Today’s Land Market is Holding Its Breath; Uncertainties Persist
Questions abound in the current land market. Will the negative farm financial situation finally overcome other factors to drive land prices the final leg lower? Will outside influences put more stress on land values or actually support prices? Will regional pockets of stress spill over into the overall land market?
Farm and ranch land is the key financial bedrock for American agriculture as land makes up 82 percent of total assets for the industry. With today's uncertainties in agriculture, everyone involved with owning, buying or selling ag land is holding their breath to see what will happen next with the market and prices.
"At Farmers National Company, we are seeing an uptick in our land sales as more families and inheritors want to sell now," said Randy Dickhut, senior vice president of real estate operations. "Within our 28-state service area, we are also seeing more landowners coming to us to market and sell their land as evidenced by our volume of land for sale increasing 21 percent. These landowners are just deciding now is the time to sell and capture today's price."What Does This Year Have in Store For Land Values?
Ecological Assets Boost Western Farm and Ranch Land Value
Eco-Asset Solutions and Innovations (EASI) confirmed today that ecological assets contribute an average of about $40,000 per acre in gross land value for mid-to-large sized farms and ranches in the Western region, according to William Coleman, EASI’s founder and CEO.
The company has just completed its 11th eco-asset value study in the past two years. “People are surprised to learn how much value lies in land-based ecological assets,” said Coleman. “They can’t imagine that that tens of thousands of dollars in per-acre value might have gone unseen for so long.”
Ecological assets, eco-assets for short, include compensatory mitigation credits for protection of wetlands and streams, rare species and habitats, for prevention of nutrient runoff, and for forest and soil carbon sequestration. Eco-Assets have been around since the 1980s when wetland mitigation banking began. California first began conservation banking for rare species and habitats in the 1990s. Water quality or nutrient trading began in the 2000s with EPA-approved programs in the eastern U.S. Carbon sequestration was also initiated by EPA in the same time frame.EASI’s specialty is in understanding and advancing the market for land-based eco-assets including those in watersheds. Based on their 2018 assessment of government approved mitigation banks, landowners currently hold more than $200 billion in mitigation credit assets coast to coast. The annual transaction value for mitigation credits is between $1.5 and $2 billion based on more than a thousand mitigation credit value records EASI has gathered as part of its project work.What are Eco-Assets?
2018 Incomes Better Than Expected
Agricultural conditions and farm incomes were mixed in the most recent Federal Reserve System’s Beige Book.
The report reflect conditions from mid-October through late November 2018 based on information provided by market experts, bankers, economists and other sources.
“Although the harvest took longer than normal, corn and soybean yields were quite large. And, in spite of low prices, crop producers’ incomes were better than what had been expected earlier this year,” according to the Seventh Federal Reserve District of Chicago report, which includes the northern two-thirds of Illinois and Indiana and all of Iowa, Wisconsin and Michigan.
“However, crop sales were lower than normal, and a record amount of the harvest was put into storage. This reflected in part higher prices for delivery in later months compared to prices for delivery at harvest. Logistical challenges continued as soybeans that would usually be exported to China were being sent to other markets.
“Farm equipment dealers reported giving large discounts in order to make sales as many crop farmers continued to face financial challenges. Hog and cattle prices moved higher during the reporting period, but milk prices floundered in part because of weak exports. Farm mediation services remained in demand for troubled operations.”Read the Federal Reserve Report.
Day 32 of the partial government shutdown brings no relief in sight. The Administration and Congress have made no progress to date to end the shutdown. The Administration is scrambling to provide some relief as the shutdown drags on. USDA Secretary Perdue announced last week that the Farm Service Agency will reopen some county offices for three days (last Thursday, Friday and this Tuesday, closed Monday for Martin Luther King holiday) to process farm loans and provide 1099 tax documents. New applications for MFP were not being processed.
The Secretary said in a statement: “Until Congress sends President Trump an appropriations bill in the form that he will sign, we are doing our best to minimize the impact of the partial federal funding lapse on America’s agricultural producers,” Perdue said. “We are bringing back part of our FSA team to help producers with existing farm loans. Meanwhile, we continue to examine our legal authorities to ensure we are providing services to our customers to the greatest extent possible during the shutdown.” You can find the open county offices here
The Risk Management Agency remains shutdown with a few staff deemed essential in the Kansas City office reporting for work to maintain computer systems. Those staff have been able to provide some price election information during the shutdown as we start to hit some sales closing dates in January.
Trump Talks Trade and Border Security at AFBF
President Donald Trump, in his second address in as many years to the 100th annual convention of the American Farm Bureau Federation on Monday in New Orleans, emphasized the need for security at the border with Mexico and alternately pointed to trade wins, while highlighting specific farmers across the country. He even brought one rancher on stage for an impromptu speech.
Trump had spent most of the first half of his nearly hourlong speech talking about border security and the need for a barrier at the Southern border when he called Arizona rancher Jim Chilton to the stage. Chilton, whose ranch lies next to the border, was succinct at the microphone from beneath his cowboy hat: “Mr. President, we need a wall. We need a wall all around, all the length of the border.”Read the Full Story.
Comment Deadline Approaching on Raising Residential Real Estate Threshold
The deadline, February 5, 2019, is approaching to submit comments on the proposal by the OCC, Fed, and FDIC to raise the appraisal threshold for residential real estate transactions. The proposed rule would increase the threshold level at or below which appraisals would not be required for residential real estate-related transactions from $250,000 to $400,000. Consistent with the requirement for other transactions that fall below applicable thresholds, regulated institutions would be required to obtain an evaluation of the real property collateral that is consistent with safe and sound banking practices. ASFMRA along with AI and ASA have been meeting with Congressional staff to bring this proposal to their attention. In addition, ASFMRA along with 16 other organizations have requested a public hearing on the matter once the comment period has closed.
You can comment on the proposal here.
FarmlandFinder Selected as Farm Bureau Rural Entrepreneur of the Year
FarmlandFinder is the American Farm Bureau Federation’s Rural Entrepreneur of the Year, AFBF officials said today. Team lead Steven Brockshus won the Ag Innovation Challenge by beating three other teams from across the nation. AFBF, in partnership with Farm Credit, announced the winner at AFBF’s 100th Annual Convention.
Iowa-based FarmlandFinder, which aims to make the world’s farmland-availability information accessible, took home an additional $15,000 for a total of $30,000 in prize money as Farm Bureau Rural Entrepreneur of the Year.Meet All of the Winners.
The World’s Next Largest Global Economy
The world is far more dynamic, fluid, and technology driven than most appreciate. Consider: What country will be the world’s next largest economic power? What country will have technological supremacy in 2025? What country will have financial supremacy in 2035? What country will have military supremacy in 2047?
The answer to the first question provides insight into the near- or longer-term resolution of the United States and Chinese policy negotiations and market outlook, especially in the first half of 2019. See The Outlook Expectations.
A Broader Look at Drone Technology
CES, or what they used to call the Consumer Electronics Show, is a magnet for a wide range of technology. Farm Progress got a chance to attend the 2019 event. This first look at tech from the huge event starts with drones, or unmanned aerial vehicles.
This is a hot area — and one where more innovation is happening. A good part of drone use is in the motion picture industry, where these compact machines with high-resolution cameras are replacing helicopters on shoots. Innovations in those areas, however, do translate into future tools that could come to market.
There’s a growing business in racing drones, not covered here, which may provide added control innovations in the future. And while there are many drone companies with both fixed-wing and multiprop models, DJI is still the market king. That company has more than 75% of the drone market, but there are a range of players that are knocking at the door.
At this year's ASFMRA Annual Conference
, we will address converging Technology and Ag. Join us in Louisville, KY in November!See The Innovative Technology.
Democrats Name House Agriculture Committee Members
Last week, House Agriculture Committee Chairman Collin Peterson (D-MN) announced the members of the House Agriculture Committee for the first session of the 116th Congress. The Republicans will likely announce its roster this week. There are 26 Democrats serving on the Committee. Half of the Democrats are new to the Committee. The House Agriculture Committee members by order of seniority are: Chairman Collin Peterson (MN), David Scott (GA), Jim Costa (CA), Marcia Fudge (OH), Jim McGovern (MA), Filemon Vela (TX), Delegate Stacey Plaskett (VI), Alma Adams (NC), Abigail Spanberger (VA), Jahana Hayes (CT), Antonio Delgado (NY),T.J. Cox (CA), Angie Craig (MN), Anthony Brindisi (NY), Jeff Van Drew (NY), Josh Harder (CA), Kim Schrier (WA), Chellie Pingree (ME), Cheri Bustos (IL), Sean Patrick Maloney (NY), Salud Carbajal (CA), Al Lawson Jr. (FL), Tom O’Halleran (AZ), Jimmy Panetta (CA), Ann Kirkpatrick (AZ), and Cindy Axne (IA).Congressman Filemon Vila will chair the General Farm Commodities and Risk Management Subcommittee. Several members, such as Cheri Bustos and Jimmy Panetta have dropped in seniority on the Committee as they have taken other committee assignments (Appropriations and Ways and Means respectively) and remain on the Agriculture Committee via a waiver process.
The Appraisal Foundation Opens Call for Board of Trustees Members
The Appraisal Foundation announced today it opened a call for qualified candidates to fill three at-large trustee positions for its Board of Trustees, which is the governing body of The Appraisal Foundation. The three individuals elected will serve three-year terms beginning on January 1, 2020.
“Our annual call for applicants is a real opportunity to cast a wide net for candidates that bring leadership and non-profit management experience who also have a deep interest in advancing the appraisal profession,” said David Bunton, president of The Appraisal Foundation. “Those individuals elected will have an impact on a profession that the public trusts to determine the underlying value of assets that bolster the world’s most powerful economy, while also navigating rapid change brought on by technological advancements.”
The Board provides financial support and oversight to the Foundation’s two independent boards, the Appraiser Qualifications Board and the Appraisal Standards Board. The Board meets twice a year in-person in the Spring and Fall, and while Trustees are reimbursed for travel expenses, they are not compensated for their time.
Elected members of the Board of Trustees may include individuals from all appraisal disciplines, users of appraisal services, former appraiser regulators, academics, and business leaders. Of the three seats available on the Board, two are currently held by incumbents. Throughout the search process, the Trustee Nominating Committee will be committed to creating a diverse board of the best and the brightest who are dedicated to advancing the appraisal profession.
Completed applications for Board vacancies must be received by March 25, 2019. Please contact Board and Councils Program Manager Arika Cole at 202.624.3072 or email her at email@example.com about the application process.
The Appraisal Foundation is the nation’s foremost authority on the valuation profession. The organization sets the Congressionally-authorized standards and qualifications for real estate appraisers, and provides voluntary guidance on recognized valuation methods and techniques for all valuation professionals. This work advances the profession by ensuring appraisals are independent, consistent, and objective. More information on The Appraisal Foundation is available at www.appraisalfoundation.org.Apply Here.
House Democrats Agriculture Appropriation Subcommittee Members Named
Also last week, the Democrats named members to the Appropriations Committee as well as Subcommittee assignments. The Republicans have announced that Congressman Jeff Fortenberry (R-NE) will be the ranking member on the Agriculture Subcommittee but have not announced other members. The Democrats are: Subcommittee Chair Sanford Bishop Jr. (GA), Rosa DeLauro (CT), Chellie Pingree (ME), Mark Pocan (WI), Barbara Lee (CA), Betty McCollum (MN), Henry Cuellar (TX), and Nita M. Lowey (NY), Ex Officio, as she is the full Appropriations Committee Chair.
Welcome New Members!
Help us welcome the newest members to ASFMRA! We are thrilled that you have chosen ASFMRA as the organization to be affiliated with. Because of you, ASFMRA continues to grow and support rural property professionals across the nation!
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!Preston Aaron
in Black Rock, AR (Mid-South Chapter)Erica Adams
in Hastings, NE (Nebraska Chapter)Ty Alexander
with Farmland Management Services in Shafter, CA (California Chapter)Attylissa Bailey
in Ames, IA (Iowa Chapter)Emmanuel Benjamin
with Hancock Farmland Services in Turlock, CA (California Chapter)Jakob Brewer
in Jonesboro, AR (Mid-South Chapter)Brent Carper
in Ward, AR (Mid-South Chapter)Sadie Christianson
in Moorhead, MN (Minnesota Chapter)Josh Dutton
in Star City, AR (Mid-South Chapter)Christopher Foy
in Jonesboro, AR (Mid-South Chapter)Dustin Hamlett
in Kennett, MO (Mid-South and Missouri Chapters)Bailey Hoerbert
in Mackinaw, IL (Illinois Chapter)Vic Hunter
with Southwest Ga Farm Credit in Bainbridge, GA (Georgia Chapter)Michael Keith Koenecke
with Cotton Grave Farm Management in Spencer, IA (Iowa Chapter)Joel Kraemer
with EG Valuation in Menomonie, WI (Wisconsin Chapter)Haley London
in Conway, AR (Mid-South Chapter)Caleb Lucius
in Paragould, AR (Mid-South Chapter)Blake Mari
with Premier Farm Credit in Sterling, CO (Colorado Chapter)Emilee Martin
in Paragould, AR (Mid-South Chapter)Jessie Morische
with Agri Management Services in Marion, IA (Iowa Chapter)Hannah Pierson
in Minnewaukan, ND (North Dakota Chapter)Heather Price
with Steigerwaldt in Tomahawk, WI (Wisconsin Chapter)Zachariah Rick
in West Fargo, ND (North Dakota Chapter)Bradley Slomp
with Serecon Inc. in Calgary, AB (Ontario Chapter)Tyler Smith
in Manila, AR (Mid-South Chapter)Logan Street
in Cedar, IA (Iowa Chapter)Jacob Styan
in Sadorus, IL (Illinois Chapter)Jolee Wessling
with Farm Credit Services of America in Perry, IA (Iowa Chapter)Elizabeth Wilcox
with Advantage Land Company in Sturgis, SD (South Dakota Chapter)
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. We thank you for spreading the word, you are the driving force behind our continued growth! 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!Jeff Berg, ARAMaria BoerngenJohn CottonCarl Evers, AFMJackson HegerfeldMark Hutson, AFMBen IsaacsonRyan LebsackAdam PavelkaTraci SchermerhornDeb StanbroLee SteigerwaldtW. Scott Westbrook
Thank you to all who have referred someone and in some cases, more than one, to join ASFMRA.