USDA Says Farm Real Estate Prices Holding Up, But Worried About a Fall
USDA Says Farm Real Estate Prices Holding Up, But Worried About a FallThe U.S. Department of Agriculture is concerned about a potential decline in farmland real estate prices, but has seen no sign of that happening so far, USDA chief economist Robert Johansson said on Thursday.
Farmland prices are a key pillar of equity for the U.S. agricultural heartland, which has been suffering from lingering weakness in commodity prices and loss of key export markets such as China due to President Donald Trump’s trade disputes.
A potential significant price-drop in farmland is something “we are concerned that may happen,” Johansson told Reuters in an interview on the sidelines of the USDA’s annual forum. “But land has been consistently able to withstand some of these pressures on farm income over the past five years for sure,” he said.
A key constituency for Trump, U.S. farmers have borne the brunt of his bitter trade disputes.
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Farmland Values Keeping Farm Economy Afloat
Farm income levels have been cut in half the last five years, yet the financial solvency of farm country remains strong. Speakers at the U.S. Department of Agriculture’s annual Agricultural Outlook Forum said how farmers and ranchers handle 2019 will be crucial in the ongoing economic situation in the countryside as the outlook does not seem to indicate improvement.
Robert Johansson, USDA chief economist, said falling commodity prices in recent years, for a host of reasons, have weighed on farm income. Over the past couple of years, the dramatic fall in net farm income seen in 2015 and 2016 seems to be leveling out to a lower level. The current expectation of farm income at $66 billion is a long way from the heights seen in 2013, he said. Looking forward, he doesn’t see things improving much, with net farm income expected to rise only slightly to $80 billion annually over the next 10 years.
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Farmland Values Hold Steady in Fourth Quarter; Indiana Up 3%
For 2018, annual farmland values in the Seventh Federal Reserve district were steady overall. Yet, values for "good" agricultural land in the fourth quarter of 2018 were up 1 percent from the third quarter, according to 183 survey respondents representing agricultural banks across the district. Although 75 percent of the responding agricultural bankers expected farmland values to be stable during the January through March period of 2019, nearly all of the rest expected farmland values to move down.
Deteriorating agricultural credit conditions continued to affect the district in the fourth quarter of 2018. Repayment rates on non-real-estate farm loans decreased in the October through December period of 2018 relative to the same period of 2017, and rates of loan renewals and extensions increased. Even so, about the same percentage (2.4 percent) of current agricultural borrowers were not likely to qualify for operating credit at the survey respondents' banks in 2019 as in 2018. Non-real-estate loan demand in the fourth quarter of 2018 climbed from the previous year's level, while funds available for lending were slightly lower than a year ago. The average loan-to-deposit ratio for the district (79 percent) was higher than a year earlier. Average interest rates on farm operating loans and farm real estate loans had moved up by the end of 2018 to levels not seen since 2010 and 2011, respectively.
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Fewer Farms and Less Extended Credit Noted in Chicago Fed Report
Deteriorating agriculture credit conditions and its ensuing stress on struggling farmers was a recurrent theme in the latest update released last week by Federal Reserve Bank of Chicago.
Using input from agricultural bankers across the Seventh Federal Reserve District, the report provides updates regarding farm income, farmland values and agricultural credit conditions from the fourth quarter of 2018.
David Oppedahl, a Senior Business Economist at the Chicago Fed says in the February edition of the AgLetter that repayment rates on non-real-estate farm loans decreased in the Oct. through Dec. period of 2018 compared to the same period last year, and the rates of loan renewals and extensions increased.
Wisconsin Dairies Affected
Don't Laugh -- the 'Green New Deal' Is No Joke
It’s easy to shrug or laugh off political proposals in the first few months of an odd-numbered year. Newly elected politicians hit the airwaves with all sorts of ideas that they campaigned on, blissfully ignorant of how the process of passing a bill through Congress is actually supposed to work.
But when it comes to the so-called “Green New Deal,” farmers and ranchers shrug and scoff at their peril.
Championed by socialist media darling Rep. Alexandria Ocasio-Cortez, this “deal” calls for an end to fossil fuels and 100 percent adoption of “clean” energy by 2030, according to the proposal’s full language as provided on the Green Party’s website.
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CoBank Report Says Gene-editing Tech is Game-Changing
Gene editing technology is increasingly recognized as game-changing, and according to a new report from CoBank’s Knowledge Exchange Division, it has the potential to live up to the hype.
“The low cost of gene-editing technologies position them as viable solutions to critical food system challenges including agricultural labor and water shortages, disease and chemical resistance, climate change, food waste and food security,” said Crystal Carpenter, senior economist, specialty crops, CoBank. “These technologies are relatively new and do face potential challenges, particularly with consumer acceptance. However, barring widespread rejection by consumers, gene editing will be a significant boon to producers, food and agriculture supply chains and allied industries in the years ahead.”
Get to Know the Technology
A Brief Take on Climate Change
Let’s talk about climate change.
Okay, for the handful of you still reading, let’s not talk about what climate change is, what causes it or what repercussions it might have to life on earth. All that’s above my level of understanding of earth science.
Let’s do talk about how agriculture might respond to an issue that’s not going away. Arguing that it’s a hoax is counter-productive. It’s one of those issues that, regardless of whether folks believe it or not, it’s going to be discussed and debated in Congress this session.
A modest suggestion for agriculture on climate change: Own it. No one understands better than farmers and ranchers how weather and climate (which I have recently learned are not the same thing) alters plans, threatens success and poses both danger and possibilities.
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DowDuPont Wins Final OK for Global Launch of New GMO Soybeans
DowDuPont Inc. has won the final international regulatory approval needed, from the Philippines, for a global launch of a new line of genetically engineered soybeans, the company said on Thursday.
The approval means seed companies can sell the soybeans, named Enlist E3, to farmers for planting as early as this spring without worrying about taking extra steps to keep the harvests out of export markets.
Enlist E3 soy, marketed by DowDuPont’s agriculture unit Corteva Agriscience, will eventually shake up the $40 billion U.S. soybean market – half of which is controlled by rival Bayer AG’s Xtend brand.
International Regulatory Approval Met
UNL Extension Economist Jim Jansen, AAC Talks Land Values, Leases at Women in Ag Workshop
There are many items that influence the value of Nebraska’s farm and grazing lands, including location, quality, dryland or irrigated crop production, commodity prices, interest rates and how many buyers want a particular property.
However, University of Nebraska-Lincoln Extension Economist Jim Jansen says the most important factor is earning potential.
Jansen, who splits his work time between Lincoln and the Northeast Research and Extension Center at Concord, was a workshop speaker Thursday at the annual Nebraska Women in Agriculture Conference in Kearney that concluded after lunch today.
He started his presentation with a question: “Did anybody’s property taxes go up last year?”
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Recent Storms Provde More Water for Farms
California's abundant snowpack and full reservoirs will apparently equate to more water for farmers and ranchers this spring and summer.
The U.S. Bureau of Reclamation and state Department of Water Resources both issued new allocations for contractors on Feb. 20, with growers in some parts of the Central Valley expecting to see their full allotments.
Most farms relying on federal Central Valley Project water are initially promised 70 percent of their requested supplies if they're north of the Sacramento-San Joaquin River Delta, and farms south of the Delta are set to receive 35 percent.
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Welcome New Members!
Help us welcome our 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!
New MembersRebecca Abbott with Farm Credit Mid America in Shelbyville, KY (Kentucky Chapter)
John Airy with Agri-Management Services in Marion, IA (Iowa Chapter)
Curtis Bearden with AgValue in Waleska, GA (Georgia Chapter)
Brady Brewer with Purdue University in W. Lafayette, IN (Indiana Chapter)
Kailyn Buchholz with Compeer Financial in Princeton, IL (Illinois Chapter)
Maria Camozzi with American AgCredit in Santa Rosa, CA (California Chapter)
Austin Hively with Farmers National Company in Honey Creek, IA (Iowa Chapter)
Chadd Jacobson with Farmers National Company in Holdrege, NE (Nebraska Chapter)
Jesse Lochman with Farm Credit Services of America in Red Oak, IA (Iowa Chapter)
Weston Olson with Olson Farms in Peru, IL (Illinois Chapter)
Taylor Orsag with Kokel-Oberrender-Wood Appraisal, Ltd. In Georgetown, TX (Texas Chapter)
Tyler Reiger with Halderman Farm management in Greensburg, IN (Indiana Chapter)
Marlon Ricketts with Farmers National Company in Rochelle, IL (Illinois Chapter)
Matthew Roby in West Sacramento, CA (California Chapter)
Matthew Schroer with Prairie Appraisal Services, LLC in Middletown, MO (Missouri Chapter)
Michael Spillman with AgValue in Chattanooga, TN (Georgia Chapter)
Daniel Stacy with Lewis & Seeley Appraisals, Inc. in Lufkin, TX (Texas Chapter)
Patrick Trainor with Homestead Capital in Mahomet, IL (Illinois Chapter)
Derek Vrtiska with The Pinnacle Agency in Lincoln, NE (Nebraska Chapter)
Alison Warner with Farmers National Company in Kearney, NE (Nebraska Chapter)
Casey Watson with First Mid Ag Services in Peoria, IL (Illinois Chapter)
Austin Wiesner with Powell Banz Valuation in Salem, OR (Oregon Chapter)
Brandon Wilcox with SW Irving & Associates in Guelph, Ontario (Ontario Chapter)
You Can Refer a Member Too!
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!
Paul Bonnell,
ARASteven Burrow, AFMBlake Florell, AFMTyler FoisterMark Gregg, ARAScott HoganRichard Isaacson, AFM, ARAMitchell Knudson, ARAMark Lewis, ARA, RPRAKenneth Schmitt, AFMTodd SlockDeb Stanbro Thank you to all who have referred someone and in some cases, more than one, to join ASFMRA.