Friday July 19 Ag News

Rural Mainstreet Economy Down Again for July
Bankers Expect Farmland Prices to Drop Over Next 12 Months

For an 11th straight month, the overall Rural Mainstreet Index (RMI) sank below growth neutral, according to the July survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The region’s overall reading for July sank to 41.3, its lowest reading since November 2023, and down from 41.7 in June.  The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

“Weak agriculture commodity prices, sinking agriculture equipment sales and declining farm exports pushed the overall reading below growth neutral for the 11th straight month,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Farming and ranching land prices: After falling below growth neutral for two straight months, farmland prices rose above the growth neutral threshold for July. The region’s farmland increased to 52.2 from June’s 49.9. “Only 8.7% of bank CEOs reported that farmland prices expanded from June levels,” said Goss.

Bankers were asked to project farmland prices for the next 12 months. “On average, bankers expect farmland prices to drop by 3.4% over the next 12 months,” said Goss.

According to trade data from the International Trade Association, regional exports of agriculture goods and livestock for 2024 year-to-date were down $198 million, or 3.6%, from the same period in 2023.

Farm equipment sales: The farm equipment sales index for July plummeted to 19.0, its lowest level in more than seven years, and down from June’s 31.8. “This is the 12th straight month that the index has fallen below growth neutral. Higher borrowing costs, tighter credit conditions and weak grain prices are having a negative impact on the purchases of farm equipment,” said Goss.

Below are the state reports:
Nebraska: The Nebraska RMI for July sank to 38.6 from 39.5 in June. The state’s farmland price index for July rose to 50.3 from 48.5 in June. Nebraska’s July new-hiring index sank to 47.8 from 48.2 in June. According to trade data from the International Trade Association, exports of agriculture goods and livestock for 2024 year-to-date were up by $115.1 million, or 36.0%, from the same period in 2023.

Iowa: July’s RMI for the state increased to 49.5 from June’s 48.0. Iowa’s farmland price index for July improved to 53.4 from 50.9 in June. Iowa’s new hiring index for July rose to 51.6 from 49.0 in June. According to trade data from the International Trade Association, exports of agriculture goods and livestock for 2024 year-to-date were up by $11.3 million, or 1.5%, from the same period in 2023.

The survey represents an early snapshot of the economy of rural agriculturally- and energy-dependent portions of the nation. The Rural Mainstreet Index is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. The index provides the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former Chairman of the Independent Community Banks of America, created the monthly economic survey and launched it in January 2006.

 


Interest Rates, Grain Prices Impacting Farmland Values

While still at or near record levels, farmland values have stabilized in Iowa, Kansas, Nebraska, South Dakota and Wyoming, the five states served by Farm Credit Services of America (FCSAmerica) and Frontier Farm Credit. As a whole, benchmark values ticked up an average of 0.07% in the first half of 2024, according to the Benchmark Farm Value Trends Report jointly issued by the two Associations.

Land values made modest gains in Nebraska, South Dakota, Wyoming and eastern Kansas. Each state experienced increases in cropland and pasture.

Iowa by comparison, saw values decline for the first time in five years. Iowa generally serves as a leading indicator for the real estate trends. The market there has been relatively stable to slightly decreasing since 2022. Despite the recent pullback, Iowa’s benchmark values are up nearly 60% since 2019.

“The combination of higher interest rates and tighter margins for grain producers is having an impact on cropland values,” said Tim Koch, executive vice president of business development for the two Associations, which operate as part of a collaboration.



Market Forces Shaping Farmland Values
Some of the factors that supported a strong real estate market in recent years are still in play. This includes financially strong buyers and a limited supply of ground.

Cropland sales reported in the first half of 2024 were off as much as 80% in areas compared to the same period in 2023. In South Dakota and eastern Kansas, however, public auctions were up.

The buyers in the market are unchanged – primarily agricultural producers with cash from back-to-back years of record farm profits or debt locked in when interest rates were near historical lows. However, Koch said, there likely are fewer buyers as a result of tighter margins. Investors also have left for higher returns.

Profitability created optimism in the market and helped to offset the impact of the Federal Reserve’s rate hikes in late 2022 into 2023. Declining grain prices have shifted attention to the need to preserve working capital and managing costs, Koch said.

State-by-State Farmland Trends
Nebraska: Cropland values increased an average of 0.5% in the past six and 7.0% in the past 12 months. The market is relatively stable, with continued strength for top quality cropland.

Pasture benchmark values increased an average of 0.4% and 6.5% in the past six and 12 months, respectively.

Public land auctions in the first six months were down 13% compared to the same period a year ago. Total dryland cropland declined nearly 70% from the first to second quarter of 2024, with an average per-acre price of $6,134 in the second quarter. Sales of irrigated land dropped nearly 60% during the same period, with an average second-quarter price of $7,830 per acre.

Iowa: Benchmark values for cropland have shown an average decline of -3.6% for both the past six and 12 months.

Public auctions in the first half of 2024 were down 24% compared to the previous year. Total cropland sales were down 28% compared to the second quarter of 2023.

The average sale price for unimproved cropland in the second quarter of 2024 was $12,784 per acre.  



AG EDUCATOR MATT KREIFELS RECEIVES AWARD OF MERIT, NAYC’S HIGHEST HONOR

Matt Kreifels, Ph.D., Associate Professor of Practice at the University of Nebraska–Lincoln, and long-time ag educator, was recently selected by the members of the Nebraska Agricultural Youth Council (NAYC) to receive the Council’s highest honor. Kreifels received the Nebraska Agricultural Youth Institute’s (NAYI) Award of Merit during a special awards luncheon at UNL’s East Campus Union in Lincoln. The Nebraska Department of Agriculture (NDA) oversees NAYC and NAYI.

“Teaching agriculture is one of the best ways to make a positive impact on current and future ag educators,” said NAYC Advisor Christin Kamm. “Throughout his career, Matt Kreifels has mentored, encouraged, and inspired people to teach and be a part of the ag industry. This Award of Merit is a token of our appreciation to Matt for his constant support of agriculture, education, and the next generation of ag leaders.”

Kreifels earned his bachelor's degree in agricultural sciences from UNL, his master's degree in curriculum and instruction from Wayne State College, and his doctorate’s degree in human sciences/leadership studies from UNL. From 2010-2018, he served in a dual appointment between UNL and the Nebraska Department of Education as the State Director of Agricultural Education. Before coming to UNL in 2010, Kreifels taught agricultural education courses and served as the FFA advisor for nine years at Blair High School.

Through his role at UNL, Kreifels leads the agricultural education teacher preparation program, coordinates professional development for current Nebraska agricultural education teachers, manages the Nebraska Beginning Teacher program, and coordinates the Nebraska Career Development Events.

“Matt is dedicated, knowledgeable and passionate about agriculture and makes a difference every day in the lives of ag educators across the state and country,” said Kamm. “We want to congratulate Matt on receiving this award and thank him for his dedication to the youth of Nebraska and for all he does for the ag industry.”

Scholarships Awarded to Youth
Scholarships in the amount of $500 each were awarded to two recent graduates who participated in NAYI this year as returning delegates. Returning delegates have additional responsibilities during NAYI designed to enhance leadership abilities and organizational skills.

The two scholarship recipients are Ceiden Childears of North Platte, and Levi Huffman of Maxwell. These two students are planning to attend the University of Nebraska this fall and be a part of CASNR.

NAYI is a week-long event for high school juniors and seniors interested in agriculture. NAYI includes motivational speakers, ag education, networking with peers and industry leaders, leadership experience and information on ag careers. In its 53rd year, NAYI is the longest running program of its kind in the nation.

NAYI is made possible through generous donations from agricultural businesses, commodity groups, and industry organizations. To learn more about NAYC or NAYI, visit https://nda.nebraska.gov/nayi/.



CVA Promotes Grain Bin Safety with Grain Engulfment Training

Central Valley Ag is proud to announce the completion of its groundbreaking grain engulfment trailer, designed to provide local first responders with training for grain bin rescues.

Developed in partnership with EBM Construction, this $75,000 training tool began development in March 2023. Through a year of collaboration, community donations, and dedicated effort, the trailer is now fully operational.

The project began with a generous donation of the base trailer from Klute Truck Equipment and Cornerstone Bank in Bradshaw, Neb. This trailer was then designed and fabricated by EBM construction to become a fully functional grain engulfment simulator. CVA and EBM Construction worked together to finalize the design and build what is now known as the CVA Grain Engulfment Training Trailer.

While local donations covered a significant portion of the cost, EBM Construction covered the remaining balance. Andrew Ellsworth, Vice President of EBM, recognizes the importance of this training tool for local communities, farmers, and rescue teams and says EBM sees the trailer’s impact as invaluable.

“This trailer could save the life of an employee, a friend, or a customer.” Said Ellsworth. “While rescue videos offer valuable information on effective grain bin rescue, nothing can compete with practicing real-life scenarios. We are thankful to work with CVA on such an impactful project and look forward to the positive difference it will make in our communities.”

This one-of-a-kind trailer offers local fire departments and emergency personnel a safe and realistic environment to practice their grain bin rescue skills. The unique design allows trainees to be safely submerged up to their waist or chest in simulated grain, enabling rescue teams to practice critical extrication techniques.

"The reality is these rescue teams will be responding to real grain entrapment situations on farms or businesses.” Explains Joel Wochner, CVA Bradshaw Location Manager. "This trailer provides them with the opportunity to practice using their equipment in a controlled environment, ultimately improving response times and saving lives."

Central Valley Ag recognizes the vital role first responders play in rural communities, particularly for specialized rescues. The grain engulfment trailer is available free of charge to local fire departments for training purposes.

The Bradshaw, Hampton, and Henderson Fire Departments have already benefited from this innovative training resource, and CVA hopes many more departments will follow suit.

“CVA has been deeply involved in preventing and rescuing grain engulfment incidents with our rope rescue teams.” Said Brent Reichmuth, SVP Operations at CVA. “We are excited to further these efforts by using this trailer to enhance training for both CVA and our local communities."



CLIMATE ASSESSMENT RESPONSE COMMITTEE TO MEET

Hilary Maricle, Deputy Director of the Nebraska Department of Agriculture, has scheduled a meeting of the Climate Assessment Response Committee (CARC) for Friday, July 26, 2024. The meeting will begin at 9:30 a.m. at Hearing Room 031, 245 Fallbrook Blvd., Lincoln, NE 68521.

Officials will brief CARC members on existing, as well as predicted, weather conditions and provide a water availability outlook.

For more details contact Nolan Lemna at nolan.lemna@nebraska.gov or 402-471-6861 or visit carc.nebraska.org.



ACE Releases Conference Agenda for 37th Annual Event

The American Coalition for Ethanol (ACE) conference agenda is now available for the 37th annual event taking place next month. The event will kick off the evening of Wednesday, August 14, and conclude around noon on Friday, August 16, at the Omaha Marriott Downtown at the Capitol District.
 
“Our conference agenda is packed with dynamic sessions, insightful speakers and networking opportunities, making it the premier destination for anyone passionate about advancing biofuels,” said Katie Muckenhirn, Vice President of Public Affairs. “You’ll see our conference theme ‘The Gold Standard’ reflected in the topics that showcase the ingenuity, productivity and bold innovation of this industry.”   
 
Participants can expect to delve into cutting-edge technologies, policy developments and market trends that are shaping the biofuels sector. The lineup of experts and thought leaders will explore innovative strategies to boost production, enhance efficiency and maximize policies that support biofuels.
 
Notable highlights of the two-and-a-half-day agenda include:
    Keynote: Creating New Opportunities for Agriculture, Ethanol and the Environment: CO2 Pipeline Project Update – Lee Blank, Summit Carbon Solutions
    Setting the Standard: The Current State of GHG Modeling and Unlocking New Markets and Tax Credits with Climate-Smart Agriculture – Jonathon Lehman, Cultivating Conservation; Ron Alverson, Dakota Ethanol; Tristan Peitz, Talus Renewables Inc.
    Trade Keynote: Expanding Global Markets – Mackenzie Boubin, U.S. Grains Council
    Feedstock Projections and Realities for Renewable Diesel and Sustainable Aviation Fuel – Marty Ruikka, The ProExporter Network
    Customers Leading the Transportation Revolution – Dr. BJ Johnson, ClearFlame Engine Technologies
    Fueling Market Growth: Ethanol Equipment Incentives and Ingenuity – Jeff Carpenter, U.S. Department of Energy Higher Blends Infrastructure Incentive Program; Randy Gard, Bosselman Enterprises
    Implementation of Key Inflation Reduction Act Incentives – Donna Funk, Pinion; RSM US LLP; Faith Larson, Mickelson & Company

The program also includes opportunities to connect with like-minded individuals and expand your professional network during dedicated receptions and break times, including the Welcome Reception on the evening of Wednesday, August 14, and special Networking Reception at the outdoor Capitol District Plaza on Thursday, August 15.
 
To view the full agenda online, along with other event details and registration, visit ethanol.org/events/conference.



USGC Touts U.S. Corn Sustainability In China

U.S. Grains Council (USGC) Director of Global Sustainability Carlos Suárez traveled to China last week to promote the Council’s corn sustainability assurance protocol (CSAP) to importers and end-users. From left to right: USGC Director in China Manuel Sanchez; USGC Sustainable Corn Exports Chairman and Iowa corn farmer Roger Zylstra; Suárez; and USGC Program Manager Ellie Yan at Yangshan Port, the world’s largest container terminal.

Suárez delivered a presentation on the sustainability benefits of U.S. corn to importers, processors and other industry representatives at the 15th China International Cereals and Oils Conference.

Last week, U.S. Grains Council (USGC) staff met with key partners and customers about the eco-friendly benefits of U.S. corn and how the Council’s corn sustainability assurance protocol (CSAP) helps importers verify the quality of their products.

The Chinese government recently unveiled its corporate sustainability disclosure guidelines, under which companies will report within a unified sustainability framework. These procedures will come into effect in 2027 and were developed in line with the International Sustainability Standards Board (ISSB).

“The Chinese market is signaling it’s looking to align with international sustainability standards, and this creates an opportunity thanks to U.S. corn growers’ long tradition of conservation and environmental stewardship,” said Manuel Sanchez, USGC director in China. “This was the perfect time to introduce the CSAP to the Chinese market and leverage the great work U.S. farmers are already doing to enhance U.S. agriculture’s market share here.”

Sanchez and staff based in the Council’s Beijing, China office were joined by USGC Director of Global Sustainability Carlos Suárez, who oversees the CSAP and its integration into the worldwide agricultural supply chain, and USGC Sustainable Corn Exports Chairman and Iowa corn farmer Roger Zylstra.

The agenda began with a meeting with U.S. Department of Agriculture (USDA) representatives at the U.S. Consulate in Shanghai to discuss new promotional strategies and opportunities for the U.S. industry after the recent policy changes in China.

Council staff also toured several port facilities and met with a multinational food processing company and an agricultural market analysis firm to better understand how the national sustainability initiative will affect domestic companies and their raw material imports.

The group participated in the 15th China International Cereals and Oils Industry Summit on July 11, where Sanchez and Suárez spoke on a panel about global feed grain supply outlooks.

Suárez then gave a presentation on the CSAP and how advantageous it is to both buyers and sellers by providing detailed insights into the regulations, processes and management practices involved in U.S. corn production.

The delegation attended the Second China Feed Breeding Industry Conference the following day to build business relationships with local producers and gather information about developing trends in the Chinese pork and poultry industries.

“The sustainability standards that China adopts will have immense ripple effects in the global economy, and the U.S. industry needs to be ready for international importers’ needs to shift and establish new avenues of engagement in foreign markets,” Suárez said.