Location and quality of land continue to be the main drivers of pricing for individual tracts. The stability of this market is maintained by a lower supply of land for sale, contrasted with a continued demand for quality properties. Farmers National Company statistics show the volume of properties for sale is down 40% over the past six months, as compared to the past two years.
A long term trend cannot be determined by two year periods prior or post; nevertheless, adjustments in profit levels appear to be settling in. Multi-year, high profits cause margin compression as fixed and variable costs increase. This is just another example of the old saying, “high profits cure high profits.”...More
In response to the latest WTO ruling, legislation has now been passed by the U.S. House of Representatives that would eliminate the COOL requirements for beef, pork, and chicken muscle and ground products; however, the U.S. Senate has yet to act on the legislation. There is considerable bi-partisan support for this legislation in Congress, especially from states that could be facing significant economic impacts from trade retaliation by Canada and Mexico....More
Since Syngenta chose to take Monsanto’s private buyout offer public, Monsanto now counters by talking to shareholders and the farm media.
I recently spoke with Mike Frank, Monsanto’s global operations lead, who stated their case for the value of this Syngenta buyout....More
In the 5 ag stories to read this week, experts remind you to be on the lookout for soybean aphids, and offer the best options for sidedressing nitrogen this summer. Read and watch testimony from the latest GMO labeling hearing, and check out a calendar for when to scout different corn pests. Finally, enjoy a list of ways you know you grew up in the country.
It is imperative in today’s world of trade risk to build up extra liquidity or working capital reserves. How much is enough depends on debt servicing requirements, and marketing and risk management plans including crop insurance....More
Even though the number of avian flu cases has waned in recent weeks, the economic impacts of the worst bird flu outbreak in U.S. history are not likely to disappear any time soon. The first turkey producers in central Minnesota that broke with the virus in early March have started to re-populate their barns, slightly over 90 days after their flocks were depopulated....More
Lower commodity prices are now projected for the foreseeable future. Those price levels coupled with high costs lead to projections of low or negative cash flows for the next several years. These low return levels will cause negative cash flows on many farms. Farmers then may choose to use working capital in meeting these cash shortfalls, leading to reductions in working capital....More
The number one risk facing agriculture is international trade, because many facets of the agriculture industry are internationally interconnected. The slowdown of emerging economies is in full gear, and the results are being observed in the re-entrenchment of prices for commodities such as grains, oil, steel and copper. The slowdown is targeted toward the flyover states, i.e. the agricultural and rural regions in the U.S....More
NCGA and ASA are concerned that a pending announcement from the U.N. World Health Organization’s International Agency for Research on Cancer will only lead to more confusion and concern about two widely-used herbicides that have been mainstays for farmers for decades. These two substances play an especially important role in corn and soybean farming as they allow us to manage weeds in a sustainable way....More
Storm clouds are building as American agriculture, specifically the grain sector, is entering phase one of the post-commodity super cycle downturn. One of the first signs of a downturn is buildup of machinery and equipment inventory on dealership lots. Another: access to short-term operating credit will become an issue as some producers fail to meet existing loan covenants....More
Farmers are increasingly scrutinized and being frowned upon by consumers for their use of GMO seed. It's sometimes hard to respond to those negative comments. Here are some resources, from Facebook pages and websites to informational stories we have written, to share with people who may not understand the science and technology behind GMOs, not to mention the benefits!
“Agriculture is the story of productivity: doing old things better,” says Mark Drabenstott, a global economist, Federal Reserve 25-year veteran. “The future belongs to those who innovate, doing better things. Commodity markets require even more risk management in an ever-riskier environment."...More
If you look back five years, what would you have said then compared to where we are today? Let’s dial the time machine back to 2010 and examine some of the hits and misses in economic projections....More
I gave a recent conference attendee an assignment to complete during his nearly two hour drive home that evening. His assignment was to come up with 10 perspectives from my speech and give them to mom to turn in when she returned the next morning. And he did. From moderation in family living cost to knowing your bottom line, that young college student picked up my tips for success....More
Heather Oden says today’s female generation can benefit from being part of what has been a predominantly male industry. “Today’s production agriculture creates opportunities for women that we did not have before. Sometimes I stand out in a meeting because I am a female. That gives me a platform to educate other farmers about my role on the farm."...More
Amid an ongoing worldwide slump in grain prices, Eighth District agricultural bankers reported a continued decline in farm income during the first quarter of 2015 compared with the previous year, according to latest Agricultural Finance Monitor. The average value of quality farmland also declined, with this trend expected to continue during the second quarter....More
In late March, USDA announced some proposed revisions to the actively engaged rules that are designed to further clarify some of the definitions and rules surrounding the requirement for management in a farm operation. This could potentially restrict certain individuals that currently qualify for farm program payments from potentially having future farm program payment eligibility beginning with the 2016 crop year....More
Last week we talked about cash flow, sensitivity analyses and liquidity and how those matter when working with your ag lender. This week, lets go over the importance of a business plan, communications and productive assets....More
Farmer and ag ambassador Quint Pottinger explains the three legs of farming to consumers: environmental sustainability, economic sustainability and social sustainability (i.e., public support). “If we can’t convey a positive image of agriculture and the value it brings every family, then we run the risk of negative legislation that constricts our freedom to operate," he says....More
In the 5 ag stories to read this week, get some tips for managing late-planted corn and learn about a bollworm that could make its way to the U.S. Get ag secretary Vilsack's take on the latest G-20 commitment to food security and download a mobile app for identifying weeds. Finally, read commentary from a farmer who's sick of the bashing and finger-pointing.
Sterling Liddell, vice president, food and agribusiness research, Rabo AgriFinance, talks about what's driving land values. There are four important factors: commodity prices, input costs, margins and interest rates....More
During a recent panel, a participant asked CEOs from lending associations the following: Based on your experience, what are five points of wisdom that can increase our chances of working more effectively with our own lender and being successful? Here are their answers....More
In the 5 ag stories to read this week, see the value in pre-emergence herbicide control of Palmer Amaranth, and learn the value of nitrogen available in spring-applied manure. Read a letter to congress asking for a science-based food labeling standard and get a list of mobile apps to help you on the farm this spring. Finally, enjoy streaming the movie Farmland on Netflix!
We will continue to strive, as an information provider, to present you with good examples that help you make the most of your 40 chances. As Howard wrote in his book, “You’ve learned from your mistakes, but I’d guess that none of you feel you can afford to take a single year left on your string for granted.” We wholeheartedly agree....More