Silicon Valley Billionaires Bully Farmers & Landowners, Sue Over Inflated Land Prices
A Silicon Valley group backed by billionaires said it’s acquired all the land it needs to build a utopian city in northern California, after quietly buying more properties in the past month.
Flannery Associates, the company behind the California Forever project, spent more than $800 million scooping up land for the project, a buying spree done extremely discreetly over several years which was first revealed in late August by the media. The project has since faced criticism from local officials and residents who fear the impact of their plans on the environment, local agricultural economy and for the security of the nearby Travis Air Force Base.
Adding to the tensions, Flannery is suing a group of Solano landowners for allegedly colluding to inflate the values of their property by $170 million. Flannery is seeking at least $510 million in damages, or triple the amount allegedly inflated by price fixing. The landowners deny the claim and are seeking to dismiss the suit.
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Does China’s Economic Trouble Threaten Illinois Farmland Values?
As a young man, I had the opportunity to travel throughout China, which was just beginning to open back up in 1985. I saw people who yearned for a better life. The industriousness of their society made it happen.
In the span of a generation, many Chinese people lifted themselves out of poverty. In 2000, China’s middle class amounted to just 3% of its population. By 2018, this number had climbed to over half of the population, constituting nearly 707 million people.
In today’s globalized world, the economic health of one nation can have ripple effects across continents. China, as the world’s second-largest economy, plays a pivotal role in this global network. Its immense population, vast manufacturing base and growing middle class have made it a key trade partner for many countries, including the U.S. For Illinois farmers, this relationship is particularly significant. The state’s rich farmlands produce a bounty of crops, many of which find their way to Chinese markets.
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Look Out Iowa! Cropland Auction Sets Fresh Record in North Dakota
As mortgage rates climb to 20-year highs, near 8%, current high-interest rates are eating away at the housing market. This year is currently on pace to see the fewest home sales since 2008. However, farmland sales aren't witnessing the same sticker shock. In North Dakota, Pifer's Auctioneers says it just set a new land sale record in the state.
According to a post on Facebook, on November 1, Pifer's Auctioneers hosted a live and online land auction. The farm featured 320 acres of highly-productive land in Pembina County, N.D. That's the very northeastern corner of the state in the Red River Valley. The auction house says the land sold for $17,500 per deeded acre to a family farm operation. It says that shattered the all-time high for North Dakota cropland. Roughly 30 bidders were on hand for the auction.
The Pifer team says that area is known to be tight where very few farms ever get exposed to the market. Another of the enticements comes from the crop rotations in that region. Farms typically grow potatoes, sugar beets, wheat, corn, barley and soybeans. The ability to produce sugar beets and potatoes on medium to heavier loam soil, without irrigation, was a strong draw.
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Terry Bradshaw Sells 744-Acre Ranch North of DFW
Terry Bradshaw, the NFL Hall of Famer and current FOX analyst, has sold his 744-acre ranch, which sits about an hour north of Dallas-Fort Worth. The ranch property sits just across the Red River, in Thackerville, Okla. It was listed at $22.5 million, but a final sale price was not disclosed.
The ranch, which overlooks the Red River, features an 8,600-square-foot luxury estate home, paved roads, and fishing lakes, along with a stable, an arena and other equine facilities and equipment.
Red River Equine, a horse breeding company owned by Chad and Tiffany Beus, bought the ranch, which is "being re-developed and marketed as a large-scale premiere breeding, training, and sales preparation facility," according to the release.
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Michigan House Votes to Restrict Local Permitting of Solar, Wind Farms
The Michigan House voted along party lines late Wednesday to give the state permitting authority over large-scale renewable energy projects, wresting control from local governments that are often hostile to them.
The legislation is a key part of a broader suite of energy reform bills passed by the Legislature that would dramatically alter how Michigan gets its energy, mandating utilities draw all their power from clean sources by 2040.
Under House Bills 5120-23, the Michigan Public Service Commission would have permitting authority over wind, solar and energy storage projects over 100-megawatts (350 acres for a project that generates 7 megawatts-per-acre) and wind projects over 100-megawatts (about 35 turbines), along with large energy storage projects.
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ASFMRA Government Relations Update
New House Speaker Agenda
Before becoming Speaker, Representative Johnson released a letter on Monday October 23 outlining a work schedule for the House if he were to become Speaker.
The letter lays out a broad appropriations strategy to finish FY 2024 appropriation bills and mentions work on a farm bill in December (see 2nd page) of this year. It is an ambitious schedule, likely to change dependent on Senate action. At this point few members expect action on a farm bill this calendar year (see Farm Bill Extension piece below). Sixty-one House Republicans sent a letter to the new Speaker urging action on the farm bill. The letter noted 92% of planted acres in the U.S. are in Republican represented districts.
Farm Bill Extension
Both Senate Agriculture Committee Chair Stabenow (D-MI) and Ranking Member Boozman (R-AR) have announced support for a one-year extension of the 2018 farm bill. Commodity programs, based on crop years, make a full year extension cleanest for farmers ability to plan and USDA’s ability to administer. An extension before January 1, 2024, avoids the “dairy cliff”, a reversion to 1930s price-based support programs for dairy and other commodities.
House Agriculture Committee Ranking Member David Scott (D-GA) late Friday last week issued a press statement urging his House colleagues to support a one-year extension of the 2018 farm bill. While House Agriculture Committee Chair Thompson (R-PA) has not issued any formal press statements, he has also indicated he doesn’t oppose a one-year extension, but he maintains he wants to complete a farm bill in less than a year.
So, there is consensus among the Congressional Agriculture leaders to seek a one-year extension. The current Continuing Resolution (CR) keeping the government open expires at Midnight on November 17th. It is widely anticipated that Congress will pass another CR, either into mid-December or January and this “must pass” bill is a perfect candidate to attach a farm bill extension. Look for a one-year extension later this month. Keep in mind crop insurance program authority is permanent law and requires no extension.
Progress Continues on FY 2024 Appropriation Bills
The Senate passed three FY 2024 Appropriation bills, packaged as a “minibus”, last week by a vote of 82-15. The package included Agriculture, Transportation and Veterans Affairs funding. The Senate bill funds the Risk Management Agency (RMA) Salaries and Expenses at $66.87 million for FY 2024 which is the same amount it received in FY 2023. The Senate report accompanying the bill also includes the following language which unfortunately is not binding on the agency:
Administrative and Operating Expenses. — The Committee encourages the RMA to provide an annual inflation adjustment to administrative and operating [A&O] reimbursements and to provide equitable relief for specialty crop policies in a manner similar to a previous adjustment that was initiated without renegotiation of the
Standard Reinsurance Agreement.
For its part, the House also passed the Interior and Legislative Branch FY 2024 funding bills last week. A vote on the Transportation bill was delayed and will likely occur this week along with a planned vote on the Financial Services funding bill. The House will likely begin deliberations this week on a Continuing Resolution to keep the government from shutting down on November 18.
White House Requests 2023 Crop Disaster Payments
The White House sent an emergency supplemental request for $56 billion to Congress. Included in the request is $2.8 billion for 2023 ad hoc crop disaster payments. The domestic emergency request is in addition to the $100 billion emergency supplemental request sent by the Biden Administration for international emergencies including supporting Ukraine and Israel war efforts.
USDA Announces Plan and Schedule for 2022 Ad Hoc Crop Disaster Payments
USDA announced its plan to pay crop year 2022 ad hoc crop disaster payments. Recall the funding for 2022 crop disaster payments was made available on December 29, 2022. USDA will use the Emergency Relief Program (ERP), again in two tracks. Track 1 will use crop insurance and NAP data to make payments. Track 2 is a revenue-based plan that will require additional record submission to the Farm Service Agency (FSA). FSA will be sending prefilled track 1 applications this week.
USDA Releases Carbon Market Assessment
USDA released A General Assessment of the Role of Agriculture and Forestry in the U.S. Carbon Markets, a comprehensive look at current market activity, barriers to participation, and opportunities to improve access to carbon markets for farmers and forest landowners. The report is the first of USDA’s deliverables under the Growing Climate Solutions Act (GCSA), which was signed into law on December 29, 2022, as part of the Consolidated Appropriations Act of 2023.
The report identifies a variety of barriers that have hindered the participation of agriculture in carbon markets. Farmers face limited returns on investment due to high transaction costs in carbon markets, including the costs of greenhouse gas quantification, verification, and reporting. Following release of the assessment, the next step in implementing the GCSA is for USDA to establish the Greenhouse Gas Technical Assistance Provider and Third-Party Verifier Program, which should facilitate better technical assistance to producers interested in participating in carbon markets.