6 Drivers Keeping the Farmland Market Steady
Doug Hensley, president of real estate services with Hertz farm management, recently talked with Chip Flory on AgriTalk and gave an overall update on the farmland market. Hensley gives six drivers keeping the farmland market firm despite so much uncertainty in ag.
Annual numbers are a better barometer than quarterly surveys.
“I really look at the annual numbers maybe a little more closely,” Hensely says. “With the quarterly numbers, it’s a survey of people’s attitudes one sale to the next which can really influence things.”
He continues to say that looking from April 2018 to April 2019, the farmland market is overall flat. Although it’s higher for good farmland. Read the Rest of the Driving Factors.
Trends Report: California Ag Land Values Largely Stable in ‘18
With at least one predictable exception, agricultural land values in California remained stable from 2017 to 2018, though the larger trend was generally one of decline as buyers were pickier than in years past.
Rural Appraiser Janie Gatzman, co-chair of the much-anticipated Trends in Agricultural Land and Lease Values report, says the annual accounting of real estate values from the California Chapter of the American Society of Farm Manager and Rural Appraisers (ASFMRA) contains few, if any surprises.
“I didn’t feel the doom-and-gloom that I felt in years past with this report,” she said.
While farm prices in key crops like almonds were flat from 2017 to 2018 in parts of the state, the trend in tree nuts over the past several years is down, in some cases significantly, with a few exceptions.Groundwater Issues Starting to Affect Values.
Resolving U.S. China Trade Disputes
Will there be a U.S. and Chinese trade deal? Yes, but it will not be The Deal, which is to say there will not be a near term comprehensive multiyear agreement between the U.S. and China. This will be bearish for the commodity sector in general, but especially problematic for the U.S. grain markets.
Resolving U.S. and Chinese trade disputes will be a multiyear process, or, said differently, an ongoing fiscal, monetary, and trade negotiation policy process. Why? China has defined objectives and sees no reason to deviate from those objectives, which are global economic, technological, financial, and military supremacy. China sees no reason why they should not replace the United States as the world’s super power economically, technologically, financially, and militarily.What is in Store for US/China Trade Negotiations?
Cash Rental Rates Stay Mostly Steady in 2019
Cash rental rates for farmland are a popular topic in farm country. As farm incomes climbed earlier this decade, cash rents predictably followed suit. Now that farm incomes have dropped going into a sixth-straight year, cash rental rates have declined. However, the decline isn’t as steep as many in the industry thought it would be because of lower incomes. For the 2019 crop season, the Farmers National Company saw cash rental rates make a minor move lower, but overall the rates stayed mostly steady compared to the previous year. Farmer interest in renting land remained strong enough in most areas to continue to support those steady cash rent prices.Where Will Rental Rates Go This Year?
Industry Reacts to Late Grape Crush Report
Because of the interruption caused by a federal government shutdown, there was no preliminary Grape Crush Report for 2018. Instead, the California Department of Food and Agriculture and the U.S. Department of Agriculture’s National Agricultural Statistics Service who fund the report, issued it in a final form to act as a barometer for the grape and wine industry - with tonnage and prices of wine grapes crushed during the ’18 harvest.
According to Steve Fredricks, President of Turrentine Brokerage, California’s largest wine grape and bulk wine brokerage company, “The report provides growers and wineries insight into the inventory position for the state’s wine business as a whole, and influences market dynamics for the upcoming 2019 harvest.Read the Full Report.
As Grape Acreage Expands, Industry Talks Politics
The 2018 California Grape Acreage Report is a matter of record now, showing an improvement over 2017. Acreage expanded by 5 percent to 925,000 acres, 863,000 of which were bearing with an estimated 737,000 of those acres being wine-type grapes. Table-type grape acreage increased by 9 percent to 132,000 acres with raisin-type grapes falling off 2.5 percent to 156,000 acres.
But those numbers, based on questionnaires to 8,300 grape growers, may not reflect a complete picture of the situation and here’s why.Find Out Why in the Full Report.
Reviewing the State of the Farm Economy
The House Agriculture General Farm and Risk Management Subcommittee held an oversight hearing on May 8, 2019 regarding the general state of the farm economy. Congressman Vela (D-TX) chaired the hearing. Four farmers from different parts of the country testified: Matt Huie (TX), Owner of Huie Farms; Mike Peterson (MN), Owner and Operator of Twin Oak Farms; Dan Sutton (CA), General Manager of Pismo Oceano Vegetable Exchange; and Bart Davis (GA), Owner and Operator of Davis Farms. You can read their written testimony here
and watch a replay of the hearing here
. Congressman Thompson (R-PA) specifically asked how crop insurance was working for the four farmers around the 53.10 mark.
All four witnesses talked about the poor state of the agricultural economy, highlighting low prices, increased input costs, and tightening credit markets. There was also a general discussion about the efficacy of the Wildfire, Hurricane Indemnity Payment (WHIP) program, and its interaction with crop insurance. Mr. Huie and Mr. Davis both related how the WHIP did not indemnify them for hurricane losses. Both urged Congress to make additional ad hoc disaster payments available. Mr. Huie also discussed problems with the Market Facilitation Program (MFP) as it paid on harvested production. Farmers with production losses received reduced or no MFP payments.
House Passes Another Disaster Version of Disaster Assistance
The House passed HR 2157
on May10, an updated disaster aid package providing $19.1 billion to areas that have been hit by hurricanes, wildfires, and flooding in the 2018 or in the 2019 crop year. The vote
was 257 to 150, with 223 Democrats and 34 Republicans voting for the bill. A total of 150 Republicans voted against it, largely over aid to Puerto Rico issues, and 13 Republicans and 11 Democrats did not vote. President Trump has said he would veto this disaster bill due to the level of assistance it provides to Puerto Rico.
The House passed a previous ad hoc disaster bill in January 2019. On the agricultural front, this version adds 2019 losses as eligible payments; maintains roughly $3 billion in ad hoc crop loss payments and adds additional funding to emergency conservation programs to help recover from 2019 flooding. Appropriators in the Senate are still working to find a bipartisan compromise on that chamber’s version of a supplemental and hope to complete it this week before the Memorial Day recess.
USDA Preparing for more Trade Aid
Momentum for another round of trade aid for farmers began after a tweet from President Trump promising to stand by farmers with $15-$20 billion in aid in the wake of stalled trade negotiations with China. USDA Secretary Sonny Perdue is said to be preparing a package for additional assistance for farmers. Most likely the bulk of the assistance will come in the form of the MFP (Market Facilitation Program) that USDA rolled out late last year and some direct commodity purchases. An announcement on the amount and form of the assistance could come as early as this week. Secretary Perdue told reporters that USDA will look at the history of what happened with that program (MFP) and USDA will try to learn from it, and improve from it, and address some of the stakeholder comments. Corn growers in particular are pushing for greater payment rates than the 1 cent a bushel payment provided in the last round.
Conservation Reserve Program Controversy
During a subcommittee oversight hearing last week in the House Agriculture Committee, Richard Fordyce, Farm Service Agency (FSA) Administrator, announced FSA will open sign-up for the continuous Conservation Reserve Program (CRP) starting June 4. House Agriculture Committee Chairman Peterson strongly questioned how FSA had authority to start sign-ups for continuous CRP but not for general CRP. At one point in his questioning he stated he will work to stop USDA, even if he has to sue the Department. Chairman Peterson is a strong proponent of the general CRP largely because of its importance to wildlife.
Natural Resource Conservation Service (NRCS) Chief Lohr also announced that NRCS plans to have regulations implementing the 2018 Farm Bill changes for all NRCS administered conservation programs by the first quarter of FY 2020. Currently, the Environmental Quality Incentives Program (EQIP), the Conservation Stewardship Program (CSP) and Agricultural Conservation Easement Program (ACEP) are operating largely under 2014 farm bill authorities. You can watch a replay of the hearing here
and read the written testimony here.
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 Members:Kassie Camino
in Buffalo, WY (Wyoming Chapter)Hans Carmien
with Busey Ag Services in Decatur, IL (Illinois Chapter)Charles Hardesty
with Farm Credit Mid-America in Owensboro, KY (Kentucky Chapter)Blake Hartman
in Ottawa, IL (Illinois Chapter)William McIntosh
with MAC Valuation Group in Little Rock, AR (Mid-South Chapter)Jose Ochoa
with Farmland Management Services in Clovis, CA (California Chapter)Jennifer Plate
with Farm Credit Services of America in Ottumwa, IA (Iowa Chapter)Chad Rushing
with U.S. Trust in St. Louis, MO (Illinois and Missouri Chapters)Ryan Stanger
in Murray, KY (Kentucky Chapter)Ruby Stroschein
with LandValue Solutions in Moscow, ID (Washington Chapter)Brett Welch
with AXA Equitable Agrifinance in Jonesboro, AR (Mid-South Chapter)Andrew Wendlandt
with Compeer Financial in Waite Park, MN (Minnesota Chapter)Cody Wernimont
in Spirit Lake, IA (Iowa Chapter)Michael Wilken
in Oxford, NE (Nebraska Chapter)Katie Woods
with Frontier Farm Credit in Manhattan, KS (Kansas 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!Ben Bolinger, ARAClayton Caver, AFM, ARA, RPRAThomas CoursonCarl Evers, III, AFMKim French, ARA, RPRARobert Frizel, AFMTheo HirshfeldJohn MassanetRyan McKnightAdam Schmidt, ARARay ShinnDeb Stanbro
Thank you to all who have referred someone and in some cases, more than one, to join ASFMRA.
Make Your 2019 Education Foundation Auction Donation Now
It’s time to think about what you and your Chapter will be donating to the 2019 Education Foundation Auction that will be held on November 21, 2019 in Louisville, KY at the Omni Louisville Hotel. Remember, no item is too small or too large. Unique items from your area are always wanted. Here are some of the items that we have received as of this time –
The Indiana Chapter
has donated 2020 Indianapolis 500 Mile Race Tickets. This is two (2) tickets for the 2020 Indianapolis 500 Mile Race weekend which includes two race day tickets located in the paddock grandstand, two tickets for admission to Miller Lite Carb Day, two tickets for Legends Day, two tickets for admission to the garage area immediately following completion of the race, and a three day auto parking permit. You do not want to miss your opportunity to bid on this amazing racing package.Paul E. Moore, ARA, RPRA
has donated a stay at his and Beth’s Vacation Home situated on the banks of beautiful Lake Cumberland. This is for an amazing vacation for a maximum of six days and five nights to Paul and Beth Moore’s vacation home which has three levels with a balcony on each level! There are four bedrooms, three full baths, full kitchen, living room, recreation room with pool table, outdoor hot tub, and much more. What more could you ask for when you take a vacation? You do not want to pass this opportunity up for bidding on this great trip!
The Missouri Chapter
has donated a Stetson 30X Hat. Crafted in the original Gateway to the West from the Stetson factory in St. Joseph, MO. This 30X felt hat will set you off in style! You get to pick your size and color. Make sure you get your bid it on this early as you do not want to miss out on showing off what great taste you have!Richard and Conni Edmunds
have donated a Niagara Falls Trip! This is truly a must vacation trip that you really need to take at least once. You will not be disappointed. This is a weekend trip to tour local area, Niagara Falls, attractions, Amish stores, and so much more! Make sure to bid and bid often on this amazing trip!
Be part of this fun event and mark your calendar now – November 21, 2019 in Louisville, Kentucky. Plans are moving forward and we need you to make the Auction a success again this year! We need your donations. The Education Foundation Auction’s success depends on you – ASFMRA members, Chapters, sponsors, exhibitors, and nonmember supporters.
Make your commitment for Auction items by October 22, 2019. Auction items should be shipped directly to the Omni Louisville Hotel to arrive no later than Tuesday, November 19, 2019. Please do not send your Auction items to arrive at the hotel more than three (3) days in advance – not to arrive before November 18, 2019 – due to the cost the hotel charges for storage.
If you have any questions concerning donations, contact Hope Evans directly at: 303.692.1216 or email@example.com
. THANK YOU for your generous donations and continued support.
Make Your Donation Today to Support the Education Foundation
You, the members, Chapters, companies, and sponsors support the Education Foundation of ASFMRA which makes the development of new education, rewrites of course material to stay on the cutting edge, support the Leadership Institute, and much more possible.NEW
seminars, due to your generous donations to the Education Foundation, will be offered at Education Week in Omaha, Nebraska July 17-24, 2019. A few of these NEW
seminars, thanks to your donations, Practical Rural Appraisal: Work Problems Using the New Methodology; Alternative Management Strategies for Enhancing ROI; Farmland Drainage Tile: Valuation and Usage; Introduction to Cannabis Operation and Valuation.
You can make your tax-deductible contribution to the Education Foundation by one or a combination of the following:
- Make a donation to the 2019 Education Foundation Auction – simply complete the Auction Donation Form and return it to Hope Evans (firstname.lastname@example.org).
- Include a donation along with your dues invoice in any amount that you would like.
- Make a Pledge of a one-time gift, monthly gift, annual gift, semi-annual gift, or consider an Endowment.
- Encourage your Chapters to make a donation.
- Make a donation in Memory of or in Honor of a deceased fellow member.
- Make a donation at any time throughout the year.
These types of donations can be a great way to show your support of the Education Foundation that has been beneficial to so many. Any expression of support is greatly appreciated, and as you know, your contribution is tax-deductible. Thank you!