Recently I had the privilege of sharing a panel with Dr. Barry Flinchbaugh, Kansas State University, and John Blanchfield, head of the American Bankers Association Agricultural division.
Dr. Flinchbaugh made an interesting point that the cut in agricultural program payments could have a significant influence on land values and cash income in some states. For example, we had participants from North and South Dakota, Minnesota and Tennessee. Program payments make up 47% of net farm income in North Dakota, 35% in South Dakota, 23% in Minnesota and only 5% in Tennessee.
There were concerns amongst panel members that five factors would influence the next Farm Bill. Those included:
- Recent WTO rulings
- Federal deficits increasing to dangerous levels
- Another recession
- Political positions of key congressmen
The next Farm Bill selling points will be in three areas:
- Energy sources from American agricultural production, i.e. ethanol, biodiesel, wind power
- Conservation and environmental stewardship for all size farms
- Homeland security i.e. traceback of production and distribution, concentration and food security
When asked about the Rabobank purchase of Farm Credit Services of America, John Blanchfield indicated he thought it would pass stockholders and FCA, while Flinchbaugh was not as optimistic. However, it was on the minds of everyone in the room.
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Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups.
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