Iowa Has Seen a 10% Increase in Cash Rent in 2022, Due to Higher Commodity Prices
The most recent annual survey of cash rental rates for Iowa farmland shows that rates increased, on average, by 10.3% in 2022 to $256 per acre. This is the third consecutive and largest uptick in cash rents since 2013, when rents peaked at $270 per acre — a level 5.5% higher in nominal terms than in 2022. In comparison, nominal corn and soybean prices received by farmers in Iowa declined by 16% and 11%, respectively, since mid-2013.
Iowans supplied 1,401 usable responses about typical cash rental rates in their counties for land producing corn and soybeans, hay, oats and pasture. Of these, 43% came from farmers, 34% from landowners, 8% from professional farm managers and realtors, 8% from agricultural lenders, and 7% from other professions and respondents who chose not to report their status. Respondents indicated being familiar with a total of 1.5 million cash-rented acres across the state.
There was considerable variability across counties in year-to-year changes, as is typical of survey data, but 95 out of the 99 Iowa counties experienced increases in average rents for corn and soybeans. Only Buchanan, Davis, and Mahaska counties experienced declines in their overall average cash rents, while Black Hawk County experienced no change in average rent.
Read the Full Story
California Water Rights Buyback Proposal Met With Enthusiasm, Resistance
A new proposal in the California Senate includes using taxpayer money to buy out farmers’ water rights. The $1.5 billion plan would see the government purchase “senior water rights” for the purpose of benefitting endangered fish species in the state.
Proponents argue it’s an opportunity to conserve not just water but types of salmon that are rapidly facing possible extinction while possibly paving the way for environmental water rights. Opponents believe it could force farmers to give up their long-held rights and potentially set a precedent for further rollbacks of those rights.
With 98 percent of the state facing severe drought conditions, some farmers have seen their water allocation cut significantly. Opponents of the proposal see buybacks as backing farmers into a corner. With the offer of money and water allocations cut so significantly, Republican state Senator and Gubernatorial candidate Brian Dahlie sees the proposal as a potential death knell to a new generation of some farmers.
Read the Full Story
100-Acre Plymouth County Farm Sells for $2.6M at Auction
A farm in Plymouth County sold for $25,000 an acre on Friday, a price more than twice as high as the average in the county.
Bruce R. Brock, whose Brock Auction Company conducted the sale, said the land -- about 96.33 acres of farmland and a 3.67-acre farm place at 38625 200th St., a gravel road about 5 miles southeast of Le Mars -- sold for a total of more than $2.6 million.
The buyers are neighbors to the north of the farm, who Brock described as "a great farm family."
"I think it was a very good farm, no question about it," Brock said in a phone call Sunday. "It had a lot going for it, it didn't take on any water from anybody else, there was just a teeny little bit of slope to it, so that the water drained well off it. It was top-quality soil, in a good, high state of productivity." Read the Full Story
A Wild, Windy Spring Is Creating a Soil Erosion Nightmare for Farmers
When he saw a roiling thunder bank of black clouds blowing into Salem, South Dakota, last month, farmer Kurt Stiefvater thought it would take 20 minutes to reach his property. It took five. “I couldn’t believe how fast it was moving,” he says of the over 100-mile-per-hour gusts.
Not only did that wind event—technically categorized as both a derecho and a haboob—send soil airborne, it unearthed wet crop residue. “I had some oats that were about three inches or so—and it sheered them off,” he says. “I couldn’t believe it pulled up that amount of dirt; we had just had two inches of rain two days before,” he recalls. The line of thunderstorms, which developed in Nebraska, raced into eastern South Dakota, northwestern Iowa, and western Minnesota. On his farm, Stiefvater says, the dust storm lasted only about 25 minutes.
“I was hoping [the soil] would stay in place better,” says Stiefvater, who grows corn, soybeans, alfalfa, and oats on his 1,800-acre crop operation. But, ultimately, he was one of the lucky ones. The storm killed two people, downed power lines, and most of his neighbors in the town of 1,500 saw damage to their houses, sheds, and grain bins. Not only was he in a safer location, but his approach to soil management as a farmer who grows cover crops and practices no-till likely helped him avoid bigger losses.
Read the Full Story
Some Downward Movement in Fertilizer Prices
Although fertilizer prices are high, a market expert says prices have moved down on several products.
Josh Linville with StoneX tells Brownfield the shift in the market has been unexpected. “This has been a little shocking. All of the sudden, now we have got urea almost half price from its high back in March, and phosphate values have fallen off several hundred dollars and we’re watching things like anhydrous and UAN very closely, so yeah, it’s been a very hectic spring.”
Linville with StoneX tells Brownfield the shift in the market has been unexpected. “We’re starting to see the same thing happening on UAN. Phosphate is down. About the only one we haven’t seen fall substantially is anhydrous, which I think is a matter of time when the producers start coming out with their fill programs and fall pre-pay programs, which could be any week now.”
Read the Full Story
ASFMRA Government Relations Update
CRP Flexibilities AnnouncedUSDA will allow Conservation Reserve Program (CRP) participants who are in the final year of their CRP contract to request voluntary termination of their CRP contract following the end of the
primary nesting season for fiscal year 2022. Participants approved for this one-time, voluntary termination will not have to repay rental payments. USDA is providing the flexibility this year to help mitigate global food supply challenges. Producers who request voluntary termination will be able to hay, graze, or begin land preparation activities and plant a fall-seeded crop before October 1, 2022.
EPA Announces RFS RequirementsThe Environmental Protection Agency (EPA)
announced the long-awaited volumetric requirements for renewable fuels for 2020, 2021 and 2022 under the Renewable Fuels Standard last week. As part of an effort to “re-set and strengthen” the Renewable Fuel Standard (RFS), the EPA set the corn ethanol mandate at its highest level ever, 15.25 billion gallons, for this year.
In addition to finalizing the volume requirements,
the rule “also finalizes a regulatory framework to allow ‘biointermediates’ to be included in the RFS program, while ensuring environmental and programmatic safeguards are in place,” EPA said. Biointermediates are feedstocks that have been partially converted at one facility but are then processed into an RFS-qualified biofuel at a separate facility.
CBO Releases Federal Budget EstimatesThe Congressional Budget Office (CBO) released its federal budget estimates including estimates for crop insurance, commodity, and conservation programs. CBO projects that the federal budget deficit will shrink to $1.0 trillion in FY 2022 (it was $2.8 trillion last year) and that the annual shortfall would average $1.6 trillion from FY 2023 to FY 2032. The deficit continues to decrease as a percentage of gross domestic product (GDP) next year as spending related to the coronavirus pandemic wanes, but then deficits increase, reaching 6.1 percent of GDP in FY 2032. The deficit has been greater than that only six times since 1946.
The CBO
estimates the crop insurance program to cost on average $7.8 billion per year over the FY 2023 – FY 2032. CBO assumes the loss ratio is on average .85 over that period, while the Administration’s budget assumes the statutory loss ratio of 1.0.
The CBO is lowering its cost estimates for farm bill commodity programs (ARC & PLC) in the near term due to the sharp increases in commodity prices. At the same time, CBO estimates more spending on the Supplemental Nutrition Assistance Program (SNAP) than previously thought. CBO estimates farmers will receive just $480 million in Price Loss Coverage payments in FY 2023 and $422 million in FY24. CBO estimates SNAP spending at $159 billion for FY 2022 and well over $100 billion each year over the next ten years. That will put the total cost of SNAP over $1 trillion over 10 years, making the next farm bill’s total 10-year cost over $1 trillion. The CBO budget estimates next year will form the baseline spending for the 2023 farm bill.
USDA Announces Food Supply Chain FrameworkDuring a speech last week, USDA Secretary Vilsack said the USDA would put nearly $3 billion into grants, loan guarantees, and an array of
programs to transform the U.S. food system. More than half of the funding announced by Vilsack would go toward expanding small and medium-sized independent processing capacity, with $875 million for meat and poultry processors and $800 million for supply chain infrastructure for fruits, vegetables, and nuts, and for certifying safe practices on the farm. The USDA also would put $400 million into regional food business centers and $300 million into helping farmers transition to organic production.
Senate Agriculture Committee Schedules Second Farm Bill HearingThe Senate Agriculture Committee has scheduled its second farm bill field hearing in the Ranking Member’s State (Senator Boozman, R-AR) for June 16th at the Riceland Hall – Fowler Center, Arkansas State University in Jonesboro, Arkansas starting at 9 am. The previous field hearing was held in Senator Stabenow’s (D-MI) home state.
House Agriculture Committee to Review Crop Insurance Commodity ProgramsThe General Farm Commodities and Risk Management Subcommittee of the House Agriculture Committee will hold a hearing this Thursday, June 9, at 9 am eastern to review the economic perspectives of Title I and Title XI of the 2018 farm bill, the Commodity and Crop Insurance Title respectively. Witnesses have not been announced, but members will hear from four agricultural economists.