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ASFMRA Ag News - August 16, 2022

By ASFMRA Press posted 08-15-2022 10:53 PM


Disney Family Ranch Lists at $71 Million

A secluded Wyoming ranch once owned by the Walt Disney family that is surrounded by mountains and national forest, and is located just 23 minutes from Yellowstone National Park, has hit the market for $71 million.

Diamond G Ranch sits about 90 miles east of Jackson Hole, near the town of Dubois. The ranch spans about 5,000 deeded acres and contains a five-bedroom lodge that has served as the owner’s residence. Other structures include a log guest house with an enclosed porch and two log cabins.

There’s an enormous century-old barn with storage on the first level and an office, boardroom and kitchenette upstairs. Another structure on the land is a 1,500-square-foot manager’s house with three bedrooms.

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Deadline Looms for Drought-Stricken States to Cut Colorado River Water Use

Banks along parts of the Colorado River where water once streamed are now just caked mud and rock as climate change makes the Western U.S. hotter and drier.

More than two decades of drought have done little to deter the region from diverting more water than flows through it, depleting key reservoirs to levels that now jeopardize water delivery and hydropower production.

Cities and farms in seven U.S. states are bracing for cuts this week as officials stare down a deadline to propose unprecedented reductions to their use of the water, setting up what’s expected to be the most consequential week for Colorado River policy in years.

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As Farmland Values Soar, So Do Fears of a Price Bubble

Flush with cash, farmers and investors have driven up farmland values this year at breathtaking rates — a 12% gain nationwide and more than 20% in three Farm Belt states. “Given recent experiences with fluctuations in the broader economy and prior farmland price dynamics, many market participants express concern that the rapid increase in farmland prices is a signal of a speculative bubble,” said three Purdue University economists.

While two-thirds of the agricultural professionals who took part in Purdue’s annual land-value survey said prices for top-quality farmland in Indiana were too high, 27% of respondents said they expected prices to climb higher still this year and through 2027.

Although bubbles are relatively easy to describe — occurring when the price of land exceeds its income potential — they are difficult to measure, wrote the economists in the quarterly Purdue Agricultural Economics Review. They applied two yardsticks to Indiana prices: a comparison of land prices to the capitalized returns from cash rents, and a “double-question survey” of market expectations developed by two University of Southern California scholars to identify asset bubbles.

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From Farmland to Frac Sand

Fracking, a process used to extract natural gas and petroleum, depends on silica sand, or “frac sand” to produce the fossil fuels. A single fracking site can use millions of pounds of sand. The sand is blasted into wells to keep fissures in the rock open so that oil and gas can be released.

In the Midwest, farmland is being irreversibly lost in pursuit of silica sand.

Wedron Silica, which is now owned by Ohio-based Covia, has been expanding this particular mine for years and now owns at least 2,500 acres in and around the tiny village. It’s just one of several that Covia owns across LaSalle County, Illinois, 90 miles southwest of Chicago. Here, U.S. Silica, Smart Sand, and other companies are also actively mining.

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No-Till Farming Study Shows Benefit to Midwestern Land Values

No-till farming, considered to be a more environmentally friendly farming practice that reduces soil disturbance when compared with conventional practices, appears to have an important benefit besides reducing soil erosion and nutrient runoff.

A new study from North Carolina State University, capturing county-level data from 12 states in the U.S. Midwest, shows that no-till farming increases agricultural land values, with a 1% increase in no-till farming translating to a $7.86 per acre increase in land values across the Midwest. In Iowa, the data show a $14.75 per acre increase in land value with a 1% increase in no-till farming.

Rod Rejesus, professor of agricultural and resource economics at NC State and corresponding author of a paper describing the work, said the study appears to be the first in the academic literature to quantify monetary land value benefits of no-till farming.

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ASFMRA Government Relations Update

Inflation Reduction Act Moves to President for Signature

On Friday, the House passed the Inflation Reduction Act on a party-line vote of 220 – 207. No Democrat voted against the bill and no Republican voted for it. The Senate had previously passed the package on a party-line vote with Vice President Harris casting the tiebreaking vote (51 -50).

The $740 billion tax, climate and health care bill runs 755 pages. The conservation title of the farm bill will see slightly over $18 billion influx for Natural Resource Conservation Service (NRCS) administered programs over the next 4 years, more than doubling total program spending.

The Environmental Quality Incentives Program (EQIP) gets an increase of $8.45 billion or over 100% of its baseline spending. The Conservation Stewardship Program (CSP) is increased by $3.25 billion, nearly 100% of its baseline spending. The Agricultural Easement Conservation Program (ACEP) will increase by $1.4 billion, and the Regional Conservation Partnership Program (RCPP) increase is nearly 5-fold at $4.95 billion.

Senate Democrats also added $5.3 billion in farm debt relief to the package. $3.1 billion in assistance to "distressed" borrowers who hold direct or guaranteed farm loans and $2.2 billion in payments to farmers who had experienced discrimination in USDA loan programs. Payments would be capped at $500,000 per producer. The provisions are paid for by repealing a debt relief program authorized by the American Rescue Plan in 2021 which has been tied up in the courts.

In addition, the bill would extend or expand tax credits for sustainable aviation fuel, carbon capture, biodiesel, and renewable diesel. Also included is $14 billion for rural power and clean energy and $6 billion for wildfire protection and climate-smart forestry.

RMA Awards $2.2 million for Risk Management Education

The Risk Management Agency (RMA) announced last week it is awarding $2.2 million to 16 organizations to educate historically underserved producers, small-scale farmers and others on farm risk management and climate-smart farm practices. The funding) provides the resources for organizations, such as nonprofits and universities, to develop training and resources for producers on risk management options.

NRCS Announces $197 million for Conservation Partnerships

Last week the Natural Resource Conservation Service (NRCS) announced it is awarding $197 million for 41 locally led conservation projects through the Regional Conservation Partnership Program (RCPP). The recently passed Inflation Reduction Act increases RCPP spending 5-fold (nearly 5 billion) over the next 4 years. Check out the partnership list to get an idea of what USDA is likely to be funding with its increased spending authority.