Midwest farmland prices soar due to strong prices
MICHAEL J. CRUMB,Associated Press -
DES MOINES (AP) -- Increased commodity prices and strong demand have sent prices of farmland skyrocketing, making it more difficult for young and beginning farmers to get established but strengthening the balance sheets for those who own the land.
Across the Corn Belt, the price of farmland was on the rise in 2010. The highest increases were seen in Iowa, where values rose 13 percent and an acre of farmland sold for upward of $7,000 in some areas of the state. Minnesota and Wisconsin also saw double digit increases in farmland value, averaging 12 percent and 11 percent respectively, according to the Federal Reserve Bank in Kansas City.
"A lot of it is driven by commodity prices," said Jason Henderson, a branch manager and economist with the Federal Reserve Bank in Omaha, Neb. "As soon as June, the Russian drought started to raise concerns about global crop supplies and we saw commodity prices begin to rise and we saw farmland values rise with commodity prices."
Nebraska, Kansas and Missouri all saw average farmland values increase about 9.5 percent in 2010. Illinois, Indiana, North Dakota and South Dakota also saw average increases ranging from 8 percent to 11 percent.
Besides increased commodity prices -- for crops such as corn and soybeans -- there has been an increased demand for farmland, which is increasingly seen as a stable investment.
"We're starting to see more interest in farmland purchases by nonfarm investors," Henderson said. "It's more attractive than other kinds of fixed income investments, CDs, stock market investments. It looks like an attractive rate of return for some investors."
Nonetheless, farmers are still the number one buyer of farmland.
Royce Elker, director of appraisal services for the Minnesota-based agricultural financial company, AgStar, said farmers buying more land are "investing in their own business.
"The positive thing is the balance sheets of farmers look better, there is more capital," he said. "It's easier to get money when you have more net worth and the more land you can use as collateral."
Retiring farmers look at the increasing value of their land as a boost to their retirement plan, Elker said.
"People who own land are hesitant to sell it because they're not finding a good alternative for their money," said Lee Vermeer, vice president of real estate operations for the Omaha-based Farmers National Company, a farm management company.
Henderson said no declines in farmland value have been seen across the U.S in 2010, but some areas have seen slower growth than in the Corn Belt.
Texas saw just a 2.8 percent increase, and Oklahoma farmland increased in value by 1.5 percent, Henderson said.
A lot of the wheat grown in the southern plains was harvested before the commodity prices soared, holding down farmland values.
In Oklahoma, energy markets heavily influence land values and natural gas prices have not risen as dramatically as crude oil. The land also carries mineral rights and the revenue collected from natural gas extracted from the land wasn't has high in 2010, Henderson said.
"So that was keeping a lid on farmland prices," he said.
Michael Duffy, an Iowa State University farm economist, said low interest rates and high commodity prices have created a tremendous demand for farmland, but few sellers, he said.
"People are asking themselves, 'where am I going to put my money' and farmland looks as good as anything and as a long-term investment it's probably better than most," Duffy said.
Duffy said more than half of full-time farmers rent some of the land they till or graze, and those rents will go up as the value of the land rises.
"It's a double-edged sword," he said. "Rents are going to go up so it cuts into the profits of the farmer but it also increases the return to the people who own the land."
Duffy said high property costs can make it difficult for young farmers to get started.
Randy Hertz, a financial planner with Hertz Farm Management in Nevada, Iowa, said people should be cautious when buying farmland and not get caught up in the fanfare of the high prices. He said a farm in northwest Iowa's Sioux County recently sold for $13,950 an acre, but that is the exception. By comparison a farm in southwest Iowa sold for less than $2,000 an acre, he said
"You can buy a little Chevy or a Mercedes or a Cadillac," he said. "Everything is priced according to quality and income producing capability. There are circumstances where you might see a very high price but not every farm is worth $8,000 an acre. There is a wide range of values based on the neighborhood and who owns it."
Still, farmland is typically a good investment, he said.
"Historically, farm lands earns 3 to 4 percent a year," Hertz said.
Hertz also said that farmland values stabilized in 2008 before dropping about 2 percent in 2009.
"So over a two-year period, the increases this year don't look so much," he said.
Nonetheless, prices have bounced up significantly in the past 60-90 days, Hertz said.ar
John Blanchfield, senior vice president for agricultural and rural lending for the American Bankers Association, said buying farmland is at the top of the list of a farmer's priorities, right after equipment purchases, maintenance and home repairs.
He said evidence is showing the income generated by high commodity prices is allowing more farmers to pay cash for land rather than taking on debt.
"The prices are certainly frothy," Blanchfield said. "You can call it a bubble but not a credit bubble from what I can see. It's a prosperity bubble and the fuel is cash, not debt."
2011 Legislative Outlook from Iowa Corn -
The Iowa Corn Growers Association (ICGA) will be working with Iowa lawmakers during the 2011 Legislative Session to maintain funding for programs important to Iowa corn growers and to monitor any policy that could negatively affect farmers.
"This year we know that state budgets are going to be an issue," said Mindy Larsen Poldberg, ICGA Director of Government Relations. "Our goal will be to maintain funding for issues important to our corn growers and to protect our existing agricultural tax credits as well as maintain funding and support for programs such as the Renewable Fuels Standard."
In late August, grassroots representatives from the Iowa Corn Growers Association (ICGA) reinstated expiring policies and adopted new issues at the ICGA's annual policy conference in Des Moines. The grassroots delegation held key policy discussions on emerging state and federal issues such as carbon, climate change, and indirect land use.
The following issues will be key ICGA priorities in 2011:
* Support for Iowa's Livestock Farmers - The ICGA is committed to a healthy Iowa livestock industry and works with other farm groups to make sure that legislation affecting livestock production is responsible, reasonable and science based. Livestock is corn's largest customer, and a healthy livestock industry is essential to the Iowa economy.
* Budget and Agriculture Taxes - With State government considering budget cuts, the ICGA will be working to maintain agricultural related taxes or credits. The ICGA expects budget discussions will be a major part of the 2011 legislative session and will be working on behalf of farms in Iowa on agricultural taxes.
* Ethanol Infrastructure - Iowa's Renewable Fuels Infrastructure Fund assists retailers in upgrading to E85, blender pumps or for biodiesel infrastructure. The ICGA is committed to maintain or expand the Renewable Fuels Infrastructure Fund. This program provides an opportunity for retailers to upgrade their infrastructure through cost-sharing grants of up to 70%.
* Ethanol Tax Credits and Iowa Renewable Fuels Standard - 2010 was the second year in the implementation schedule for Iowa's 25% Renewable Fuels Standard. The ICGA is committed to maintaining the long-term integrity of the program with a goal of 25% renewable fuels over the long term. If allowed to work, the 25% Iowa RFS will take Iowa to an average 25% renewable fuels use by 2019.
* Commercial Nitrogen Application - Iowa farmers have made measurable progress in conservation and water quality. According to the United States Department of Agriculture (USDA) data, farmers' use of nitrogen and phosphorus per bushel has been drastically reduced over the past 25 years. The ICGA is committed to allowing commercial nitrogen application based on sound science and agronomic practices and not through state regulations.
The entire 2010-2011 policy resolution book is posted online at www.iowacorn.org
Soybean production information expanded -
ANKENY -- The Iowa Soybean Association's (ISA's) Production Research online library has been expanded with new information to help Iowa's soybean farmers increase yield. ISA's online library now includes a list of commercial soybean varieties with resistance to sudden death syndrome (SDS), produced by Iowa State University (ISU) Extension and ISA. The publication lists more than 300 soybean varieties resistant to SDS in maturity groups I, II and III.
Also available is the 2010 Evaluation of Soybean Varieties Resistant to Soybean Cyst Nematode in Iowa, as well as the Soybean Aphid Report of Insecticide Evaluation.
In addition, ISA's Production Research Library features numerous other popular titles, including many in electronic formats such as video and podcasts and with smartphone compatibility.
The recently revised site can be accessed by going to www.iasoybeans.com
and clicking on the "Production Research" tab, then "Publications."
"This website is packed full of easy-to-read information generated by soybean checkoff-funded research in the past decade and is a valuable resource for farmers, as well as crop specialists," says ISA Director of Contract Research David Wright. "With its new interactive format, it is easier than ever to navigate and find the specific information one needs."
Publication titles are arranged in convenient groups. One section highlights all the newest publications together, but, in addition, all titles are presented in groups under topic tabs, such as "Soybean Aphids" or "Soybean Cyst Nematodes." The publications vary from one-page fact sheets to comprehensive reference manuals.
A few examples:
* The recently released 40-page Soybean Diseases book is useful for identifying, understanding and managing common foliar, stem and root diseases of soybeans. It features full-color photos, along with a detailed description of disease symptoms and management information.
* The 108-page Weed Identification Field Guide is the fourth and latest in a series of handy pocket guides produced by ISA and ISU. It is likely the most comprehensive book of its kind, filled with full-color photos that help identify weeds and help for managing them.
* The Sudden Death Syndrome (SDS) Fact Sheet is one in a series of convenient fact sheets published by ISA. It provides succinct information to help farmers identify SDS, understand its impact and implement best management practices.
All publications can be downloaded as pdfs for immediate access, or print copies can be ordered at no cost by calling ISA at (800) 383-1423.
The new website also includes a subscription form for anyone who is interested in receiving advance notice of new publications via a quick and secure email notification.
The Iowa Soybean Association develops policies and programs that help farmers expand profit opportunities while promoting environmentally sensitive production using the soybean checkoff and other resources. The Association is governed by an elected volunteer board of 21 farmers.
44th annual World Ag Expo -
The 44th annual World Ag Expo, Tools for Agri-Business, will feature the Top-10 New Products for 2011, a new Concert Series, a vast array of educational seminars and a new Beef and Livestock Pavilion.
These are just a few highlights of the world's largest annual farm equipment show, Feb 8-10 in Tulare, Calif., expected to draw nearly 1,500 exhibitors and 100,000 attendees from around the globe.
World Ag Expo is held each February on the 2.6 million-square-foot show grounds of the International Agri-Center, located off Highway 99 midway between Fresno and Bakersfield. Exhibitors display the newest and best products, technology and services for 350 agriculture commodities over the three-day expo.
Admission tickets and information are available online at worldagexpo.com.
Leading World Ag Expo is Chairman Lee Coito, whose team of over 1,500 Orange Jacketed-volunteers provides everything from leadership and policy-making, to forklift service for exhibitors and directions for attendees.
"For just three days in February, World Ag Expo brings together the world of agriculture," Coito noted. "This expo is where farmers, dairymen and ranchers see great innovations for the first time. Much of this new technology is then adopted as part of their operations. It's all thanks to World Ag Expo volunteers."
New for 2011 is a first-ever concert series, kicking off with CMA Male Vocalist of the Year, Blake Shelton. The concert is a fundraiser for a new initiative of the International Agri-Center to support and promote California agriculture.
Shelton will perform on opening day, Tuesday, Feb. 8, inside the new Entertainment Pavilion on the show grounds at World Ag Expo. Tickets are $40, $60 and $80 each and are on sale at worldagexpo.com. Opening for Shelton will be Warner Brothers recording artist Jason Jones.
The second night of the series is a fund-raiser for the new College of the Sequoias agriculture program and will feature Grammy nominee David Nail with opening act Stealing Angels. Tickets are available online for $75, $40 and $20.
World Ag Expo attendees will get to experience agricultural equipment first-hand in the Ride and Drive test area where Toyota, American Honda, Dodge, John Deere, Topcon and Gehl allow attendees to test drive the newest products in real, on-the-farm conditions. A vast array of dairy products, technology and services will be on display in the 70,000-square-foot Farm Credit Dairy Center. Pavilions A and B will feature general agriculture and irrigation exhibits, while Pavilion C features agri-chemicals, fertilizer and spray equipment exhibitors. New for 2011, Pavilion D will feature a beef and livestock emphasis, with a beef and livestock demonstration area where exhibitors can showcase new technology.
A daily seminar schedule, detailed on the web site at worldagexpo.com, includes presentations on topics such as beef production, forage, dairy, export, labor, irrigation, safety, advocacy and water. All seminars are free with paid admission.
Other highlights of the 2011 World Ag Expo include:
* The Top-10 New Products Pavilion will house the 2011 winning entries and 10 honorable mention products. Attendees can help select the Attendees Choice award winner from the Top-10 by voting online and at the New Products Pavilion.
* Download the new for 2011 World Ag Expo iPhone or Android app, powered by MC Solutions, or bookmark the mobile show grounds, for smart phone and web-enabled devices. These two new features will help attendees reach exhibitors before, during and after the expo. Visit worldagexpo.com from a smart phone for details.
* A new partnership with the Fresno Convention & Visitors Bureau means special rates and discounts from member hotels, restaurants, entertainment outlets, airlines and ground transportation providers for those staying in Fresno the evenings of the expo. Park and Ride shuttle service to and from the expo has been added from Fashion Fair Mall in Fresno and Sierra Vista Mall in Clovis. Round trip tours cost $25 per day, or $60 for a three-day pass. Passes may be purchased at worldagexpo.com.
* Admission tickets may be purchased online at worldagexpo.com and attendees are automatically entered to win prizes including one of three Honda Big Red 4X4 MUVs.
* Regional FFA programs will again benefit from a fundraiser with support from Toyota. FFA members are selling tickets and one winner will drive off a new Toyota 4X2 Tundra Grade Crew Max.
* The Forage Challenge, presented by Mycogen Seeds, will recognize the top forage entries, all vying for prize money. The forage display is located in the New Products Pavilion in the southeast corner of the grounds.
* The E.M. Tharp "We Believe in Growing" scholarship will be presented to two high school seniors again this year. Applications are due Jan. 14, 2011.
Free parking is available on the show grounds, and a free shuttle service is available from several locations in Visalia and Tulare to help attendees avoid congestion on surrounding roads.
The International Business Center helps connect buyers and sellers through trade lead exchanges, and offers informative export seminars.
And, not to be overlooked is the wide array of food booths, all operated by local non-profit organizations, located on the show grounds.
"World Ag Expo is truly an experience, and there is something new and different to see each year," Coito added. "It is a blend of impressive big pickers and tractors, the latest in technology, a chance to see old friends and great food that supports great causes. We're proud to support the world's most important industry. "
2011 Cherokee County Ag Show at WITCC -
By Mike Leckband
The 2011 Cherokee County Ag Show will be held on Feb. 8, from 9 a.m. to 3 p.m. at the Western Iowa Tech Community College Conference Center. There is no admission charge for this event.
The purpose of the Ag Show is to help educate farmers on the new farming innovations and new field applications. This event will also help bring farmers together as a form of networking and to provide growers with more information.
There will be many display booths from area vendors on hand all day to meet and greet the public. All proceeds from booth fees will go to an Ag-scholarship program.
The Cherokee Chamber Agri-Business Committee sets up the program and one senior from each school district in the county will receive a portion of the Ag-scholarship. But the student must be planning to go in to Agriculture or an Ag related field to qualify.
At 2 p.m. featured speaker, Elwynn Taylor, Professor of Ag Meteorology at Iowa State University and ISU Climatologist, will address participants.
There will also be a free lunch served from noon to 1 p.m. The lunch is sponsored by area businesses.
At 9 a.m. Iowa State University Pesticide training will begin. The Ag Show has been one of the most popular events in Cherokee since its inception in 1994.
For more information, call the Cherokee Chamber of Commerce at 225-6414.
The Cherokee County Ag Show is sponsored by the Cherokee Chamber of Commerce Agri-Business Committee, Chronicle Times, and KCHE.
This attached file photo is from a previous Ag Show.
39th Iowa Pork Congress to feature crowning of new Iowa Pork Queen -
CLIVE - A total of 17 county pork queens and youth ambassadors will compete at the 2011 Iowa Pork Congress for the right to represent the Iowa pork industry at various pork promotional and educational events during the year.
The 39th annual Iowa Pork Congress will be held Jan. 26 and 27 at the Iowa Events Center in Des Moines.
Eleven candidates will compete for the coveted title of Iowa Pork Queen. All of the contestants are current county pork queens. The runner up will assist the queen as the Iowa pork princess.
There will be six young men and women competing for the title of Premier Pork Youth Ambassador.
All of the contestants will be judged on their overall knowledge of the pork industry and Iowa agriculture, interviewing and communications skills, poise and presentation.
The new queen, princess and premier pork youth ambassador will represent the Iowa pork industry throughout the year at various promotional and educational events around the state, as well as at out-of-state events.
The queen and youth ambassador each receive a $2,000 college scholarship and the princess is awarded a $1,000 scholarship from the Iowa Pork Producers Association.
The winners will be announced Jan 26 during the Iowa Pork Congress Banquet at the downtown Des Moines Marriott.
All of the youth candidates are listed below:
2011 Iowa Pork Queen Contestants:
Kelsey Mumm, Hudson, Black Hawk County;
Ariel Turnquist, Alta, Buena Vista County;
Hollie Johnson, Wellsburg, Butler County;
Sarah Wright, Atlantic, Cass County;
Jessica McDonald, Hopkinton, Delaware County; Jennifer Wicks, Rockford, Floyd County;
Cheyenne McNichols, Rippey, Greene County;
Chelsey Branderhorst, Prairie City, Jasper County;
Allison Dittmer, Columbia, Marion County;
Hailey Ledger, Stockport, Van Buren County; and
Tara Gent, Wellman, Washington County.
Pictures is 2010 Iowa Pork Queen Natalie Ostheimer from Iowa Falls , in Hardin County. Natalie is the daughter of James and Rhonda Ostheimer. Natalie is currently attending Ellsworth Community College, and she plans to eventually pursue a career in radiology or agriculture.
Cherokee WITCC to host agricultural safety program -
Western Iowa Tech Community College will provide a free public program of security training at its Cherokee campus, 200 Victory Drive, March 2 from 8 a.m. to 4:30 p.m.
The program has been developed by the United States Department of Homeland Security. It is designed to focus on best practices and safety issues associated with an agricultural emergency.
Participants will learn the importance of preparing for a potential outbreak and receive training on biosecurity, quarantine, personal protective equipment and disinfection.
The program will provide students, first responders, health care providers, veterinarians, agricultural producers, feed wholesalers and community leaders with training and educational opportunities to improve safety and security for area residents.
The course, Animal Disease Response, will be conducted by representatives of the AgPreparedness Center based in Cedar Rapids, Iowa, and is sponsored by The Security Institute at Western Iowa Tech Community College.
Through a cadre of highly trained instructors, the AgPreparedness Center staff provides training to emergency responders across the U.S. with emphasis on serving the needs of rural America.
The registration deadline for the course is February 3, with a limit of 45 attendees. Interested parties can register at: https://www.agpreparedness.org/12525 . For further information, contact Steve Warnstadt, training coordinator for The Security Institute, at 274-8733 ext 1305.