Wednesday January 13 Ag News

Farm Credit Services of America Reports Overall Decline in Cropland Values for Second Year

While cropland values generally held steady or showed slight declines in the last half of 2015, farmland prices overall ended lower for the year in Iowa, eastern Kansas, Nebraska, South Dakota and Wyoming. This marks the second consecutive year that lower commodity prices have put downward pressure on farmland values.

Farm Credit Services of America (FCSAmerica) and Frontier Farm Credit compile thousands of farm real estate transactions and monitor 71 benchmark farms twice a year to provide the most comprehensive data on farmland values in the five-state region. The most recent update to the long-running farmland study is based on data from July 1, 2015, through December 31, 2015.

The significant decline in farmland prices anticipated by some forecasters since the market’s 2013 peak has not fully developed, with the fall in commodity prices outpacing reductions to farmland values. But the impact of lower profit margins is reflected in adjustments to the market for both cropland and cash rental rates.

“There is a heightened attention by producers to their cash flows and how to position their cost of production at a level to align with what appears to be corn prices in the $3.25 to $4.25 range for the foreseeable future, barring a drought or some other unexpected demand or supply-side event,” said Mark Jensen, senior vice president and chief risk officer for FCSAmerica. Fortunately, many farmers are in a strong financial position resulting from previous record profit years.”

The range of decline in cropland values is wide. Some regional areas have experienced little to no change, while others have seen farmland prices drop 20 to 30 percent. Jensen cautions that average values can be somewhat misleading.

“Specific regional influences, such as the quality of the cropland and local interest, can play a big part in the final sale price,” he said.

Below is a state-by-state snapshot of farmland activity through the end of 2015:

Nebraska – Average benchmark values held steady in the last half of 2015 and declined 2.4 percent for the year. Five of 18 farms increased in value, while three showed no change. The farms that decreased in value declined an average of 4.2 percent.

Iowa – The average price of $8,682 an acre in the fourth quarter of 2015 was comparable to values in the previous year, but still 14 percent below peak 2013 prices. The average quality of purchased land also improved during 2015, indicating the uptick in per-acre price was driven more by quality than the market. The highest dollar per-acre sale during the fourth quarter was $18,100. However, only 18 percent of all fourth quarter sales exceeded $10,000 per acre. This was down from 26 percent in 2014.

South Dakota – Prices for unimproved cropland rose in the fourth quarter of 2015, finishing the year at an average per-acre price of $5,500, second only to the 2013 record high of roughly $6,100 an acre. The number of sales in 2015 declined 28 percent compared to 2014.

Eastern Kansas – Cropland values dipped during much of the year, but rebounded to levels comparable to the fourth quarter of 2014. The average per-acre price in the eastern part of Kansas was just shy of $5,000 at the close of 2015.

Wyoming – Completed sales were down 52 percent compared to 2014, making it difficult to identify trends from a small and diverse base of transactions. Sales that did occur, however, were for an average per-acre price of $1,000 in the fourth quarter of 2015, down from the $1,400 average that held steady during the previous four quarters. 



House Passes Senate Companion to Smith’s Resolution to Reject WOTUS

Congressman Adrian Smith (R-NE) released the following statement after the House passed S.J. Res. 22, the Senate companion to Smith’s resolution to disapprove the Environmental Protection Agency’s (EPA’s) Waters of the U.S. rule, known as WOTUS.  This legislation will now go to the President’s desk.

“Today’s bipartisan vote to kill the EPA’s WOTUS rule sends a strong message to President Obama and his administration about Americans’ opposition to this abuse of executive power,” Smith said.  “When the Obama administration pushed forward with WOTUS in defiance of a court-ordered stay, I introduced this resolution of disapproval in the House on behalf of all farmers, land owners, and local officials frustrated by the administration’s refusal to acknowledge their concerns.  Following the President’s comments in his State of the Union address about the need to cut red tape, I hope he will listen to the American people and do away with this dangerous rule which exceeds the EPA’s statutory authority."

Smith introduced H.J. Res. 59, the House resolution to disapprove WOTUS under the Congressional Review Act, in July 2015.  The Congressional Review Act provides for an expedited process for Congress to overturn executive rulemaking, including expedited Senate consideration of legislation to block newly finalized rules.



Statement by Steve Nelson, on Behalf of Common Sense Nebraska Coalition, Regarding House Action Disapproving “Waters of the U.S.” Rule

“We greatly appreciate the action taken today by the U.S. House of Representatives to demonstrate their disapproval of the “Waters of the U.S.” Rule finalized by the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps).

“This rule significantly expands the scope of the ‘navigable water’ subject to federal Clean Water Act jurisdiction, meaning greater permitting requirements for landowners and greater exposure for legal liability for those individuals as well. The “Waters” rule infringes on individuals’ basic rights to put their private property into productive use, which is why so many different public and private interests from across Nebraska have come together in opposition.”

“Not only has a federal district court in North Dakota ruled against the measure, but the U.S. Court of Appeals for the Sixth Circuit has granted a nationwide stay of the rule pointing to many troubling aspects of the regulation. Furthermore, The U.S. General Accountability Office (GAO) recently issued an opinion clarifying that EPA unlawfully manipulated the rulemaking process through an unprecedented marketing campaign designed to generate public support for the proposal.”

“In short, this rule is bad for Nebraskans and we thank Congressman Adrian Smith, not only for his vote in support, but for introducing the House version of the disapproval resolution. We also appreciate the other members of the Nebraska delegation who have pushed back against this regulatory overreach.”

Common Sense Nebraska is a diverse, Nebraska-based coalition consisting of organizations and entities that have united in response to the EPA’s “Waters of the U.S.” Rule; a regulatory proposal that would harm both rural and urban Nebraskans through expansion of the EPA’s powers and authorities under the federal Clean Water Act. The coalition’s purpose is to build awareness and understanding of the EPA proposal and the impacts it would have to Nebraskans. For more information visit Common Sense Nebraska on Facebook.

Common Sense Nebraska Coalition members include:
AKSARBEN Club Managers Association
Association of General Contractors - NE Chapter
Farm Credit Services of America
Iowa-Nebraska Equipment Dealers Association
National Federation of Independent Businesses/Nebraska
Nebraska Agribusiness Association
Nebraska Association of County Officials
Nebraska Association of Resource Districts
Nebraska Bankers Association
Nebraska Cattlemen
Nebraska Chamber of Commerce and Industry
Nebraska Cooperative Council
Nebraska Corn Board
Nebraska Corn Growers Association
Nebraska Farm Bureau Federation
Nebraska Golf Course Superintendents Association
Nebraska Grain and Feed Association
Nebraska Grain Sorghum Association
Nebraska Grain Sorghum Board
Nebraska Pork Producers Association
Nebraska Poultry Industries
Nebraska Rural Electric Association
Nebraska Soybean Association
Nebraska State Dairy Association
Nebraska State Home Builders Association
Nebraska State Irrigation Association
Nebraska Water Resources Association
Nebraska Wheat Board
Nebraska Wheat Growers Association
Nemaha Natural Resources District
Pawnee County Rural Water District #1



EXPERTS DISCUSS INTERNATIONAL TRADE DURING HEUERMANN LECTURE

    Clayton Yeutter, former U.S. trade representative and U.S. secretary of agriculture, and Darci Vetter, chief agricultural negotiator for the Office of the United States Trade Representative, talked about the history of international trade and opportunities in the current U.S. trade agenda during a Heuermann Lecture panel discussion Jan. 12 at Nebraska Innovation Campus.

    Yeutter, a world-renowned trade expert who served four U.S. presidents, outlined the history of international trade that began following World War II and for a significant amount of time did not involve agriculture. It wasn't until Yeutter began working with the Nixon administration that agriculture became a part of trade agendas in foreign countries. He continued these efforts over four decades in the government and private sector, having an impact on economies worldwide.

    "Clayton helped set the table for the work that I do today, and formed the foundation that guides the way we all negotiate trade," Vetter said.

    Vetter has used that foundation to maneuver through negotiating formulas with two different sets of countries through the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership.

    The Transatlantic Trade and Investment Partnership is an ambitious, comprehensive and high-standard trade and investment agreement being negotiated between the United States and the European Union. Vetter admitted that negotiations on this agreement have been slow going because of the EU's high tariffs on agriculture, high sanitary regulations and slow approval system of products involving biotechnology.

    The other agreement presents tremendous opportunity for the United States. Vetter said the Trans-Pacific Partnership is important because it creates the highest standards ever put together in a trade agreement and creates opportunity to influence those standards with those who would like to do business in the region. There are 12 countries involved in the agreement, with others eager to join once it is signed.

    Yeutter said the United States needs to take advantage of the opportunities that the Trans-Pacific Partnership provides, such as trade with Japan.

    "From the standpoint of agriculture, if you don't have Japan, you don't have much," Yeutter said.

    Japan has historically been resistant to bring products to the trading table. However, now that Japan has joined the Trans-Pacific Partnership, new products such as their culturally valued rice could be available.

    "The allure of these 12 countries and the depth of commitment they are willing to make to each other has allowed Japan to say that every product, without exception, is on the table," Vetter said.

    One of the obstacles Vetter will face in moving negotiations forward with the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership is that she's working during a presidential election year. With the Trans-Pacific Partnership, Vetter said it's important to talk about what the agreement means so people understand that it's not a difficult decision.

    "Agriculture is a place where you can run the numbers and show that there's a huge opportunity here," Vetter said.

    Yeutter and Vetter reinforced that trade is not a political issue and affects everyone from Nebraskans to economies worldwide.

    "One of the reasons that I love to work on trade is because it is bipartisan," Vetter said. "The benefits accrue very broadly for the whole population but it's really up to you to tell the story about what trade means for your pockets and how you spend that money in your community."

    Heuermann Lectures in the Institute of Agriculture and Natural Resources at UNL are possible through a gift from B. Keith and Norma Heuermann of Phillips. The Heuermanns are longtime university supporters with a strong commitment to Nebraska's production agriculture, natural resources, rural areas and people. Lectures stream live at http://heuermannlectures.unl.edu and are archived at that site soon afterward. They also air on NET2 World at a later date.



DAP, Anhydrous Lead Fertilizer Prices Lower

Average retail fertilizer prices kicked off the new year moving in the same direction they were headed at the end of last year: down. For a second week in a row, fertilizer prices were lower the first week of January 2016, with some prices down significantly, according to fertilizer retailers surveyed by DTN.

All eight of the major fertilizers were lower compared to a month earlier, with half of the fertilizers down by some significance.

As was the case the previous week, DAP was down the most -- by 7% compared to last month. The phosphorus fertilizer had an average price of $495 per ton.

Also down 7% compared to the previous month was anhydrous. The nitrogen fertilizer had average price of $582 per ton.

Both MAP and potash are 6% lower compared to a month earlier. MAP had an average price of $521/ton while potash was at $392/ton.

Both potash and anhydrous were down 6% compared to last month. Potash had an average price of $398/ton and anhydrous at $590/ton.

The remaining four fertilizers had slight declines compared to last month. Urea had an average price of $381/ton, 10-34-0 $572/ton, UAN28 $273/ton and UAN32 $316/ton.

On a price per pound of nitrogen basis, the average urea price was at $0.41/lb.N, anhydrous $0.35/lb.N, UAN28 $0.49/lb.N and UAN32 $0.49/lb.N.

With retail fertilizer moving lower in recent months, all fertilizers are lower compared to a year earlier. All but one fertilizer is now double-digits lower. The only fertilizer not down much is 10-34-0, which is down 1%.

MAP is now 12% lower, both DAP and UAN32 are 13% less expensive and UAN28 is 16% lower from a year previous. Both anhydrous and urea are 18% lower and potash is now 19% less expensive compared to a year earlier.



USDA Pesticide Data Program Report Confirms Food Safety

The U.S. Department of Agriculture (USDA) has confirmed again in its annual report that American consumers can focus on the nutritional benefits of conventional and organic produce without concern for pesticide residues. Over 99 percent of fresh and processed food available to consumers tested below allowable pesticide residue levels, as detailed in the 24th Pesticide Data Program (PDP) Annual Report released on January 11, 2016 by the USDA Agricultural Marketing Service (AMS). Only .36 percent of the products sampled through the PDP had residues above the U.S. Environmental Protection Agency (EPA) established tolerances, giving consumers plentiful options to meet their daily nutritional needs.

“Today’s consumers can choose from food produced with a variety of farming methods and necessary crop protection strategies and be confident that it will sustain and enrich their families’ lives,” stated Jay Vroom, president and CEO of CropLife America (CLA). “Across the nation, our growers continue to use the most advanced crop protection technology available to target specific crop threats. From precision agriculture to integrated pest management, farmers in the heartland, the plains, coastal areas and everywhere in between are pushing forward with the best ways to produce food for their communities and for the country.”

PDP researchers tested a total of 10,619 samples of fresh and processed fruit and vegetables (8,582 samples), oats (314 samples), rice (314 samples), infant formula (1,055 samples), and salmon (354 samples). To ensure that the samples were representative of the U.S., researchers collected data in a variety of states throughout different times of the year. The findings support the Dietary Guidelines for Americans 2015-2020, recently released by USDA and the U.S. Department of Health, which encourage consumers to eat more fruits and vegetables.

“With rapid advancements in computing technology, the space for developing new ways to fight agricultural threats is increasing exponentially,” stated Dr. Janet E. Collins, senior vice president of science and regulatory affairs at CLA. “Consumers have a number of options at the grocery store, thanks in large part to the work of the scientific community involved in research and development, the companies that are manufacturing products, and America’s farmers and ranchers. The 2014 PDP report demonstrates again that, with the sound science-based regulation of pesticides and commitment from the industry, farmers and other stakeholders, we can reach toward making sure that every American, no matter their wallet size or geographic location, can access healthy food.”

A 2012 report from CLA demonstrates that crop protection has made healthy food more financially accessible to the American consumer, providing a 47.92 percent savings in overall grocery bills for a family of four in the U.S.1 In addition, increased agricultural production, due to advanced pesticides, has created an additional 1,040,661 jobs generating more than $33 billion in wages—all while decreasing the need for tillage operations, thereby reducing fossil fuel use by 558 million gallons per year.

Recent reports from the United Nations also show that an increasing number of people worldwide have gained access to healthy food. Over the past 25 years, the number of people worldwide who are hungry has declined from one billion to about 795 million, or about one person out of nine—which means that 2 billion people have avoided a “likely state of hunger” given the global population increase of 1.9 billion people since 1990-92.2 Multiple factors have contributed to the decrease in global hunger, including the integration of family farmers and small holders in rural areas into well-functioning markets for food, inputs and labor.

The PDP was established in 1991 for the purpose of collecting data on pesticide residues found in food. Information collected by the PDP is sent to the EPA to help the agency conduct important dietary risk assessments. The USDA also uses this data in the development of integrated pest management objectives. Since the PDP program was initiated, 109 different commodities have undergone testing. A complete version of the 2014 Annual Summary is available at www.ams.usda.gov/pdp.



NIAA Annual Conference Focuses on Biosecurity

Animal disease epidemics are a significant concern to the animal agriculture industry. The National Institute for Animal Agriculture will facilitate a discussion on this crucial topic, at their next Annual Conference, April 4-7, 2016 at the Downtown Marriott in Kansas City, Mo.

The biosecurity emphasis of the Conference, themed “From Farm to Table – Food System Biosecurity for Animal Agriculture” concentrates on identifying ricks, challenges and solutions and ways producers can be proactive in protecting their animals from illness.

“As an industry, we have not had this discussion together before,” says Dr. Karen Jordan, DVM, Planning Committee Co-Chair for NIAA’s Annual Conference.  “Today there are more new ways for diseases to be communicated throughout a species than ever before.”

Jordan, who is also a dairy farmer and represents Dairy Farmers of America, points out that all vitamins and minerals added to animal feeds are imported from outside the United States, mainly from China, which could place American animal agriculture at risk.

“We’re really putting industry on notice that we expect biosecurity plans to be in place,” Dr. T.J. Myers, associate deputy administrator for Veterinary Services in the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (VS USAPHIS) noted in a recently released Journal of American Veterinary Medicine Association article. Owners of farms affected by disease outbreaks, including the 2015 outbreak of the highly pathogenic avian influenza, will need to certify they are taking steps to prevent similar incursions.

Plenary session speakers at the Conference will look at biosecurity from the federal and regulatory standpoint, and at the economic and human impact of disease and prevention.  Speakers on this imperative and timely topic include industry experts, regulatory agency authorities, academic specialists and animal agriculture professionals who deal daily with the issues.

The NIAA Annual Conference will be April 4-7, 2016 in Kansas City, Mo. at the Downtown Marriott. For more information, visit animalagriculture.org or contact the NIAA by calling 719-538-8843 or emailing niaa@animalagriculture.org.



AGree Calls to Action Presidential Candidates

The right food and agricultural policies can improve the health of America’s families, economy, farms and the environment, as outlined in recommendations AGree is presenting to presidential candidates. AGree’s Call to Action provides core elements in a strategy for elevating food and agriculture as a national priority.

“Many people don’t realize the degree to which food and agricultural policies shape our nation,” said Dan Glickman, AGree co-chair and former U.S. Secretary of Agriculture. “Farmers and ranchers and the food and agriculture supply chain from ‘farm to fork’ contribute roughly 5 percent of the gross domestic product (GDP) and employ more than 12 million people, yet they face challenges with market volatility, drought, floods, disease, food safety and a reliable labor supply. Policy changes are urgently needed to overcome these challenges.”

AGree, a bipartisan group driving positive change in the food and agriculture system, has engaged more than 2,000 food and agricultural thought leaders to identify key issues and develop consensus recommendations to ensure American agriculture continues to thrive, providing the safest, most affordable food supply in the world. These recommendations are the basis of AGree’s Call to Action being presented to campaigns on both sides of the aisle.

“Food and agriculture-related businesses contributed $878 billion to the U.S. GDP in 2013, and it’s critical to enact policy changes that will enable agriculture to continue to drive innovation, allow access to a stable workforce,  protect the environment and empower future generations to provide safe, nutritious, affordable food,” said Jim Moseley, AGree co-chair and former U.S. Deputy Secretary of Agriculture.

The Call to Action advocates smart policy changes to strengthen the food and agricultural sector, which, in turn, will strengthen our nation.
-    Strongly support research and innovation for food and agriculture. Research drives innovation and agricultural research on weather volatility, obesity and water quality require greater focus, while addressing underfunding.
-    Ensure a stable workforce through immigration reform. Agriculture faces challenges of an unreliable labor supply and would be helped by a simple, efficient and fair guest worker program and a system through which citizenship can be earned by undocumented immigrants currently in the U.S.
-    Empower the next generation to ensure a safe and affordable food supply. The average age of U.S. farmers is 58 and new entrants face enormous challenges, including land and equipment acquisitions.
-    Strengthen risk management policies and practices. Balancing risk protection and costs, while integrating data on soil, yield risk and conservation practices are needed.
-    Bolster conservation and working landscapes. Regulations alone cannot ensure the landscape-level actions needed, so policies that encourage producer-led, watershed-scale efforts involving the supply chain and demonstrating effectiveness and a measurable return on investment must be implemented.

“Improving health and nutrition is a top priority for many American families and doing so can help reduce healthcare costs,” said Kathleen Merrigan, AGree co-chair and former U.S. Deputy Secretary of Agriculture. “More than 35 percent of American adults are obese, costing between $147 billion to $210 billion in health care costs annually. Food and agricultural policy reform can help to address these challenges.”

The additional changes outlined below can help to improve the health of Americans and address hunger worldwide, recognizing that nearly 800 million people do not have enough food to eat.
-    Improving Americans’ health and reducing health care costs through food & nutrition. Child nutrition programs must improve and policies must link food and diet to disease treatment and prevention.
-    Respond to changing consumer demands through local food. Supporting local market development can contribute to local job creation, environmental sustainability and improved nutrition, health, food access and equity.
-    Addressing global hunger and malnutrition through international development. Global agricultural development is a proven strategy for reducing hunger and poverty in developing countries and supporting legislation that brings permanency to food security programs will help develop markets for U.S. goods.

“AGree has forged unprecedented common ground between farmers and ranchers, companies, researchers, environmentalists, doctors and nutritionists and other experts who understand the interconnected nature of food and agriculture systems globally,” says Emmy Simmons, AGree co-chair and former Assistant Administrator at the U.S. Agency for International Development. “We are committed to finding solutions and stand ready to serve as a resource to candidates interested in spurring transformative change.”



Small Tractor Sales Rose in December, Combines Down

Tractor sales in the U.S. through December 2015, were down 8% compared to last year. According to the Association of Equipment Manufacturer's monthly "Flash Report," a total of 16,136 tractors were sold which compares to 17,590 sold in December 2014.

For the month, two-wheel drive smaller tractors (under 40 HP) were up 11% over last year, while 40 & under 100 HP were down 16%. Sales of 2-wheel drive 100+ HP were down 35%, while 4-wheel drive tractors were down 3%. Combine sales were down 8% for the month.

For the twelve months, two-wheel drive smaller tractors (under 40 HP) are up 8% over last year, while 40 & under 100 HP are down 3%. Sales of 2-wheel drive 100+ HP are down 26%, while 4-wheel drive tractors are down 39%.  Sales of combines for the first twelve months totaled 5,381, a decrease of 33% over the same period in 2014.



Foot & Mouth Detected on South Korean Hog Farm

South Korea has detected foot-and-mouth in a southwestern hog farm, the first such discovery in nine months and a blow to authorities pushing to contain the disease. Reuters reports that the case involved a type of the disease that animals are inoculated against in South Korea, with all 670 hogs at the infected farm in the city of Gimje, about 125 miles southwest of Seoul to be slaughtered, said an agriculture ministry official.

Another official at the ministry confirmed the new discovery of foot-and-mouth, without giving details.

South Korea struggled to contain foot and mouth after it was discovered in the country in July 2014, intensifying fears about food safety as the nation was also grappling with an outbreak of bird flu. But no new cases had been discovered since April last year.

The outbreak stoked pork imports, mainly from the United States and Germany, with shipments rising nearly 30 percent to around 423,000 tonnes between January and November 2015 from a year earlier, according to Reuters.



TPP Will Not Meet Inflated Promises, Cautions NFU

Like numerous trade deals that came before it, the Trans-Pacific Partnership (TPP) will fail to deliver promised job, economic and trade growth, according to the nation’s second biggest agricultural organization.

National Farmers Union (NFU) President Roger Johnson testified before the U.S. International Trade Commission (ITC) today and warned that TPP will ultimately disappoint rural America because it is modeled after the failed agreements of the past. 

“Unfortunately for this nation, when it comes to these enormous trade deals, the list of promises is quite long but the list of actual deliverables is often very short,” he said. “Instead of helping curb the U.S. trade deficit, agreements like the TPP are actually making it worse.”

The U.S. trade deficit soared to $508 billion in 2014, up six percent from the previous year, despite trade deals with 20 countries.

“Collectively, these massive trade deals have done immense damage to the economy, draining economic growth and jobs from American families,” he explained. “That is why the primary goal of these trade pacts should be to achieve an overall balance of trade, and on that standard, these deals are failing.”

Johnson also testified that TPP and previous trade deals fall woefully short on enforcement tools to prevent foreign governments from cheating the system to give their businesses unfair competitive advantages. He singled out currency manipulation as proof.

Several TPP countries are well-known currency manipulators, he warned, including Vietnam, Malaysia, Singapore and Japan. Most recently, just last August, Vietnam devalued its currency for the third time in one year, making its exports much more attractive on the world market.

“Without measures to enforce restrictions on currency manipulation, free trade agreements aren’t worth the paper they’re written on,” said Johnson.

The tariff reductions and additional market access that Japan – a top buyer of U.S., agriculture goods – has granted through TPP is a positive step for U.S. agricultural exporters, but Johnson noted that it must be measured in the context of the entire multilateral agreement.

When the agreement is signed, famers in Canada, Australia, New Zealand, and Mexico will all compete with U.S. agriculture in the Japanese market. And to achieve the deal, America opened itself up to more imports at home.

“While modest increases in agriculture export opportunities may occur with trade agreements, they can be severely overshadowed by the resulting massive increases of imports of agricultural and other products,” said Johnson. “This is very likely the case with TPP, and underscores why we are opposed to the TPP.”