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ASFMRA Ag News - January 18, 2022

By ASFMRA Press posted 01-18-2022 09:58 AM

  

2021 Land Report: Who Owns the Most Land in the United States?


America’s leading landowners added hundreds of thousands of acres to their holdings last year. That’s one of the many takeaways from the 2021 Land Report 100, which is compiled each year by Land Report magazine. Now in its 15th edition, this landmark study tracks the diverse array of farmers, ranchers, forest owners, entrepreneurs, and investors who own at a minimum 243.75 square miles. As time has proven, this ownership figure is a moving target — and it keeps moving up.

In the study’s first year, 2007, the founder of Burt’s Bees, Roxanne Quimby, qualified for the No. 100 slot with 75,000 acres of Maine timberland. In 2021, the rock-bottom figure to join this club was more than double that amount: 156,000 acres. And there are some specific criteria that must be followed, too. Only domestic holdings can be counted, and ownership must be deeded, not leased. Otherwise, No. 100 on the list — Nevada’s Ellison Family — would be in the top 10. That’s because the Ellisons’ cattle kingdom in Elko and Lander Counties consists of more than 2 million acres of leased federal lands. But because they hold title to 156,000 acres, that is how they ranked.

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Land Donated by a Bachelor Farmer Creates Windfall for Willmar Church


Calvary Lutheran in Willmar was gobsmacked when the land bequeathed the church by a bachelor farmer led to a $4.5 million windfall.

The eye-popping sum from auctioning off about 400 acres of farmland felt like a gift from above.

"It's transformative," longtime Calvary pastor Dean Johnson said a few days after the late-December auction. "It's put a little spirit in our step."

Be it a miracle or market forces at work, the sale reflects farmland values that continue rising near or above historic levels. With crop prices high and interest rates low, agricultural land is proving an irresistible draw for buyers who see it as a safe investment in a period of inflation.

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Little Movement Happening in Carbon


About a year ago, we talked carbon credit payments in this column, asking whether payments for carbon credits should go to the farmers who implement the practices or to the landowners who hold the ground that stores the carbon. Ultimately, both sides of the equation are important. You can’t store carbon without adopting the practices that enable it, and you can’t store carbon without the ground to do it in.

If you will recall, carbon sequestration is the practice of altering farm operations to enhance storage of carbon in the soil. This is primarily accomplished through adoption of no-till practices and cover crops. If these practices already have been implemented on a farm, it is unclear if credit or payment is available, since there wouldn’t be any change to the amount of carbon being stored.

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Farmers Feel Less Need to Borrow Money From the Bank


The strong agricultural economy, fueled by high commodity prices, has reduced farmers’ reliance on farm lenders, despite concerns about rising input costs, according to a Federal Reserve survey of ag bankers. “Higher costs are likely to put upward pressure on demand for credit, but strong farm income and working capital could also supplement financing for some borrowers,” said a Kansas City Federal Reserve Bank summary on Thursday.

Overall, banks advanced a smaller amount of money in non-real estate loans during the fourth quarter of 2021 than in the same period of 2020, said the Kansas City Fed. The average volume of non-real estate loans in the past 12 months reached a nearly 10-year low, with farm operating loans driving most of the decline.

Non-real estate loans cover an array of expenses, from livestock to farm equipment, and operating loans cover the day-to-day costs of crop and livestock production. The nationwide survey of farm bankers found that the average size of a non-real estate loan, roughly $83,000, was more than 20% smaller in October, November, and December 2021 than in the fourth quarter of 2020. Operating loans, at an average of $55,500, were more than 30% smaller.

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Fewer Transactions, No Less Land Interest


The momentum and strength in the late 2021 and early 2022 farmland market has been amazing to observe, and a lot of fun to work in. I do not recall a more active and positive sales environment in my 25-plus years in the farmland business. Depending on the value survey and/or publication you read, Iowa farmland has appreciated 20% to 40% year-over-year!

These mentioned positive returns are appreciation only — and we all know 2021 was also a strong income year. Without question, farmland as an asset class has had an incredible run over the past 12 months.

I do believe the strength in the land market will continue to flush some additional new sales into the market before 2022 spring planting. But, the major slug of off-season sales volume was pushed through before the end of 2021, with many sellers having been motivated to get a sale completed and closed before year-end, in hopes of avoiding possible tax law changes.

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ASFMRA Government Relations Update


USDA Expands Cover Crop Opportunities

Last week the Natural Resource Conservation Service (NRCS) announced a new partnership with Farmers For Soil Health, an initiative of the United Soybean Board, National Corn Growers Association and National Pork Board. Farmers For Soil Health works to advance use of soil health practices – especially cover crops – on corn and soybean farms. The initiative has a goal of doubling the number of corn and soybean acres using cover crops to 30 million acres by 2030.

To complement the new partnership, NRCS is investing $38 million through a new targeted Cover Crop Initiative in 11 states to help agricultural producers mitigate climate change through the widespread adoption of cover crops. States include Arkansas, California, Colorado, Georgia, Iowa, Michigan, Mississippi, Ohio, Pennsylvania, South Carolina, and South Dakota. Sign-up dates will be determined at the state-level, and applications will be selected for funding by Feb. 11, 2022.

Texas A&M Releases Fertilizer Price Impact Study

The Agricultural and Food Policy Center (AFPC) at Texas A&M University last week released a study of the impact of increased fertilizer prices on its 64 representative farms. The report was requested by Representative Julia Letlow (R-LA).

The report finds that based on current spot market prices, fertilizer prices will increase more than 80% for the 2022 planting season (relative to 2021).

The largest whole-farm impact of the increase in fertilizer costs would fall on AFPC’s feed grain farms at an average of $128,000 per farm and the largest per-acre impact would fall on AFPC’s rice farms at $62.04 per acre. The report concludes that given that the farm safety net is not designed to address rapidly rising costs of production, there are growing concerns in the countryside about the need for additional assistance.

House Agriculture Committee Holds Electric Vehicle Hearing

The House Agriculture Committee last week held an interesting hearing on the impact of electric vehicles (EV) in rural communities and agriculture.

In his opening statement, House Agriculture Committee Chairman David Scott, (D-Ga), said, “We are witnessing a point of major research, investment, and adoption of electric vehicles across the country and the world, driven in large part in an effort to mitigate the impacts of climate change. As with so many other technological advancements like electrification, broadband, or telephone service, I want to see what can be done to make sure that rural America is not left behind. And to that point, I want to also ensure that the needs of agriculture and rural residents are being considered with these important developments.”

A wide range of witnesses offered testimony with many not normally directly associated with agriculture, including witnesses from General Motors, the National Association of Convenience Stores, and the Manhattan Institute.

With the most direct link to EV impacting agriculture, Geoff Cooper with the Renewable Fuels Association (RFA) testified that the upstream emissions associated with electricity generation and battery manufacturing are often overlooked, giving the false impression that electric vehicles are zero-emission vehicles. (Starting around the 51:49 mark of the video recording, link below) Mr. Cooper noted that these overlooked emissions can be quite significant. An RFA analysis showed that a pickup truck using fuel that is 85 percent ethanol and 15 percent gasoline would generate far fewer greenhouse gas emissions over its lifetime than the same-size pickup truck “running on fossil-generated electricity.”

To watch a video of the hearing, click here.

To read the written testimony of witnesses, click here.

RMA Announces PACE Coverage Details

The Risk Management Agency (RMA) announced the details for a new Post Application Coverage Endorsement (PACE). PACE is a private product approved by the FCIC Board starting in crop year 2022 in selected counties/States. Corn farmers who split apply nitrogen applications on non-irrigated corn may be interested in the endorsement.

PACE provides payments for the projected yield lost when producers are unable to apply the post nitrogen application during the V3-V10 corn growth stages due to field conditions created by weather. PACE is offered in select counties in 11 states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. It is available as supplemental coverage for Yield Protection (YP), Revenue Protection (RP), and Revenue Protection with Harvest Price Exclusion (RP-HPE) policies.

US Prevails in Dairy Dispute

US Trade Representative Katherine Tai announced that the United States has prevailed in the first dispute settlement panel proceeding ever brought under the United States-Mexico-Canada Agreement (USMCA). A USMCA panel agreed with the United States that Canada is breaching its USMCA commitments by reserving most of the in-quota quantity in its dairy tariff-rate quotas (TRQs) for the exclusive use of Canadian processors. A copy of the panel report is available here.
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