(FarmdocDaily) Recent commodity price declines have led to increasing concerns that farmland prices could decline as a result of potential decreases in income to farmland. Corn prices, for example, have decreased from over $5.00 per bushel during the summer of 2013 to prices in the mid-$3.00 range during the summer of 2014 reflecting expectations of large yields. During the first half of 2014, farmland values appear to have stopped increasing rapidly, as they did from 2006 through 2013, with some reports of small decreases and softening demand. The purpose of this farmdoc daily article is to provide an analysis of capitalized values of current returns and examine implications for 2014 and beyond. The findings include that current forecasted income, which represents a decline from recent periods' income levels, is not likely to result in large farmland price decreases. However, capitalization rate increases, which may be commensurate with increases in general interest rates, do pose a larger risk factor. ...continue reading
(HuffingtonPost) As anyone who follows food and agriculture issues knows, much of the public discourse -- particularly around genetically modified organisms (GMOs) -- is highly polarized. The debates are often as personal and bitter as the extremes that characterize today's partisan politics.
For both personal and professional reasons, I'm among those saddened by the intensity of the conflict. Not only did I grow up on a family farm in Illinois, but 30 years ago I helped develop GMO crops. Yet far more important than my, or anybody's, individual reaction is this: The debate over GMOs has tended to sidetrack progress on the development of a common agenda to solving the global food security problem. ...continue reading
Double digit year-to-year increases in farmland values were reported in select regions of the Great Plains. The Tenth Federal District estimated that irrigated and nonirrigated crop land increased 6.3% and 6.9% respectively from the second quarter last year. Irrigated farmland in Kansas, Oklahoma, and areas of Colorado, New Mexico, and Wyoming all reported double digit increases.
Nonirrigated land in Oklahoma and areas of Colorado, New Mexico, and Wyoming also reported double digit increases. Nonirrigated land had not seen comparable increases over the past several quarters due to the drought across the district, but storms over the past few months have provided precipitation, easing drought conditions. ...continue reading
Ideal growing weather continues to support corn and soybean conditions as we move closer to harvest. Illinois and Iowa, the largest corn producing states, have the best conditioned corn in the U.S.
The highly acclaimed Pro Farmer Crop Tour commenced today, which will provide a ground level test to the expected bumper corn and soybean crops. The tour will span 30,000 miles before concluding in southern Minnesota and unveiling the true crop conditions. ...continue reading
Midwest farmland values reported year-over-year increases for the 19th consecutive quarter. The Seventh Federal District released their quarterly assessment of farmland values and credit conditions, reporting an average 3% year-to-year increase in “good” farmland district wide and a 2% increase from the first quarter. Midwest farmland values are expected to be stable to slightly higher in the second half of 2014 according to survey respondents.
Illinois farmland increased 3% from last year, the most across the district, while Iowa decreased 1%. Wisconsin farmland increased 6%, Illinois 3%, and Iowa 1% in the last three months. Larger increases in farmland values were muted to the sharp decline in crop prices late in the second quarter. After the planting delays drove prices up, ideal growing conditions and record setting crop production estimates caused prices to fall significantly. ...continue reading
Last Friday ended the USDA Agricultural Marketing Service’s 19th annual Farmers Market week. Over 8,000 farmers markets are listed nationally, up 3.6% from 2012. As more people become concerned about responsibly and locally raised meat and produce the number of farmers markets has exploded. A more recent trend has been the onset of community-supported agriculture (CSR) where members will pay a farmer up front for a share of his or her crop. Members normally receive a shipment of food on a weekly or monthly basis. As demand grows for fresh produce farmers will continue to find ways to get their fares to consumers.
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Wheat exports were increased by 25 million bushels for 2014/2015 in Tuesday’s World Agricultural Supply and Demand Estimates released by the USDA. The increase in exports was spurred by recent rains in the European grain belt that is expected to greatly damage their production this year. Continued fighting in the Ukraine has also led to speculations of a lower than expected amount of wheat in the global market this coming year.
A reduction in weekly corn sales was reported for the first time since the 2012/2013 Marketing year. Soybean sales declined moderately, and wheat sales fell below the ten week average for the first time this marketing year. Exports for soybeans and wheat both increased, while corn exports declined. ...continue reading
The potato has had a great run for most of the past five centuries. But these days, the humble spud has fallen on hard times.
A darling of American dinner tables since before the nation's founding, potatoes have lost favor in the U.S. for the past two decades. Consumers have shunned the starchy side dish in a race away from carbohydrates and toward greater convenience, two factors driving broad changes in how Americans eat. ...continue reading
(WorldEconomicForum) The United Nations has called drought the “world’s costliest natural disaster,” both financially, imposing an annual cost of $6-8 billion, and in human terms; since 1900, it has affected two billion people, leading to more than 11 million deaths. That is because so much of the world is vulnerable; currently affected areas include Australia, Sub-Saharan Africa, South Asia, North and South America and the Middle East.
Given that agriculture accounts for 70% of water consumption, on average, worldwide, it seems logical that this sector should be the focus of conservation measures. And, in fact, a proven technology exists that could go a long way toward reducing the impact of drought: genetic engineering (GE). ...continue reading
The USDA expects the 2014 corn crop to average a record 167.4 bushels per acre, although the yield estimate was below what analysts were expecting. Adjusting for corn's 2014/15 record production, the ending stocks-to-use ratio is now estimated at 13.5%, which is the highest in a decade.
Demand for U.S. corn this summer has picked up in the most unlikely place, ethanol. Low corn prices have resulted in attractive margins for U.S. dry mill ethanol plants, causing them to produce more corn based ethanol. Year to date domestic gasoline demand has picked up and thus demand for corn based ethanol has risen with it. In addition to increased demand at home, exports have picked up due to production constraints in large ethanol producing countries like Brazil.
The August WASDE is special in regards to data retrieval as the USDA switches from a weather input model to a survey based model. ...continue reading