Land Values Show Signs of Weakening
Many agricultural experts and economists have been warning for the past few years that we could be headed for a significant correction in farm land values in the Midwest.
Land value summaries showed that a reduction in average land values did occur in some regions of the U.S from 2014-16, including the Upper Midwest. Land values in the Midwest stabilized somewhat in in 2017, before showing some signs of decline in many areas in 2018.
Most experts point to low commodity prices and reduced farm profitability as the primary reasons for the recent decline in land values.
Iowa State University does a land value survey each December that is regarded as one of the best resources on trends for Midwest farm land sales.
Recognize the Signs
Farm Income Below $70 Billion - A New Average for U.S. Agriculture?
The USDA forecast net farm income, a broad measure of profits, of $69.4 billion this year. If accurate, the total would be the third year of net income below $70 billion since 2015. “We’re starting to see … a new average coming out here,” said USDA economist Carrie Litkowski during a webinar on Wednesday.
Farm income in 2019 will be far below the halcyon levels of early this decade, when a seven-year commodity boom propelled income to a record $123.4 billion in 2013 before collapsing due to abundant harvests worldwide. “In 2019, global production will continue to expand, trade challenges will persist, and these factors will continue to impact commodity prices,” said Agriculture Secretary Sonny Perdue in House testimony last week. “As a result, many farmers will continue to face tight bottom lines with fewer resources.”
Groups such as the National Farmers Union are calling for a stronger farm safety net because of sharply lower commodity prices. Yet, some analysts say that while income may be in a rut, the sector is sound financially.
Read the USDA Forecast
Negotiations Close to a Deal, But U.S.- China Trade War Not Over
The world’s two largest economies are nearing the finish line on a trade deal that could be signed by President Donald Trump and his Chinese counterpart Xi Jinping as early as this month. But that doesn’t mean the trade war ends.
More work remains on a deal that will ensure that Beijing will follow through on its commitments, U.S. Trade Representative Robert Lighthizer told Congress last week. Days later, Trump warned he can still walk out on China like he did with North Korean leader Kim Jong Un at their summit over a nuclear deal in Vietnam.
There was a sign of de-escalation on Tuesday, when the U.S. confirmed it’s postponing “until further notice” a scheduled tariff increase on Chinese goods. It had been set to take effect March 1, but now the rate will remain at 10 percent, according to a statement from the U.S. Trade Representative’s office.
Will A Deal Happen?
U.S. Trade Policy Flux Hurting Farmers
Purdue Economists Say Agriculture Still Benefits if U.S Re-enters TPP
Backing out of the Trans Pacific Partnership (TPP), renegotiation of the North American Free Trade Agreement (NAFTA), an ongoing trade battle with China and resulting retaliatory tariffs against the United States are all trade policies that are costing U.S. farmers dearly, according to an updated Purdue University analysis released on Monday.
An initial analysis was completed by Purdue economists Maksym Chepeliev, Wallace E. Tyner and Dominique van der Mensbrugghe in October 2018. The updated study said a U.S. re-entry into TPP would turn a current agriculture trade loss into a gain. In addition, the study says that backing out of NAFTA and failure to implement the USMCA, would lead to an additional $12 billion in annual losses in agriculture export revenues.
Read the Full Analysis
Artificial Intelligence Belongs in Agriculture
South by Southwest (SXSW), the premier festival for film, interactive technology, and music in Austin, Texas, may seem an unlikely place to discuss agriculture, but as ag technology continues to grow, there is no better place to engage consumers in conversations about farm-to-fork innovation.
Land O’Lakes, which brought together a panel of agtech experts, introduced the topic, “Does Artificial Intelligence Belong in Agriculture?” to attendees during a three-day immersive experience on our food system.
For panelist Mark Young, chief technology officer and head of product for The Climate Corporation, artificial intelligence is changing ag by providing growers more data – not limited to the scope of their own farm – for better decision-making. He explains AI as “a whole family of technologies” that is the basis for image recognition, complex process models, navigation systems, autonomous vehicles, and other applications growers are already using.
Get to Know the Future!
Steady Rise in California Tree Nut
Predicting tree nut production in the years ahead would be like guessing which teams would be in the Super Bowl in any given year. There are far too many variables to consider, any one of which could change without warning.
But growers, the industry-at-large, and especially potential growers thinking about investing in a tree nut orchard are all interested in production potential to help guide them in long-range planning.
Is Increased Production a Good Thing?
Clean Water Act Violation: $50,000 Fine for Iowa Farm's Manure Runoff
A livestock farm in southeastern Iowa has been fined $50,000 after the owner and an employee plead guilty to charges of violating the Clean Water Act while discharging manure.
In a press release from the Department of Justice, it is outlined that Scott Allen Etcher, age 55, and Benjamin Allen McFarland, age 29, from Etcher Family Farms of New London, Iowa, were sentenced following guilty pleas to Discharge of a Pollutant. The sentencing occurred on Feb. 26, after both Etcher and McFarland had pleaded guilty on Oct. 25, 2018, to criminal violations of the Clean Water Act.
Facing the Consequences
Land Value Based on Soil Type a Sore Spot in South Dakota
While the South Dakota Legislature looks at studying changes to the way the state values ag land for taxes, the current system also is being challenged in the courts.
The issue is the use of soil type to determine the value of the land, whether it be in the middle of a pasture, under a pond or on top of a remote bluff.
Former state legislator Jim Hundstad of Bath in July 2018 filed a lawsuit in Brown County challenging a system that he says requires taxpayers to continually seek “adjustments” to the value when the overall system of determining cropland versus non-cropland should be fair.
Hundstad served in the state House and then was in the Senate when it passed a law in 2008 changing the valuation system.
Should Soil Type Matter?
GE Salmon Cleared for U.S. Dinner Plates
More than three years after the FDA approved, for the first time, a genetically engineered animal as safe to eat, the government opened the door for AquaBounty Technologies to grow and sell its GE salmon in the U.S. A biotech trade group said the fish, which developers say grows twice as fast as as conventional Atlantic salmon on 25% less feed, will “contribute to a more sustainable food supply.”
The FDA said it deactivated on Friday an import alert that blocked import of the salmon. AquaBounty Chief Executive Slyvia Wulf said the action will allow the company “to begin producing and marketing AquAdvantage salmon in the U.S.” The Massachusetts-based company has a “grow out” facility in Indiana. AquaBounty said its GE salmon would reduce U.S. reliance on imported seafood.
Coming to a Plate Near You
How to Grow Hemp in Kansas
Which seed varieties grow well in different parts of Kansas? How much water is needed? Where can farmers access certified seed? When the 2018 Farm Bill opened the door to growing industrial hemp—plants that contain less than 0.3% tetrahydrocannabinol, or THC—it also released the flood gates on questions about how to grow the once-maligned plant. Industrial hemp is often grown for its fiber, seeds and oil, and it contains low levels of THC, the psychoactive that produces a “high.”
The 2019 Farm Journal Cannabis in U.S. Agriculture Study revealed farmers’ interest in growing industrial hemp is high, with 83% saying they think farmers should be involved in growing industrial hemp and 48% reporting they’re personally interested in growing cannabis for seed, fiber, oils or medicinal use.
But with great hemp power comes great hemp responsibility, and Kansas State Research and Extension agents say their call to action is urgent, based on the high volume of questions they’re already fielding, according to a press release.
Can Hemp Grow in Kansas?
China Will Buy More Than Just Soybeans
As trade talks with China march on, all eyes are on the soybean markets. But a trade deal with China could mean increased exports for many other commodities. Rabo AgriFinance put together a “shopping list” of products China will likely begin purchasing if a deal is completed. This week on AgriTalk, Steve Nicholson, grain and oilseed analyst at Rabo, shared some of the products they expect China to buy in addition to soybeans.
“There’s a lot on the [shopping] list,” Nicholson told AgriTalk host Chip Flory, “but there's a lot with a long way to go to get to that.”
What Other Exports Will Increase?