Analysis-'It's a Madhouse': Organic U.S. Soy Prices Hit Record, Fuel Food Inflation
U.S. prices for organic soybeans used to feed livestock and manufacture soy milk have surged to record highs as imports that make up most of the country’s supply have declined, triggering price increases for food including organically raised chicken.
The costly soybeans and higher-priced organic products are fueling food inflation at a time consumers are eager to eat better and focus on health during the COVID-19 pandemic. The $56 billion U.S. organic food sector is also grappling with a shortage of shipping containers and a tight labor market as global food prices hit a 10-year high.
Food companies and chicken producers are experiencing bigger sticker shock from prices for organic soybeans, which are shipped in containers, than for the conventional crops shipped in bulk. Regular soy prices are around a seven-year high, rather than an all-time record.Read the Full Story
Farm Landowners See Promise in Young Farmers
For many buyers, investing in farmland is a good way to generate income from leasing it out. Leasing land is important for landlords and tenants, but there are risks when it comes to leasing, says a Kansas State University graduate student who is conducting research on the topic.
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Agricultural economics student Chelsea Arnold says 3,600 Kansas landowners recently completed a survey to look at their leases, risk preferences and attitudes toward young producers.
The average Kansas landowner is “around 68½ years old. About 74% of the respondents were male, [and are] kind of split between absentee and those that live within 25 miles of the land they lease,” Arnold says.
Illinois Hemp Production: Up in Smoke?
In 2018, Rolling Meadows Farm Brewery, a microbrewery in central Illinois, wanted to explore growing hemp flowers for CBD oil production as a fit for their brewery customer base. They asked their farm manager, Kent Kraft, AFM, of Farmland Solutions to make it happen.
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Kraft saw it as an opportunity to learn about a new crop — and he found it intriguing. It was an interesting alternative to monoculture corn and soybean production, which has historically tight margins. It also promised opportunity for smaller producers looking to diversify their production. Kraft jumped in and learned as much as he could, attending as many hemp forums and classes as he could find, and even attending Hemp College in Lexington, Ky.
He found there were a number of challenges to get into a brand-new crop like the industrial hemp business, and scarcity was the underlying theme. Think scarcity of knowledge, experience, seed, processors and market contracts.
Farmer Sentiment Declines in September, Inflation Expectations Jump
Sentiment among agricultural producers weakened in September as the Ag Economy Barometer declined 14 points to a reading of 124. This is the weakest farmer sentiment reading since July 2020 when the index stood at 118. Producers were less optimistic about both current and future conditions on their farms and the agricultural sector than they were a month earlier. The Index of Current Conditions declined 12 points to 140 this month, while the Index of Future Expectations fell 16 points to 116. This month’s Future Expectations Index reading was its lowest since May of 2020 when the nation was still in the throes of the pandemic’s first stage.
Despite weaker readings for both the Current Conditions and Future Expectations Indices, farmers remain bullish about farmland values. Both the short- and long-term Farmland Values Expectations Indices rose this month. The Long-Term Farmland Value Expectations Index hit a record high reading of 159, 4 points higher than a month earlier, while the short-term index rose 9 points to 155, which is the third-highest reading since data collection began in 2015. Approximately half of the corn-soybean growers in our survey continue to say they expect farmland cash rental rates to rise in 2022 vs. 2021. Three out of ten respondents expect rates to rise by 10% or more, while 44% of respondents expect the rental rate increase to range from 5 to 10%.Read the Full Story
How Foreign Investors in Farmland Are Changing Life in the West
On a wide river bend, just outside of Jensen, Utah, bright fields of green alfalfa break up the buff of the rolling Colorado Plateau.
The 3,297-acre Escalante Ranch sits just downstream of Dinosaur National Monument on the Green River — the biggest tributary of the Colorado River, which brings water to 40 million people. Keep moving downriver past the hamlet of Jensen and you’ll run through checkerboarded Bureau of Land Management land, where private companies are drilling for oil and gas. Eventually, you’ll hit the Uintah and Ouray Reservation, where members of different bands of Utes were pushed in the 1800s. As of the 2000 census, the population of the reservation was 19,182 people.
This all was once vast swaths of Ute territory. The Escalante Ranch, which has been in operation for more than a century, has prime water rights, and in 2011, Chinese investors bought it for about $10 million. Now the owner offers guided hunting trips, which ranch manager Frank Biggs says is a part of how he manages the wildlife and ecosystem. They also grow alfalfa, some of which is exported back to the growing Chinese dairy industry.Read the Full Story
Kanye West Puts Wyoming Ranch up for Sale for $11 Million
Kanye West’s ranch is now for sale, symbolizing the likely final page in the hip-hop and fashion mogul’s saga in Cody.
On Monday morning, DBW Realty listed his West Ranch, formerly known as Monster Lake, for $11 million. The total property with additional leased federal land was listed for auction for $13.3 million in 2019 before West purchased it, but it is unknown how much he actually paid for it.
West is selling all 3,885 acres of the land he owns south of Cody and the buildings and other features on it, including a lodge, equipment sheds, equine facility, corrals, and a go-kart track. The professional-style go-kart track did not exist prior to his purchase, and a few Star Wars-themed huts also still exist.Read the Full Story
ASFMRA Government Relations Update
Debt Limit Crisis Postponed
Last week the Senate cleared an increase in the federal debt limit of $480 billion on a party-line vote. Minority Leader Mitch McConnell (R-KY) had earlier, along with 10 Republican Senators voted to end debate (cloture) to allow the Senate Democrats to clear the debt limit increase.
The House is expected to vote on the increase tomorrow. Without the increase, the Secretary of the Treasury had stated that the Federal government would reach its statutory debt limit by October 18th forcing the government to default on its legal obligations, including Social Security payments, Medicare benefits, military salaries, interest on the national debt, and other federal payments. The $480 billion increase to $28.9 trillion is expected to give the government breathing room until December 3rd. Recall the continuing resolution passed to keep the government from shutting down runs through December 3rd as well.Senate Confirms Torres Small as USDA Undersecretary for Rural Development
The Senate confirmed former Rep. Xochitl Torres Small (D-NM) as Agriculture Undersecretary for Rural Development late last week. The vote was by voice. Two other undersecretary nominees have been approved by the Senate Agriculture Committee but not acted on by the full Senate, including Mr. Robert Bonnie as Undersecretary for Farm Production and Conservation and Mr. Homer Wilkes as Undersecretary for Natural Resources and Environment.Rod Snyder Named EPA Ag Adviser
Rod Snyder, former President of "Field to Market: The Alliance for Sustainable Agriculture", has been named the Environmental Protection Agency’s agriculture adviser. Prior to his time at Field to Market, Snyder worked for the National Corn Growers Association and CropLife America. Snyder holds a B.A. in Political Science from Eastern University in St. Davids, Pennsylvania. USDA Announces Climate Adaptation Plan
USDA released its climate adaptation and resilience plan describing how USDA will prepare for current and future impacts of climate change. Note that crop insurance is listed as a vulnerability as well as an adaptation action item. The vulnerability is described as “landowner decisions regarding land use, crop mix, and production practices, changing agricultural risks (due to climate change) could affect the performance of the Federal Crop Insurance Program (FCIP), managed by the Risk Management Agency (RMA)”.
Action items listed in the report include:
- Evaluation and monitoring of climate risks to the FCIP and update of program parameters, like earliest and final planting dates and sales closing dates, based on these analyses.
- Implementation of state-funded incentives to encourage cover crop planting.
- Use of the Whole Farm Revenue Protection product to support farmers who use crop diversification to reduce risk.
- Continued insurance coverage for crops that accommodate new agronomic practices that minimize water use.
- Implementation of procedures that facilitate access to insurance coverage to accommodate climate-driven shifts in production areas.
- Application of recently revised premium rating methodology so that rates more quickly reflect changes in risk; and
- Monitoring of premium rating methodology, loss adjustment standards, underwriting standards, and other insurance program materials to ensure they are appropriate for new production regions or practice changes within regions.