Farmland Values Are Stable Despite Income and Trade Turmoil
Across the Farm Belt, cropland values generally are holding steady in the fifth year of low commodity prices and are bolstering farm finances. Economist David Oppedahl of the Chicago Federal Reserve says stellar yields are a key reason in the Midwest. Near-record corn and soybean yields keep revenue flowing.
Land values in the central Midwest, steady overall during 2018, were expected to remain strong into planting season this year, according to ag bankers surveyed by the Chicago Fed. The value of “good” farmland in the district rose by 1% in the closing months of 2018. The St. Louis Federal Reserve, whose district includes eastern Missouri, southern Illinois, and southern Indiana, says its survey of bankers found a 3.4% increase in value for “quality” farmland in the fourth quarter of 2018. Lenders were less sanguine going into this year, expecting a decline in the first quarter, just like the opening months of 2018.Read More on the Land Values.
Illinois Farmland Values, Lease Rates Holding Steady
Farmland values and rents in Illinois are holding steady across most of the state, according to a report by the Illinois Society of Professional Farm Managers and Rural Appraisers.
While values and cash returns to farmland held steady in the higher quality land classifications, there were modest gains in four of the five classes across the state. While rents remained steady in the better soils, there were reductions in rents on lower quality farmland lacking irrigation.
Extremely high soybean yields and market facilitation payments filled the cash flow gap that otherwise would have occurred in farm profitability and likely helped stabilize farmland values, as well.
Farmland values for excellent quality land in Central Illinois -- including Adams, Brown, Hancock and Pike counties -- ranged from $10,250 to $10,875, down 1 to 2%, while cash rents remained steady at $290 to $350 per acre.Illinois Stays Steady.
Why Land Remains an 'Overlooked' Commodity - Expert Opinion
'Buy land – they’re not making it anymore.’
Mark Twain’s comment remains as true today as when the American author said it more than a century ago.
Land has traditionally proven to be an incredibly good investment, with average values doubling to about £7,500 per acre between 2007 and 2018.
Putting aside Twain’s point about its finite supply, if you look at the fundamentals then demand is only going one way. According to the UN, the world’s population is set to shoot up from 7.6 billion in 2017 to 8.6 billion in 2030 and 11.2 billion in 2100. Where will the food for all those extra hungry mouths come from? Farmland.Read the Expert Opinion
Urban Sprawl in St. Louis Affects Farms in Illinois
Urban development is putting the squeeze on Illinois farms. And not just in Chicagoland.
The Metro East, across the Mississippi River from St. Louis, is growing in three directions, butting up against country that not long ago was rural landscape as far as the eye could see.
Now families that have lived and worked here for generations must deal with new problems that come with new neighbors.
“We farm right up to the Walmart, the YMCA, the college, everything,” said Tom Renner, who grows corn, soybeans and alfalfa in St. Clair County, Illinois. “The town has moved against us.”Urban Development is Squeezing out Farms.
Midwest Floods Hammer U.S. Ethanol Industry, Push Some Gasoline Prices Towards 5-Year High
The March floods that punished the U.S. Midwest have roiled the ethanol industry, hammering prices and trapping barrels in the country's interior while the U.S. coasts suffer from shortages of the biofuel.
The historic March floods have dealt a series of blows to large swaths of an ethanol industry that was already struggling with high inventories and sluggish domestic demand growth. And the ethanol shortages are one factor pushing gasoline prices in Los Angeles and Southern California to the highest in the nation and they could top $4 a gallon for the first time since 2014, according to tracking firm GasBuddy.Where will Gas Prices Go?
Boatloads of Water Problems
Matt Swanson cares deeply about the reliability of the U.S. waterways infrastructure because it affects his bottom line.
“If there’s a shutdown on the river and we’re supposed to be shipping grain and we don’t have our basis set, that comes straight out of our pockets,” says the farmer from La Harpe, Illinois, which is 15 miles from the Mississippi River and less than 70 miles from the Illinois River.
“We grow 99% non-GMO grain for export, both corn and soybeans,” he explains. After harvest, typically in the fall or spring, the grain is shipped downriver on a barge.What is the State of Waterway Infrastructure?
Ag Industry Please With Border Decision
The American ag industry is happy President Trump has changed his tune about a potential border closure.
After threatening to close the southern border if Mexico can’t stop the flow of illegal immigrants to the U.S., President Trump has instead warned that he may impose tariffs of up to 25 percent on vehicles imported from Mexico.
“Mexico understands that we’re going to close the border or I’m going to tariff the cars. I’ll do one or the other, and probably settle for the tariffs,” Trump said, The Associated Press reported.
Mexico represents a massive trading market for the U.S.
The two countries trade about US$1.7 billion of products daily, the U.S. Chamber of Commerce says. From an ag perspective, Mexico imported US$19-billion worth of farm products last year.Will Trump Close the Border?
Autonomous Farming Platform Tested at UofA
An autonomous farming platform made in Canada and tested at the University of Arizona is looking to make its prime-time debut in the United States.
DOT is a robotic farming platform built initially to handle large-acreage farming operations such as corn and canola on the Canadian prairie. The lightweight platform is designed to currently handle a few implements. Company officials are looking to other manufacturers to help increase the variety of implements compatible with the system.What Potential Does this Platform Hold?
Appraisal Standards Board Unanimously Adopts 2020-21 USPAP
The Appraisal Standards Board, an independent board of The Appraisal Foundation, adopted unanimously the 2020-21 edition of the Uniform Standards of Professional Appraisal Practice (USPAP) at its public meeting today in Kansas City, Missouri.
“The 2020-21 USPAP includes changes that afford appraisers greater flexibility in appraisal reporting,” said 2019 Appraisal Standards Board Chair Wayne Miller. “The intent is to ensure that minimum reporting requirements continue to protect public trust in the appraisal profession, while allowing appraisers to practice in a evolving marketplace.”
The Appraisal Foundation will host a webinar with ASB Chair Wayne Miller and The Appraisal Foundation Vice President John Brenan to answer questions about the 2020-21 USPAP. In addition to the webinar, a summary detailing the changes will also be released. The Foundation will announce shortly when the webinar will be held and the summary will be released.
“The core of the appraisal profession is about protecting the public trust,” said The Appraisal Foundation President David Bunton. “Standards should allow appraisers to perform professional valuation services. The 2020-21 USPAP strikes a balance that protects the public trust without placing unnecessary burdens on the appraiser.”
USPAP will now move into production, and will be released in the Fall of 2019. The 2020-21 USPAP becomes effective on January 1, 2020, and remains in effect until December 31, 2021. The Appraisal Foundation encourages appraisers to acquire the 2020-21 edition before it becomes effective to ensure that all appraisal services are compliant during this transition period.
Appraiser Qualification Board Issues Exposure Draft on Proposed Interpretation to the Real Property Appraiser Qualification Criteria
The Appraiser Qualifications Board (AQB) is seeking feedback on a proposed Interpretation to the Real Property Appraiser Qualification Criteria. The Interpretation relates to mandatory Supervisory requirements and disciplinary sanctions.
To download the proposed Interpretation, please click here.
Submit all comments to AQBcomments@appraisalfoundation.org