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ASFMRA Ag News - February 14, 2023

By ASFMRA Press posted 02-12-2023 01:08 AM


Bringing Millennials and Farmland Together

Friction between generations has been going on for a very long time. Descriptions like lazy, entitled and excessive can be found for each new generation in literature all the way back to Aristotle.

Maybe routine, everyday life causes those of us in the older generation to just forget what it’s like to be young. I tend to think that each successive generation faces challenges and opportunities that differ from the previous generation. And that gives each generation a unique view of the world, which can ultimately divide us.

Whatever the reason, young adults are the most valuable resource we have in agriculture. Bridging the divide between generations is important. We each have a wealth of knowledge that can only be shared if we’re engaged.

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Farm sector profits projected to fall in 2023 after highs in 2022

Farm sector profits are projected to fall in 2023 after record highs in 2022. Net farm income, a broad measure of profits, is forecast at $136.9 billion in the calendar year 2023, a 15.9 percent decrease compared to 2022. 

In 2022 the agriculture industry reached a record high of $167.3 billion, its highest level since 1973 after adjusting for inflation. Despite the expected decline in 2023, net farm income would remain 26.6 percent above its 20-year average of $108.1 billion in inflation-adjusted dollars.

When adjusted for inflation, the U.S. Department of Agriculture anticipates that gross cash income minus cash expenses will decrease by $44.7 billion, to $150.6 billion, in 2023, a 22.9 percent decline. 

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Farmland Becomes Flashpoint in US-China Relations

For more than two years, the mayor of this city near the Minnesota border backed a Chinese company’s plans to build a $700 million corn mill on the outskirts of town, citing the prospect of new jobs, added tax revenue and another place for farmers to sell their corn.

Then last week Brandon Bochenski reversed course, hours after the release of a letter from an Air Force official declaring the corn-mill project a security risk because of its proximity to the Grand Forks Air Force Base 12 miles away.

"When it comes to national security, I don’t think the economics matter," said Mr. Bochenski, a former professional hockey player who previously played in Russia and was elected mayor in 2020. "You’ve got to draw a hard line there."

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Ag Land Property Tax Changes Draw Mixed Reaction

A proposal to change how Nebraska calculates property taxes on agricultural land drew mixed reactions at a public hearing Friday.

Gov. Jim Pillen wants to change how Nebraska values agricultural land for tax purposes. Currently, that’s done by market value. But Pillen said that can produce distorted results – for example, farmland located near a rapidly growing suburban area can be assessed at what it would be worth if sold to build a subdivision. He said it makes more sense to value ag land based on the income it can produce if used for farming or ranching.

“This change brings common sense… back to land assessment process, and is a key component in helping provide the tax relief for the ag industry. I believe we should not be putting producers in a position where the value of their land is so high that they can't afford to do business,” Pillen said.

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New York Investors Snapping up Colorado River Water Rights

With the federal government poised to force Western states to change how they manage the alarming shortfall in Colorado River water, there is one constituency with a growing interest in the river's fate that's little known to some: Wall Street investors.

Private investment firms are showing a growing interest in an increasingly scarce natural resource in the American West: water in the Colorado River, a joint investigation by CBS News and The Weather Channel has found. For some of the farmers and cities that depend on the river as a lifeline, that interest is concerning.

"Our only source of water is the Colorado," says Joe Bernal, who raises cattle and grows crops on land across Colorado's Grand Valley, relying on water from the drought-depleted Colorado River.

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ASFMRA Government Relations Update

Crop Insurance Coalition Letters Urge No Cuts

Sixty-one farm, crop, and insurance organizations including ASFMRA joined in sending a letter to the House and Senate Budget and Appropriation Committees as well as the Administration. The letter urges support for crop insurance and to protect it from any harmful budget cuts during the FY2024 budget and appropriation process. Similar letters have been sent in previous years. You can read the letter to the Budget Committees here.

Chairman Thompson Announces House Agriculture Subcommittees and Subcommittee Chairs

House Agriculture Committee Chairman G.T. Thompson (R-PA) announced 6 subcommittees, their respective chairs and jurisdiction for the 118th Congress. Congressman Austin Scott will also serve as Vice Chair of the Full Committee. The subcommittees and chairs are:

Subcommittee on General Farm Commodities, Risk Management, and Credit—Rep. Austin Scott (GA)

Subcommittee on Forestry—Rep. Doug LaMalfa (CA)

Subcommittee on Conservation, Research, and Biotechnology—Rep. Jim Baird (IN)

Subcommittee on Nutrition, Foreign Agriculture, and Horticulture—Rep. Brad Finstad (MN)

Subcommittee on Livestock, Dairy, and Poultry—Rep. Tracey Mann (KS)

Subcommittee on Commodity Markets, Digital Assets, and Rural Development—Rep. Dusty Johnson (SD)

Senate Reviews Crop Insurance, Commodity Programs and Credit

The Senate Agriculture Committee held a farm bill review hearing last week covering crop insurance, Farm Service Agency (FSA) commodity and credit programs. Undersecretary Robert Bonnie was the sole witness for the hearing. He was accompanied by FSA Administrator Zach Ducheneaux and RMA Administrator Marcia Bunger. A replay of the hearing and written testimony are available. Nearly every Senator that asked questions started out or finished their allotted time with a statement of support for crop insurance.

Both the Chair, Senator Stabenow (D-MI), and Ranking member, Senator Boozman (R-AR) noted that gaps remain in the farm safety net. Senator Boozman noted that over $70 billion in ad hoc payments have been made since the 2018 farm bill was passed compared to much payments under the Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) program and asked how the Committee could capture ad hoc payments to strengthen the commodity programs. Both Senators also made comments that PLC and ARC are ill equipped to deal with the current farm economic situation (high prices and high input costs).

Senator Boozman also raised concerns about using crop insurance to incent the adoption of climate smart practices. Several Senators also asked questions about farmer access (beginning farmers and ranchers) to crop insurance and the need to expand coverage to specialty crops.

Senators Thune (R-SD) and Klobuchar (D-MN) raised concerns with the USDA’s methodology for Emergency Relief Payments (ERP) under Phase 2 of the ERP, saying they do not adequately compensate farmers for their losses. Senator Thune urged USDA consider reverting to the approach used in Phase 1 of the ERP effort for 2022 losses that recently passed in the omnibus appropriations bill, a suggestion that Senator Klobuchar also made.

House Democrats Complete Agriculture Committee Roster and Announce Subcommittee

Ranking Members Ranking member David Scott (D-GA) announced the complete roster for Democrats on the House Agriculture Committee. Recall there were 3 vacancies after the initial roster announcement. Four Democrats have received waivers to return to the Committee and Virgin Island Delegate Plaskett withdrew from her committee assignment. The four members with waivers are Salud Carbajal (CA), Angie Craig (MN), Chellie Pingree (ME), and Darren Soto (FL). Soto was not a member of the Agriculture Committee last Congress, the other three were.

Ranking Member Scott also announced the following subcommittee ranking members:

Subcommittee on General Farm Commodities, Risk Management, and Credit Rep. Shontel Brown (OH)

Subcommittee on Forestry Rep. Andrea Salinas (OR)

Subcommittee on Conservation, Research, and Biotechnology Rep. Abigail Spanberger (VA)

Subcommittee on Nutrition, Foreign Agriculture, and Horticulture Rep. Jahana Hayes (CT)

Subcommittee on Livestock, Dairy, and Poultry Rep. Jim Costa (CA)

Subcommittee on Commodity Markets, Digital Assets, and Rural Development Rep. Yadira Caraveo (CO)