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ASFMRA Ag News - October 24, 2023

By ASFMRA Press posted 10-24-2023 08:38 AM


Arkansas Orders Syngenta Land Sale Over Chinese Ties

Arkansas Attorney General Tim Griffin has ordered Syngenta-owned Northrup King Seed Co. to sell 160 acres of land in the state because of their Chinese roots.
Arkansas is giving Syngenta two years to sell its acreage in the northeastern part of the state, stating national security as the primary reason. According to Reuters, the global seed company is unsurprisingly discontent over the order. 
“This is about where your loyalties lie,” Arkansas Gov. Sarah Huckabee Sanders said at a news conference. Syngenta called the decision a “shortsighted action” that will hurt Arkansas farmers. 

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High Interest Rates Are Already Impacting Farmers, And It's Coming at the Expense of Ag Loans

Farmers are opting to tap into their savings from recent prosperous years instead of taking out loans at the highest interest rates since 2007, according to surveys conducted by regional Federal Reserve banks. Reports indicate that the average operating loan issued in the past summer was almost 20% smaller than the previous year's average.
The Kansas City Fed noted that lending activity has weakened, influenced by nearly two years of rising interest rates on farm loans, which have significantly increased financing costs for farmers. While the farm economy has recently shown moderation due to narrower profit margins driven by commodity prices and increased expenses, credit needs have risen for many farmers, mainly due to high input costs. However, many producers have been able to supplement their financial needs with savings amassed during previous profitable years.
 USDA predicts that net farm income, a broad measure of farm profitability, will amount to $141.3 billion this year, marking a 22% decline from the record $183 billion in 2022. Despite this decrease, the income for this year would still be the second highest ever recorded and $40 billion above the 10-year average. The decline in income is attributed to lower receipts from crop and livestock sales, coupled with higher expenses. The debt-to-asset ratio, which indicates solvency, is expected to decrease slightly.

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Why Pay $34,800 an Acre for Farmland?

In a remarkable turn of events, Missouri set a new benchmark in the farmland market this fall. A seemingly unremarkable 115 acres in Saline County, Mo., recently sold for an astonishing $34,800 per acre in late September, shattering the previous record held by Iowa at $30,000 per acre. This rapid sale, which concluded in a mere 15 minutes, was the result of a fierce bidding war between two farmers. The victor, Jeff Baxter from Carroll County, Mo., isn’t an investor but a neighboring farmer.
In August, an auction of 60 acres of Adams County, Ill., farmland brought $30,000 per acre with little fanfare.
The difference with that sale is that it was considered development ground. High prices on development ground are expected and not really newsworthy. What makes the Missouri sale stand out is that the reason for the demand for that piece of ground is not so obvious.

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Navigator CO2 Ventures Cancels Carbon-Capture Pipeline Project in U.S. Midwest

Navigator CO2 Ventures has canceled its Heartland Greenway pipeline project aimed at capturing 15 million metric tons of carbon dioxide annually from Midwest ethanol plants and storing it permanently underground, the company said on Friday, citing "unpredictable" state regulatory processes.
The cancellation of one of the biggest projects of its kind is a setback to the development of carbon capture and storage (CCS) projects in the U.S., which are a pillar of President Joe Biden's climate strategy. It is also a blow to the ethanol industry, which sees CCS as key to cutting emissions from producing the fuel.
The Navigator project would have laid 1,300 miles (2,092 km) of pipeline across five states. Residents along the route expressed concern to state regulators about potential safety risks if the pipeline should leak and about harm to their land from construction.

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Smart Solutions to Farmland Loss

Indiana has some of the best agricultural land in the world — and it is losing substantial chunks of that best ground to urban sprawl. But according to Cris Coffin, director and senior policy advisor for the National Agricultural Land Network, there are ways to both support economic development and preserve ag land at the same time.
“We’re not anti-development,” Coffin says. “Rather, we’re about encouraging communities to become smarter in how they allow development, particularly residential development, to limit the conversion of agricultural land we would consider to be unnecessary.”
Coffin described NALN’s Farms Under Threat multiple-year initiative, which seeks to document the status of and threats to U.S. agricultural land while offering policy solutions to save that land. There are two primary types of development, she notes: traditional “urban and highly developed” land and “low-density residential,” which includes less dense subdivisions in rural areas where residential use is intensifying.

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ASFMRA Government Relations Update

House Republicans Can’t Come Together, White House Requests $100 Billion Supplemental

House Republicans continue to struggle to find a House Speaker after removing Speaker McCarthy over 3 weeks ago. The drama will continue this week with fresh faces attempting to find the magical 217 votes to become the next House Speaker. In the interim, the White House transmitted a FY 2024 $100 billion supplemental request to largely fund the Ukraine and Israel war efforts, border security and other national security concerns. An additional emergency supplemental is expected this week to fund domestic concerns such as relief for the fires in Hawaii. It is possible this request will include emergency ad hoc crop disaster payments for crop year 2023.

Farm Bill Expiration 

The 2018 Farm Bill did expire at the end of September. For many programs, like crop insurance, the expiration of authority doesn’t apply. For others, such as commodity programs and the Conservation Reserve Program, the underlying authority has expired and no new contracts can be obligated, but existing contract payments continue. For other programs, both the authority and the funding has expired.

The Congressional Research Service (CRS) published or updated two articles with background information regarding how the farm bill expiration impacts existing programs and which programs no longer have funding.

USDA Releases Double Crop Data

In 2022, USDA announced the expansion of insurance coverage for double cropping for 2023 in nearly 1,500 counties. With the expansion in 2023:

  • USDA’s Risk Management Agency (RMA) processed 4,166 new requests for coverage in the states where insurance for double cropping was expanded or made easier. This includes 1,611 new requests for coverage for second crop grain sorghum in Kansas, Missouri, Oklahoma, and Texas, and 2,555 requests for coverage for second crop soybeans in Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, Oklahoma, Texas, and Wisconsin.
  • In states where double cropping coverage was expanded or made easier, nearly one million additional acres were insured, representing a more than 43% increase in insurance coverage for second crop acres compared to the 2014-2022 average.
  • In states where double cropping coverage was expanded or made easier, there was a significant increase in winter wheat plantings. For example, Illinois saw a nearly 40% increase, Ohio saw a more than 30% increase, and Michigan saw a 21.5% increase according to RMA.

CRP Payments Total Over $1.77 billion

USDA paid more than $1.77 billion to the Conservation Reserve Program’s (CRP) more than 667,000 participants from the Farm Service Agency (FSA). The payments were made for voluntary conservation efforts on more than 23 million acres of private land. Since 2021, CRP has grown by 21 percent in terms of acres enrolled.

Top five states for CRP participant payments:

  • Iowa, $402,508,900
  • Illinois, $172,723,800
  • Minnesota, $150,773,400
  • South Dakota, $129,545,200
  • Missouri, $99,849,600