Click here to download Land Facts Newsletter > Summer 2020

Click here to download Land Facts Newsletter >  2019 Summer

Across most of the Midwest, this year is kicking off with a heavy cloud cover, both literally and figuratively.  The past few weeks have been rather challenging for farmers with massive floods in the western part of the Corn Belt and persistent rainstorms in the eastern part.  This has delayed much of the pre-planting fieldwork that farmers typically like to have done by April 20^th each year. It’s not at a critical juncture yet, as once the fields do finally dry up the size and efficiency of modern equipment will allow farmers to get the seeds in the ground very quickly.  However, with more rain expected next week in the eastern Corn Belt some are wondering if ground conditions will be suitable by the end of the month.

Soft commodity prices are also creating some concern in the countryside.  New crop corn bids are approximately 20 cents lower than this time last year, while soybean bids have dropped nearly $1.50 per bushel, due primarily to the trade tariff war with China. In most years, delayed planting will often create a spring rally in corn prices but that hasn’t materialized, yet.  And soybean farmers hoping for an immediate price rally after the trade disagreement is finally resolved may be sadly disappointed.

While conditions down on the farm may not be ideal at the moment, there’s still plenty of time for the news to improve.  As my father often stated, to be a successful farmer you must be willing to accept and live with both risk and uncertainty.  Given what we’ve seen so far, 2019 is likely to offer a big dose of each.

To stay abreast of crop growing conditions in Illinois, click here > Illinois Crop Progress and Condition

To stay abreast of current commodity prices in Illinois, click here > GX_GR113

Fortunately, the USDA recently published a pamphlet (America’s Diverse Family Farms: 2018 Edition) that hopefully farmers and others in the industry can use to educate those that think they know about modern agriculture, but apparently don’t. Let’s start with the basics from this report… “USDA defines a farm as any place that produced and sold—or normally would have produced and sold—at least $1,000 of agricultural products during a given year”.  [Yes, if you grow ½ acre of sweet corn and sell it at the local farmer’s market, you are considered a rich, fat cat (at least by some).]   Here’s another tidbit… “Family farms of various types together accounted for 98 percent of farms and 87 percent of production in 2017.” [Hmm, so much for the idea that big corporations are the major producers in this country]. And, finally… “In 2017, net farm income for small farmers declined almost 40 percent from its peak in 2013, though it was only slightly below its 10-year average. Lower commodity prices worsened the OPM (Operating Profit Margin) of many midsize, large, and very large farms, especially those that produced field crops (e.g., corn, soybeans, wheat) or dairy.”  [Despite what many might think, farming hasn’t been all that profitable the past 5 years.]

It’s important to note that some farm operations are quite profitable and will continue to be so in the foreseeable future.  These businesses are typically both well capitalized and well managed, the keys for success in any industry.  They shouldn’t be ashamed of their achievements nor should they be chastised for it.

I think it’s important for anyone in agriculture to challenge the false statements being made about farmers on social media or other websites.  We should use the USDA publication mentioned above to present the facts on family farmers.  It’s apparent that the general public needs educated and if we don’t do it, then who will?

In this edition… Making Sense Of The News;  The Return Of The 1031 Investor; and, Farming In The Digital Age.

Click here to download Land Facts Newsletter >  2018 Summer

In 2017, the number of sales in the five states covered by these two lenders decreased by ~ 270 farms, or 7.5 % compared with 2016. While that doesn’t necessarily seem like a large number, what gets my attention is the decrease from 2012… 2,600 fewer farms or a 44% decline during this five year period!  Unfortunately, similar data is not available for the eastern Corn Belt though anecdotal evidence would suggest a similar decline. Yes, the number of buyers have decreased – we’ve gone from 4 or 5 aggressive bidders at each auction to 2 or 3.  But as long as there’s a limited selection of farms to choose from, you don’t need as big a pool of buyers.

I’m still somewhat convinced that this decrease in the land supply has been driven primarily by the low interest rate environment. For years, I worked with heirs and beneficiaries that would sell their farm when the estate was being settled versus holding on to the acreage. Course, that was when short term rates were at 5% and not 0.5%.  The fact that land was rapidly appreciating each year also helped. Will this trend change with interest rates slowly moving higher?  In all likelihood yes, but it may takes several rate increases before we see a noticeable difference.

• Beyond Commodity Prices and Yields
• The Trump Administration and Its Impact on Agriculture

Click here to download Land Facts Newsletter: 2017 Summer

If you’re like me, you’re probably wondering how the two results can be so different (note – the Illinois and Iowa USDA numbers were also just as confounding as what was reported in Indiana). The groups do have slightly different methods for collecting the data, but all the survey recipients are assumed to have some knowledge of price trends in their area. I hate to sound cynical, but if the bean-counters in Washington can’t be more accurate with their figures, then they should consider saving the taxpayer’s money and stop publishing their report.

Democratic Plank: Investing in Rural America

We will work to build a stronger rural and agricultural economy. Democrats will increase funding to support the next generation of farmers and ranchers, with particular attention given to promoting environmentally sustainable agricultural practices. We will encourage programs to protect and enhance family farms, a cherished way of life for millions of Americans. We will expand local food markets and regional food systems and provide a focused safety net to assist family operations that need support during challenging times. And we will promote clean energy leadership and collaborative stewardship of our natural resources, while expanding opportunities in rural communities across America. While the EPA’s new Agricultural Worker Protection Standard goes a long way to protect farm workers from harmful pesticides and herbicides, we recognize there is a lot more we can do. The Democratic Party supports stronger agricultural worker protections including regulation of work hours, elimination of child labor, ensuring adequate housing for migrant workers, and sanitary facilities in the field.

Democrats will spur investment to power the rural economy. We support strengthening rural water, sewer, and broadband infrastructure to make rural businesses more competitive. We will expand access to equity capital for businesses and expand the New Markets Tax Credit to better serve rural small businesses. We will promote collaborative stewardship of our natural resources, while developing clean fuels that will grow our economy, lower our energy bills, combat climate change, and make America the clean energy superpower of the 21st century. We will provide assistance to producers who conserve and improve natural resources on their farms and double loan guarantees that support the bio-based economy’s dynamic growth.

The Republican Agricultural Platform

Agricultural production and exports are central to the Republican agenda for jobs, growth, expanded trade, and prosperity. Because our farmers and ranchers care for the land, the United States does not depend on foreign imports for sustenance. Americans spend a smaller percentage of their income on food than any other nation. On average, one American farm produces enough food to feed 155 people. No other nation has been as generous with food aid to the needy. We have good reason to celebrate our domestic security in food.

Under a Republican president, America’s trade negotiators will insist that our global trading partners adhere to science-based standards with regard to food and health regulations.

We must also ensure that domestic policies do not compromise our global competitiveness through overregulation and undue interference in the marketplace. There is growing recognition that federal dairy policies, crafted during the Great Depression, are increasingly an impediment to the ability of our dairy producers to meet the expected doubling in global demand coming by 2030.

We oppose the mandatory labeling of genetically modified food, which has proven to be safe, healthy, and a literal life-saver for millions in the developing world.

Farmers and ranchers are among this country’s leading conservationists. Modern farm practices and technologies, supported by programs from the Department of Agriculture, have led to reduced erosion, improved water and air quality, increased wildlife habitat, all the while maintaining improved agricultural yields. This stewardship of the land benefits everyone, and we remain committed to conservation policies based on the preservation, not the restriction, of working lands. For this reason, ranching on public lands must be fostered, developed, and encouraged. This includes providing for an abundant water supply for America’s farmers, ranchers, and their communities.

Farming and ranching remain high-risk endeavors, and they cannot be isolated from market forces. No segment of agriculture can expect treatment so favorable that it seriously disadvantages workers in other trades. Federal programs to assist farmers in managing risk must be as cost-effective as they are functional, offering tools that can improve producers’ ability to operate when times are tough while remaining affordable to the taxpayers.

Republicans are dedicated to leading this country forward, which includes getting things done on time, including the next Farm Bill.

The Democrats play politics with farm security. Much of the Democrats’ delay had nothing to do with the vital role of American agriculture. It concerned their efforts to expand welfare through the Supplemental Nutrition Assistance Program (SNAP), which now comprises more than 70 percent of all farm bill spending. During the last eight years of a Democratic Administration, nearly all the work requirements for able-bodied adults, instituted by our landmark welfare reform of 1996, have been removed. We will restore those provisions and, to correct a mistake made when the Food Stamp program was first created in 1964, separate the administration of SNAP from the Department of Agriculture.