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ASFMRA Ag News - May 7, 2024

By ASFMRA Press posted 05-07-2024 09:52 AM


Monastery Ranch Lists for $150 Million

One of the largest tracts of largely undeveloped land in Pitkin County, Colo., recently hit the market for $150 million. St. Benedict’s Monastery is for sale, nearly a year after the monks announced its impending closure.

“We’re really looking for a conservation buyer, or buyers, that understands the nuances and the pristine nature of (the property),” said the listing agent Ken Mirr of Mirr Ranch Group. “We don’t see this as another resort or a large-scale, high-density development; we see quite the opposite.”

The monks first bought the land in 1956. Since then, the approximate 3,700 acres and 18,000 square feet of space across a few structures on the land have been used for housing the brothers, worship space, a book store, cabins for monastic retreats, and old homestead facilities like a barn. 

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Agriculture and Biofuel Industries React to New Rules for Sustainable Aviation Fuel Tax Credit

This afternoon the department released an updated version of the GREET model that can be used to demonstrate the carbon intensity (CI) of sustainable aviation fuel (SAF) under the 40B SAF tax credit.

Qualifying SAF must demonstrate a 50% CI reduction to earn $1.25 a gallon. For every percentage point higher the SAF can achieve through a qualify greenhouse gas model, like GREET, the producer can earn an additional penny, up to $1.75.

SAF can be produced from a variety of feedstocks, including ethanol and soybean oil. Included in the announcement is a pilot program for accounting for sustainable farming practices in the CI calculation for those two feedstocks.

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How Do Wind, Solar, Renewable Energy Effect Land Values?

Since the signing of the Paris Agreement and its Net Zero by 2050 iniative, the ripple effects are still being ironed out as the demand for renewable energy increases. 

With expanding renewable energy installations such as wind and solar, The Top Producer Podcast host Paul Neiffer asked David Muth of Peoples Company Capital Markets, the Investment platform for Peoples Company, how those land uses change long term land values.

“We're really seeing emerging revenue streams from our land base–outside of the ag production,” he says. “We’re trying to get our arms wrapped around the asset management strategy and really get this well positioned. So over the next 10 or 20 years, we’re expanding revenue right and capturing that correctly.” 

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Farmland Prices Start to Cool, Real Estate Expert Says

The price of farmland in recent years has been quite the topic of conversation in rural America after sizable jumps in value. However, the recent rise in prices may be starting to slow in parts of farm country.

While demand is still strong for the highest-quality farmland, prices appear to have plateaued for lesser-quality land.

“Resilient” is how Paul Shadegg, senior vice president of real estate options for Farmers National Company in Omaha, describes the current market. It faces a lot of headwinds.

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Is No-Till Farming More Profitable?

No-till may not produce a standout yield in corn and soybeans, but the tillage system wins when it comes to the net bottom line.

Decades of research at the University of Missouri Graves-Chapple Extension and Education Center in northwestern Missouri examined the effect of different tillage systems on corn and soybean yields, along with profitability.

Researchers compared four common tillage systems: fall and spring disk, spring disk, no-till, and fall chisel and spring disk. No-till’s advantage lies in lower labor and equipment costs, making it the most profitable option over time.

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ASFMRA Government Relations Update

House Agriculture Committee Chair Announces Farm Bill Markup Date

House Agriculture Committee Chairman G.T. Thompson (R-PA) announced last week that the Committee will markup a farm bill at the full Committee level on May 23rd. Right now, the House is scheduled to be in session May 23 and 24 before starting a weeklong district work period for Memorial Day.

The Chairman also released a high level summary of the forthcoming “Chairman’s Mark” which he intends to use as the starting point for the markup. Improvements to the Commodity Title (Title I) include:

  • Increases support for the Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) programs to account for persistent inflation and rising costs of production. 
  • Provides authority to expand base acres to include producers who currently cannot participate in ARC/PLC. 
  • Modernizes marketing loans and sugar policy. 
  • Bolsters dairy programs to continue providing vital assistance. 
  • Enhances standing disaster programs and expands eligibility for assistance.

The summary, by title, identifies four areas of improvement for crop insurance (Title XI).

  • Expands premium assistance for beginning and veteran farmers. 
  • Directs research and development of new policies and establishes an advisory committee for more robust engagement with specialty crop producers. 
  • Enhances certain coverage options to reduce the need for unbudgeted ad hoc disaster assistance. 
  • Bolsters the private sector delivery system. 

Over the next several weeks, Chairman Thompson plans to release more detail about each title along with legislative language at least 5 days before the markup. The last bullet, “bolstering private sector delivery”, includes some support for additional Administrative and Operating (A&O) payments, most likely the reestablishment of an inflation factor applied to the A&O cap.

The House markup is looking to be partisan. House Agriculture Committee Ranking Member David Scott (D-GA) released the following statement describing his opposition to the Chairman’s approach shortly after the release of the high level summary.

Senate Chair Releases Farm Bill Detail

Senate Agriculture Committee Chair Debbie Stabenow (D-MI) released a section-by-section summary of the Rural Prosperity and Food Security Act, her farm bill proposal. In a press release she states the bill reflects bipartisan priorities (although no Republican supported the bill) and is an effort to restart negotiations with her Republican colleagues to finish a farm bill this year. The section-by-section runs 94 pages. Proposals in the commodity title while increasing effective reference prices would limit PLC payments to a 20% band of the effective reference price, making it more like ARC. It would also lower the AGI test to $700,000 except for specialty crop and high value crop producers.

Crop insurance, Title XI, starts on page 74 of the section-by-section summary and runs through page 81. There are numerous provisions that appear to be problematic for the crop insurance industry, for example allowing the government to underwrite policies (section 11301) and reducing A&O payments for area plans of coverage (section 11302). Without specific language, it is difficult to determine the intent of some of the provisions. Notably, the entire bill, including the crop insurance section, has not been scored by the Congressional Budget Office (CBO), so its overall cost is unknown.

FPAC FY 2025 Budget Reviewed

Farm Production and Conservation (FPAC) Undersecretary Bonnie and Administrators Bunger, Crosby, and Ducheneaux (RMA, NRCS and FSA respectively) appeared before the House Agriculture Appropriations Subcommittee last week to testify about the mission area’s FY 2025 budget request. Undersecretary Bonnie provided the oral testimony while the three Administrators attended to answer questions. The bulk of the questions were about FSA programs and disaster payments.

National Grain and Feed Association Urges USDA to Continue NASS Reports

The National Grain and Feed Association (NGFA) recently sent a letter to Secretary Vilsack expressing concern over USDA’s decision to discontinue certain reports, including county estimates for crops and livestock. NGFA members use the county estimates to build supply and demand estimates for their businesses, which help determine commodity sourcing plans to keep their facilities operational.  NGFA offered to  engage with USDA to find a solution that preserves the county estimates while being fiscally responsible.