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ASFMRA Ag News - August 15, 2023

By ASFMRA Press posted 08-15-2023 09:49 AM


Why Big Finance Is Betting on Farmland

On the wind-swept plains of the heartland, an agricultural revolution is quietly underway. This one’s not led by advances in machinery or biotech, but rather by the inconspicuous behemoths of financial institutions: the institutional investor.

Who are these institutional investors?

Everyday individual investors make up the entities buying farmland, bringing together funds from people of various professions and backgrounds. Individual investors are people just like you and me: teachers, health-care workers, civil servants contributing to pension funds, or affluent individuals or families engaged with mutual funds or private equity funds. They can also be linked to religious, academic or cultural organizations with sizable endowments.

Read the Full Story by Michael Lauher, AFM

After Run-Up, Farmland Prices May Become More Stable

Higher interest rates and weaker commodity prices may slow the momentum for ever-higher farmland values, said the Chicago and Kansas City Federal Reserve banks in quarterly reports on Thursday.

“After this unusual period of large farmland gains, it wouldn’t be too surprising if we were back to that general stable [land value] scenario for a while,” said David Oppedahl, policy adviser at the Chicago Fed.

Ag bankers taking part in a Chicago Fed survey said farmland values rose by 9% in the Midwest in the past year. They overwhelmingly anticipated land values to be stable during the summer. In the Kansas City Fed district in the central Plains, bankers reported an increase of nearly 8% in farmland values this spring.

Read the Full Story

SCOTUS WOTUS Decision Continues to Reverberate

The Supreme Court’s 9-0 ruling for the plaintiffs in the Sackett vs. EPA case might seem to be the final word in the lengthy and, oftentimes, politically charged debate over what’s included in the term “Waters of the United States.”

While farmers and landowners may have hoped the Court’s May 25 decision would bring an end to the uncertainty over what is included in the definition of navigable waters, those expectations may prove to be a bit rosy.

“I think there is some hope the Supreme Court’s decision in Sackett would be the nail in the coffin and give us our final definition of Waters of the United States,” said Brigit Rollins, staff attorney with the National Agricultural Law Center, “but I think that’s a little bit of an optimistic hope.

Read the Full Story (ASFMRA members can access recent WOTUS webinar recording by clicking here)

Farm Bureau Reviews USDA Land Values Report

Agricultural land values increased by $280 an acre over 2022, according to USDA’s National Agricultural Statistics Service. The Land Values 2023 Summary report, released on August 4, shows a 7.4% increase following 2022’s record-breaking numeric increase of $420 per acre (12%) over 2021. Cash rent values for cropland were up 4.7% to a record $155 per acre and up 7.1% to $15 per acre for pastureland. This annual report provides one of many indicators of the overall health of the agricultural economy and illustrates yet another heightened production cost and barrier to profitability faced by farmers and ranchers.

The U.S. average farm real estate value, a measurement that includes the value of all land and buildings on farms, clocked in at a record $4,080 per acre. This 7.4% increase over last year is less than the 12% bump between 2021 and 2022, which was the largest change since 2006, when values increased 14% over 2005. Excluding last year, 2023 farm real estate values had the largest percentage increase since 2014. Looking at the dollar value of the change, the $280 per acre increase over 2022 is the second-highest increase since the USDA began the survey in 1997.

Read the Full Story

Kris Kristofferson’s Oceanfront Ranch in California Lists for $17.2 Million

Kris Kristofferson’s oceanfront ranch in Northern California is coming to market for $17.2 million. 

Spanning about 550 acres, the ranch is located just outside of Elk, a community about three hours north of San Francisco and a popular enclave for artists and musicians, said listing agent Justin Nadeau of Mendo Sotheby’s International Realty. 

The country singer, songwriter and actor bought the ranch around 1980 for an undisclosed amount, Nadeau said. He and his wife, Lisa Kristofferson, also own property in Hawaii, records show. They have been leasing a portion of the California ranch for cattle grazing, Nadeau said. Recently, they decided “it’s time to let it go and move on,” he said.  

Read the Full Story

ASFMRA Government Relations Update

Congress Begins Recess, Returns after Labor Day 

Both the House and Senate started their annual August recess. Both will return after Labor Day to Washington. Neither body has made as much progress as they would like to pass the 12 annual appropriations bills. The Senate has approved all 12 through Committee has not considered any bill on the Senate floor, while the House has passed 10 of 12 bills through Committee and one across the House floor (Military Construction, Veterans Affairs). The Agriculture spending bill was not considered at the end of July by the House. The Federal fiscal year ends September 30 and there will be fewer than 15 legislative days remaining when Congress returns in September. A Continuing Resolution (CR) will be required to keep the government open. A government shutdown is entirely possible this year.

Base Acre Update in Farm Bill?

The National Corn Growers Association (NCGA) recently stated it supported a mandatory base acre update in the 2023 farm bill. Updating base acres is a returning farm bill policy question. The Senate Agriculture Committee Minority staff (Senator Boozman R-AR) released analysis showing there are significant “winners and losers” with a mandatory base acre update with the South and the state of Arkansas in particular on the losing side.  Jonathan Coppess with the University of Illinois also recently published an analysis of updating base acres. His analysis showed similar results. Previous base acre updates have been voluntary, not mandatory. A mandatory base acre update would generate “savings” that could be spent elsewhere in the bill while a voluntary update would cost money.

Californians Introduce Permanent Disaster Bill

California Senators Feinstein (D-CA) and Alex Padilla (D-CA) and Representatives Mike Thompson (D-CA), and Doug LaMalfa (R-CA) have introduced the Agricultural Emergency Relief Act to create a permanent structure at the USDA to provide a standing crop disaster program. The bill is subject to appropriations, meaning it does not provide any funding unless the Appropriations Committee were to subsequently fund it. 

The proposed standing disaster program is largely mirrored from USDA’s Emergency Relief Program (ERP), which was established by USDA based on FY 2022 appropriations language to cover losses from crop years 2020 and 2021. ERP has since been extended to cover 2022 crop losses. No appropriation has been provided to cover 2023 crop losses to date. 

House Agriculture Farm Bill Listening Sessions

The House Agriculture Committee held two farm bill listening sessions last week.  On Monday, July 31, House Agriculture Committee Chairman, Congressman G.T. Thompson (R-PA), traveled to Freeport, Maine for a listening session, along with several House Agriculture Committee Members.  On August 2, Chairman Thompson attended the annual Farm Fest in Minnesota and conducted another farm bill listening session with several other members of Congress.  

Democrat Senators Introduce Whole Farm Improvement Bill 

Senators Sherrod Brown (D-OH), Peter Welch (D-VT), John Fetterman (D-PA), Tina Smith (D-MN), Cory Booker (D-NJ), and Raphael Warnock (D-GA) introduced the Whole Farm Revenue Protection Program Improvement Act of 2023 last month. The purported goal is to improve Whole Farm coverage for small and medium sized producers.

According to the authors the bill would:

  • Authorize the FCIC to carry out research and development to increase crop insurance participation by farmers marketing to local and regional markets.
  • Clarify that producers are permitted to enroll in a WFRP plan in addition to other insurance plans.
  • Authorize the FCIC to consider expanding the diversification premium discount to farmers that utilize a resource-conserving crop rotation.
  • Direct the FCIC to implement several targeted modifications to WFRP design and delivery to improve effectiveness for specialty crops and diversified farms.
  • Reduce paperwork burdens by clarifying that Schedule F tax forms are sufficient to establish historic revenue and that agents only may request additional paperwork if tax records are incomplete.
  • Prohibit the adjustment of price and production expectations at the time of submission of a loss claim.
  • Apply the streamlined application process introduced in the Micro Farm pilot to producers with at least $1 million in gross revenue, to include all small and mid-sized farms as defined by USDA.
  • Raise the annual 35% limit to historic gross revenue expansion to the lower of 100% or $500,000, to allow beginning and scaling farmers to be insured at a level that keeps pace with rapid operational growth.
  • Expand the diversification premium discount to apply to producers with at least 10 commodities, encouraging more diverse farmers to enroll in the program.
  • Moderate the impact of disaster years by including Noninsured Crop Disaster Assistance Program payouts as historic gross revenue or establishing a floor to how much historic gross revenue may fall annually.
  • Compensate crop insurance agents appropriately for Whole-Farm Revenue Protection sales in a manner determined by the Secretary, overcoming a key barrier for agents who are reluctant or refuse to sell WFRP policies.
  • Provide additional educational and training opportunities regarding Whole-Farm Revenue Protection to insurance companies and agents.