in southern Indiana near Salem. “No other farm management platforms have cracked that nut.”
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