ASFMRA AgNews - September 29, 2020

By ASFMRA Press posted 29 days ago


Don't Expect Large Downturn in Cash Rent

Price rallies for corn and soybeans in late August and early September improved the picture for 2020 actual crop budgets, and refocused what’s expected in 2021 for a farm with average land and a 50-50 corn-soybean rotation. However, they didn’t change the fundamentals. Net return to land will remain well below average cash rent for both 2020 and 2021.

That’s the conclusion Purdue University Extension agricultural economists Jim Mintert and Michael Langemeier reached after reviewing USDA’s latest report related to corn and soybean stocks, issued Sept. 11. Mintert is director of the Purdue Center for Commercial Agriculture, and Langemeier is associate director and frequent contributor to the Journal of the ASFMRA.

“Increasing prices means bottom line numbers in crop budgets look better than they did in August when we ran budgets,” Langemeier says. “However, the numbers in August 2020 were extremely bleak. So, while we saw improvement, we still expect tight margins to continue.

“Look for some downward pressure on cash rents for 2021. However, average cash rent per acre may not fall as much for 2021 as some people might expect.”

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Ag Giant Cargill Moves Toward Regenerative Agriculture

Cargill is supporting farmer-led efforts to adopt practices and systems foundational to regenerative agriculture practices across 10 million acres of North American farmland over the next 10 years.

The initiative will focus on row crop rotations that include corn, wheat, canola, soybeans, and other staple crops. Cargill expects the regenerative agriculture practices to benefit from long-term profitability and resiliency of farmers while advancing the company’s progress in reducing greenhouse gas emissions in its global supply chain by 30% per ton of product by 2030.

It will also contribute to the company’s efforts to protect and enhance water solutions.

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Tillamook Creamery Donates 10% of September Sales to Farmers

Tillamook County Creamery Association (Tillamook), the 111-year-old farmer-owned dairy co-op recognized the hardships that farmers all over the country, including Oregon, are facing, which have only been magnified further by the impact of COVID-19. Tillamook has joined forces with American Farmland Trust (AFT), a farmer-focused not-for-profit, to commit 10 percent of TCCA’s September grocery product sales to give back to farmers. The anticipated donation will be up to $1.6 million.

Tillamook CEO Patrick Criteser said the company is aware of the general challenges farmers are facing today, as well as how COVID-19 has impacted farmers across the country. They have also been tracking the alarming loss of farmland. Tillamook wanted to raise awareness and try to provide some financial support for the farmers.

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When This North Dakota Farmer Fell Ill, His Neighbors Showed up to Help With Harvest

Lane Unhjem was driving his combine harvester across a field of durum wheat on his North Dakota farm earlier in the month, when suddenly smoke began billowing from the machine. Before Unhjem could figure out what was going on, flames started leaping around him.

Unhjem’s neighbors saw the fire and raced over, helping him extinguish the blaze and saving the field from ruin. But the shock of the moment, coupled with the thick plumes of smoke Unhjem inhaled, triggered the 57-year-old farmer to go into cardiac arrest.

“He flatlined three times in the emergency room,” his daughter Tabitha Unhjem, 31, said.

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Swarms of Post-Hurricane Mosquitos Are Killing Cattle in Louisiana

Hurricane Laura, which reached Louisiana on August 26th, has been one of the most destructive storms in recent years.

One lesser-known effect of the hurricane has been the deaths of hundreds of head of cattle, horses, and other livestock—but not due to the wrath of the storm itself. Instead, those animals have been harmed by a result of the hurricane: massive swarms of mosquitoes.

Hurricane Laura killed dozens in the United States and caused billions of dollars worth of destruction, including an estimated $1.6 billion in damages to Louisiana crops. The mosquito boom that followed the hurricane has been deadly for livestock in Louisiana, as the sheer number of insect bites have caused anemia in cattle. Some animals have died from exhaustion, as they’ve had to constantly move to try to evade the clouds of mosquitoes.

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Bristol Motor Speedway Seeks Reduction in Property Appraisal

Bristol Motor Speedway’s owners are asking the state to order Sullivan County to drop the value of the “World’s Fastest Half Mile,” for property tax calculations, by about $46 million.

The Sullivan County Property Assessor’s office apparently worked with BMS legal representatives last year to lower the appraisal on at least some parcels owned by Bristol Motor Speedway LLC, according to tax records and a portion of a brief written response provided to the Times News by BMS Vice President of Communications Becky Cox on the business’ behalf.

Julie Bennett, vice president and general counsel at BMS, confirmed to the Times News on Friday that the business had filed a complaint with the Sullivan County Board of Equalization earlier this year in an attempt to have the assessor’s appraisal lowered.

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Texas Ranch With Dance Floor Built for Patrick Swayze up for Auction

Hill Country ranch whose highlights include a dance floor designed for the late actor Patrick Swayze is up for auction with a price tag of $4.75 million.

Twisted Rose Farm, once an Arabian horse farm, sits on 235 acres near Kerrville. With a 2,900-square-foot main house, a guest cottage, and other living quarters, the farm offers 11 bedrooms and seven bathrooms. A private lake encompasses more than 13 acres.

The main barn contains a grand ballroom with a catering kitchen, a wet bar, and a dance floor customized for Dirty Dancing and Ghost star Swayze, a horse lover and Houston native who was a frequent visitor. A terraced outdoor entertaining space includes spots for barbecuing and dining, and for soaking in the hot tub. A fireside lounge affords views of Hill Country sunsets.

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A Strong Year for Suburban and Rural Real Estate

Lisa Lundberg received her first out-of-state call about the local real-estate market on March 20. Within days, that one call became hundreds as agents in her Berkshire-Hathaway office on State Street fielded queries from around the country. “From New Jersey to Kansas, to Connecticut, to D.C. and Georgia, people living in cities wanted out and were looking for wide open spaces,” she said. “I work with a group of agents who have been in the business 20 years. They’ve never seen a market like this.”

The calls haven’t stopped. Homes in Bristol are selling as fast as they are listed—sometimes within hours of appearing online—usually with multiple offers and typically well over the asking price. Pressed against Tennessee’s northern border with Virginia, Bristol calls itself “the birthplace of country music.” It’s known for Nascar races at the Bristol Motor Speedway, its beautiful lakes, and the nearby Cherokee National Forest.

“We’ve never really been known as a place to relocate from a big city. We are not a big metropolis, but here we are,” Ms. Lundberg said, shrugging at the unexpected popularity.

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California Farm Bureau Fears Improvements Like Barns, and Even Trees, Will Be Taxed Under Prop. 15

The most contentious issue California voters face on Nov. 3 is not the Presidential election—polls show voters are firmly decided. Rather, it is a tax measure, Proposition 15, which has heavy hitters for it and against it.

Proposition 15 would amend the California constitution to change the way commercial and industrial real estate is taxed, basing it on current market value. Presently, all property, residential and commercial, is taxed based on its last purchase price.

The measure, sometimes called the "split-roll initiative," excludes commercial agricultural land and commercial properties worth less than $3 million from being reassessed at current market value. The non-partisan Legislative Analyst's office estimates that Proposition 15 could bring between $6.5 billion to $11.5 billion per year when it is fully implemented in 2025.

The California Farm Bureau Federation is a vocal opponent. It argues that the way Proposition 15 is written, it exempts agricultural land from the new tax system but not fixtures and improvements, which might include olive trees or barns. The measure, it argues, could be confusing for tax assessors and perhaps a deal-breaker for family farmers.

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ASFMRA Government Relations Update

House Passes Continuing Resolution, Replenishes CCC

Last week the House passed a Continuing Resolution (CR) to fund the government through December 11th by a vote of 359 to 57. The Senate is expected to vote and pass the CR this week to avoid a government shutdown when the Federal fiscal year starts on October 1.

The drafting of the CR was not without some drama as the initial draft did not include authority to replenish the Commodity Credit Corporation (CCC) borrowing authority. Without replenishing the funding, the FSA may not have had sufficient resources to make ARC, PLC and other farm program payments scheduled for early October. Republican Agriculture leaders objected to the missing CCC replenishment. The Senate was expected to amend the House CR to include the CCC funding, setting up the need for a conference committee thus significantly raising the prospect of a government shutdown. Democrats relented and added the CCC funding as well around $8 billion in additional nutrition funding.

USDA Announces CFAP 2

USDA announced up to an additional $14 billion dollars for agricultural producers who continue to face market disruptions and associated costs because of COVID-19. Signup for the Coronavirus Food Assistance Program (CFAP 2) will begin September 21st and run through December 11, 2020.

The CFAP 1 payment limits apply to CFAP 2; $250,000 per person or entity with additional payment limits when members actively provide personal labor or personal management for the farming operation within corporations, limited liability companies, limited partnerships. The CFAP 1 adjusted gross income (AGI) test applies to CFAP 2 as well, 3-year average of $900,000 or less unless 75% of the AGI is generated from farming, ranching or forestry related activities. Conservation compliance, sod and swamp buster, apply as well.

CFAP 2 payments will be made for three categories of commodities – Price Trigger Commodities, Flat-rate Crops and Sales Commodities.

Price Trigger Commodities

Price trigger commodities are major commodities that meet a minimum 5-percent price decline over a specified period of time. Eligible price trigger crops include barley, corn, sorghum, soybeans, sunflowers, upland cotton, and all classes of wheat. Payments will be based on 2020 planted acres of the crop, excluding prevented planting and experimental acres. Payments for price trigger crops will be the greater of: 1) the eligible acres multiplied by a payment rate of $15 per acre; or 2) the eligible acres multiplied by a nationwide crop marketing percentage, multiplied by a crop-specific payment rate, and then by the producer’s weighted 2020 Actual Production History (APH) approved yield. If the APH is not available, 85 percent of the 2019 Agriculture Risk Coverage-County Option (ARC-CO) benchmark yield for that crop will be used.

For broilers and eggs, payments will be based on 75 percent of the producers’ 2019 production. Contract growers are ineligible for CFAP 2 and will not receive a CFAP 2 payment. If the grower retains price risk in the production of the commodity, they are eligible for CFAP 2.

Dairy (cow and goat milk) payments will be based on actual milk production from April 1 to Aug. 31, 2020. The milk production for Sept. 1, 2020, to Dec. 31, 2020, will be estimated by FSA.

Eligible beef cattle, hogs and pigs, and lambs and sheep payments will be based on the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer, between Apr. 16, 2020, and Aug. 31, 2020.

Flat-rate Crops

Crops that either do not meet the 5-percent price decline trigger or do not have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre. These crops include alfalfa, extra-long staple (ELS) cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed, and several others.

Sales Commodities

Sales commodities include specialty crops; aquaculture; nursery crops and floriculture; other commodities not included in the price trigger and flat-rate categories, including tobacco; mink (including pelts); mohair; wool; and other livestock (excluding breeding stock) not included under the price trigger category that were grown for food, fiber, fur, or feathers. Payment calculations will use a sales-based approach, where producers are paid based on five payment gradations associated with their 2019 sales.

You can find the final rule here and the cost benefit analysis here.

House Agriculture Committee Chairman Petersen (D-MN) issued the following statement regarding CFAP 2 payments.

“There are some good things in this second CFAP plan, and the Secretary should be commended for simplifying the application process for specialty crop growers and making sure livestock producers, like the turkey growers in my district, have what they need. It also expands the program to all classes of wheat and makes sure most commodities left out in the first round receive some support,” Peterson said. “And while this version of CFAP takes those good steps, there is some frustration over the participation rate among some sectors, including specialty crop producers.”

“I still want to see help for the ethanol industry that has been hurt by the drop in fuel demand, textile mills that are helping create COVID medical supplies, pork and poultry producers that had to depopulate as a result of plant closures, and contract growers who have faced loss of income.”

Deputy Secretary Censky to Return to Soybean Association

U.S. Secretary of Agriculture Sonny Perdue announced that USDA Deputy Secretary Stephen Censky will be departing November 8, 2020. He will be returning to become the CEO of the American Soybean Association (ASA), a position in which he previously served for 21 years. He will begin that role on November 9, 2020. No successor has been announced, but it is widely expected that Undersecretary Northey will take on the acting roll of Deputy Secretary once Censky departs.

RMA Announces Changes to WFRP

The RMA announced modifications to the Whole-Farm Revenue Protection (WFRP) program to decrease paperwork and recordkeeping burdens for direct marketers beginning with the 2021 crop year.

RMA held several stakeholder meetings with agents, growers and grower groups to solicit feedback on ways to increase the effectiveness of the WFRP program, as required by the Agricultural Improvement Act of 2018 (Farm Bill). Stakeholders recommended RMA decrease the requirements for reporting yield and revenues for each commodity, which is especially difficult for direct marketers who may sell several commodities through a roadside stand.

The newly implemented modifications allow growers to report two or more direct-marketed commodities as a combined single commodity code with a combined expected revenue for all commodities. Additionally, the combined direct-marketed commodities will count as two commodities in calculating the diversification premium discount. Under WFRP, farms with two or more commodities receive a premium rate discount, reflecting the lower risk of revenue loss due to the farm’s diversification. Revenue history will be based on reported revenue from the combined direct-marketed commodities and total acres planted to those commodities. This lessens reporting burdens by alleviating the requirement to report detailed sales or yield records from any specific commodity reported under the direct market commodity code.

Enhanced Coverage Option

The Federal Crop Insurance Corporation Board of Directors approved the implementation of Enhanced Coverage Option (ECO). The ECO will be available for the 2021 crop year for select crops with a contract change date of November 30, 2020 or later. The ECO provides area-based coverage for a portion of the deductible of your underlying policy in a manner similar to the Supplemental Coverage Option (SCO). It uses the same expected and final area yields, projected and harvest prices and payment factors as SCO but covers a band from 86 percent (where SCO coverage ends) up to 90 or 95 percent of expected crop value. Like SCO, ECO is based on your underlying policy plan of insurance. You can find more information on ECO here. RMA will release the policy materials over the next few weeks.

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
Madison Anderson with Farm Credit Services of America in Casper, Wyo. (Wyoming Chapter)
Marcus Braman with Braman Services, PLC in Dimondale, Mich. (Michigan Chapter)
Kevin Brooks with Busey Ag Services in Champaign, Ill. (Illinois Chapter)
Jacob Quaid with Busey Ag Services in Le Roy, Ill. (Illinois Chapter)
Brandon Yaklich with Hertz Farm Management, Inc. in Kewanee, Ill. (Illinois Chapter)

Also, congratulations to Phillipe Poppe, who recently earned his Accredited Farm Manager certification! Mr. Poppe is currently based out of Mahomet, Illinois, and works for Farmers National Company.

Jon Mask, from Boerne, Texas, also deserves recognition for earning his Real Property Review Appraiser designation. Congratulations, Jon!


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!

Chad Kies, AFM
Steve Myers, AFM

Thank you to all who have referred someone and in some cases, more than one, to join ASFMRA.

In Memory: Glenn D. Oertley, Peoria, Illinois

The ASFMRA was honored and pleased to welcome Glenn into the membership in 1948. During his time as an ASFMRA member, Glenn obtained both the Accredited Farm Manager (AFM) and Accredited Rural Appraiser (ARA) designations. He had transferred to the Retired membership classification. Glenn was active in the Illinois Chapter and served as the Illinois Chapter President in 1961. He was also named to the ISPFMRA Hall of Fame in 1987. Glenn just turned 100 years old on March 28, 2020 and was residing in a retirement facility in Chillicothe on his passing on September 12, 2020. He made many friends through his association with the ASFMRA who will miss him greatly. Our thoughts and prayers are with his family. You can view more on Glenn’s life by clicking here.