Big Changes Ahead in Land Ownership and Farm Operators?
Dig into U.S. farmland tenure to see what’s happening and what’s likely for the future, and Carson Futch’s 87-year-old dad, Alvin, is very typical.
Carson, a real estate agent specializing in farmland for Lakeland-based Saunders Real Estate in central and south Florida, says his dad was a fifth-generation farmer with no family members who wanted to farm, so he put his land into a family corporation and has rented it out for decades to another large farmland manager for growing strawberries.
It often happens, he says: “Farmers have invested in their land and in their operation all these years, so their land is where they will get their retirement money.”Read About the Changes.
Farmland Supply Overshadowing Demand
The basics of supply and demand are playing out in the farmland market. For now, supply has the edge.
“At this time, there are enough buyers at most sales to bid up the price to a good level for the seller,” says Randy Dickhut, senior vice president of real estate operations for Farmers National Company. “But in the coming months, will buyers become even more cautious while at the same time will we see more land come up for sale for various reasons?”
This tight balance leaves farmers, lenders and investors on edge—and farmland values stable. What Does High Demand Mean for the Market?
Unknowns’ Making Predictions More Difficult for Farmers
Commodity markets are full of uncertainty under normal circumstances. Weather, economic conditions, political decisions at home and overseas — all can make futures trading an unsuitable profession for the faint of heart.
But these are not normal times, and that makes predicting the markets fraught with even more peril, according to Dr. Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri-Columbia.
Westhoff, whose team of economists at FAPRI provides analysis for members of Congress on farm programs and other agricultural economic issues, talked about “The Market Outlook and the New Farm Bill” during a University of Arkansas Food and Agribusiness Webinar on Jan. 24.
“One thing I want to talk about upfront is what’s missing, things that we would normally know right now that we don’t know, partly because of the government shutdown and partly because of government trade disputes,” said Westhoff.
How can Farmers Predict the Future?
Market Volatility Can be an Opportunity
Virginia Tech Economist Dr. David Kohl sees another year of low margins and high volatility for crop producers.
“While we think volatility is a challenge, it is actually an opportunity. What you have to do is have the discipline to execute and market these commodities to capture that window of profitability. There won’t be a lot of home runs, but a lot of base hits,” said Kohl, professor emeritus of agricultural and applied economics at Virginia Tech, at the 30th North Carolina Commodities Conference at in Durham.
Kohl urges farmers to manage around the headlines. “If all you do is pay attention to the headlines, you’re not going to do anything. Don’t get caught up in all the noise. Focus on what you can control in your business,” he said.Is Volatility a Challenge or an Opportunity?
It’s Time to Plant the Seeds of Growth in Sustainable Agriculture
Sustainable farming is getting a new lease on life. The deterioration of the environment and the depletion of resources—both of which are already limiting the amount of food produced by the world’s farmlands—are motivating regulators, consumers, food companies, and farmers to compel agricultural companies to adopt sustainable methods and processes. Despite companies’ lingering complacency, these stakeholders are driving a transformation that seemed impossible only a few years ago.
Some agricultural companies—including seed companies, crop nutrition providers, crop protection producers, and farming equipment manufacturers—have adopted aspects of sustainable practices in disparate parts of their operations. And many have launched new products or improved existing ones, such as crop protection agents, that facilitate sustainable activities, target specific pests, and can be used in smaller doses. These are welcomed innovations that may enable farmers to increase their profitability while preserving the environment. But while some companies are innovating and paying more attention to sustainable practices, most are still lagging behind and have not made sustainable farming an essential element of their fundamental business activities. The new pressure from stakeholders makes that attitude, well, unsustainable.Read More about the Seeds of Growth.
Farmer Confidence Surges, is Highest Since Trade War Began
With Trump tariff payments boosting Corn Belt farm revenue, farmer confidence shot to its highest level since last June, just before the trade war began against China, said the monthly Ag Economy Barometer published by Purdue University. Producers polled by Purdue said they expect ag exports to increase in the years ahead, an indirect sign they expect a beneficial resolution with China.
President Trump has set a March 1 deadline for a Sino-U.S. agreement or he will order a steep increase, to 25%, in tariffs on $200 billion worth of Chinese products. China retaliated against previous U.S. tariffs by setting high duties on U.S. goods, including farm exports. The most prominent ag target is soybeans. China used to buy 1 in 3 bushels of the U.S. crop. Sales have plummeted, although China said it would buy 5 million tonnes of the oilseed this month while bilateral negotiations are held.Why Farmers Are So Confident.
What Farmers Need to Know About Growing Hemp
Farmers have a lot of questions about hemp, so we asked expert Michael Bowman, founding chair of the National Hemp Association, to answer a few.
SF: What is the history of hemp?
MB: Hemp was poised to be a billion-dollar crop in the 1930s with Henry Ford a big supporter, but the Marijuana Tax Act of 1937 killed the growth of the industry. We had a brief respite during WWII with the Hemp for Victory campaign, in which we grew hundreds of thousands of acres in six Midwestern states, but the tax was reenacted after the war. Then in 1970, President Nixon included hemp in Schedule I of the Controlled Substances Act as his middle finger to the anti-war people.Read all of Michael's Answers.
What is the Future of Container Farming?
Over the past two decades, technology has allowed for drastic evolutions in many industries, such as the auto and retail industries. At first glance, the agricultural space seems to have lagged behind. Despite a clear desire for locally grown produce, today more than half of the fresh fruit and over one-third of the fresh vegetables that Americans buy is grown outside of the United States.
Desire for local produce, combined with improvements in hydroponic, lighting and other technologies, has attracted participants looking to grow in controlled environments (“Controlled-Environment Agriculture” or “CEA”). Popular forms of CEA include greenhouses – both ground level and rooftop, buildings, and 40 to 53-foot shipping containers re-purposed for growing.Get to Know the Future.
Appraisal Standards Board to Issue Fourth Exposure Draft for 20-21 USPAP
ASB Commitment to Open and Inclusive Process Worked
(Scottsdale, Arizona) February 8, 2019 – After careful consideration of public comments, the Appraisal Standards Board, an independent board of The Appraisal Foundation, unanimously agreed to move forward with a fourth exposure draft for the 2020-21 edition of the Uniform Standards of Professional Appraisal Practice at its public comment meeting today in Scottsdale, Arizona. The ASB will issue the fourth exposure draft within the next few weeks. At that time, the ASB will announce the date and place for its next public meeting, where final adoption of changes for the 2020-21 USPAP is expected.
“Throughout this process, the Appraisal Standards Board has been committed to the widest public exposure of the 2020-21 USPAP edition,” said 2019 ASB Chair Wayne Miller. “After hearing the comments today, especially about the single reporting standard issue, the ASB decided it was critical to issue a fourth exposure draft.”
“The ASB clearly heard the concerns,” said Vice President, Appraisal Issues for The Appraisal Foundation John Brenan. “This demonstrates that the open, transparent, and inclusive process worked.”
The public exposure of proposed changes for the 2020-21 edition of USPAP has been extensive with comments coming from the three exposure drafts, discussion at The Appraisal Foundation Advisory Council, Industry Advisory Council, appraisal discipline resource panels, and multiple webinars.
People's Company Acquires a Share of Value Midwest
(CLIVE, Iowa) – Peoples Company, a leading provider of land brokerage, management, investment and appraisal services in 21 states, today announced it is acquiring a share of Value Midwest, a well-respected Marlette, Michigan-based appraisal firm. In coming to an agreement, Peoples Company increases their team of expert appraisers with deep agricultural experience, while Value Midwest harnesses Peoples Company’s existing brokerage, land management and investment services.
“Mark Williams and the Value Midwest team have built a reputation of being industry leading appraisers, particularly on agricultural properties, but also on unique tracts across the Midwest and beyond,” said Peoples Company president Steve Bruere. “With experience in thirty states, joining forces with Value Midwest makes sense for our company and our clients. Peoples Company’s footprint will expand, our appraisal expertise will grow, but our personalized service will remain.”
Value Midwest (VM) will continue to operate based in Marlette, Michigan, while Peoples Company will continue to be headquartered out of Clive, Iowa. Since 1992 Value Midwest has provided quality valuation services coast to coast for a variety of agricultural properties including dairy & hog farms, irrigated & dry cropland, seed corn farms, permanent plantings (grapes, apples, cherries, etc.) and certified organic cropland. In addition, VM is an industry expert in the valuation of conservation easements, pipeline easements, and has completed statewide ag studies in more than 30 states.
“We appreciate the opportunity to partner with Peoples Company. They are an industry leader in land brokerage, management, appraisal and investment services. In our business, we often find that combining two land sites into one offering makes the larger tract far more valuable than the two sites’ original combined value. I can’t help but see the similarities in this business agreement where both Peoples Company and Value Midwest, in sharing expertise and service, will have a greater reach and be able to better serve our clients,” said Mark Williams, President of Value Midwest.
He added, “Peoples Company and Value Midwest have an industry reputation of being ‘problem solvers’ in the customer service business. We want to share those resources with the ag community, coast to coast. Simply put, with this agreement in place, both Peoples Company and Value Midwest have expanded the depth and breadth of our industry expertise.”
For more information on the two companies, please visit their respective websites at www.PeoplesCompany.com