6 years, 2 months ago AFBF
Farm real estate markets remained relatively stable in the fourth quarter of 2017, according to the Kansas City Fed’s quarterly Survey of Agricultural Credit Conditions. In the Federal Reserve Tenth District, including Colorado, Kansas, Nebraska, Oklahoma, Wyoming and parts of Missouri and New Mexico, values for all types of farmland declined only three percent from a year ago. Prior to the fourth quarter, farmland values had declined at an annual pace of five to seven percent, but those declines appear to have slowed more recently. The KC Fed says stability in farmland values was due, in part, to fewer sales. For the fifth straight year, a majority of bankers reported a decline in the volume of farmland sold. Looking ahead, a significant number of bankers expect values to remain steady in 2018. The report says fewer bankers expect farm income to decline in coming months, suggesting that economic conditions may continue to stabilize. Still, ongoing demand for financing amid a low income environment and slightly higher interest rates suggests that credit risks in the farm sector will remain a focus for 2018.
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NAFTA Exit Would Trigger 15 cent Mexican Sugar Tariff
Withdrawing from the North American Free Trade Agreement would revert the U.S. tariff on sugar imports from Mexico to 15 cents per-pound, the level in place before NAFTA went into effect. A trade adviser to Agriculture Secretary Sonny Perdue told a meeting of the sweetener industry this week that NAFTA eliminated the U.S. tariff on sugar, but Mexican sugar imports to the United States are currently restricted because the U.S. government found that Mexico was subsidizing and dumping sugar in the United States. The U.S. could have imposed duties, but instead reached suspension agreements with Mexico that protect the U.S. sugar industry from unfair trade. If NAFTA is terminated, however, the tariff "would bounce back" to the allowed tariff under World Trade Organization rules, 15 cents per-pound, close to 100 percent of the sugar price, according to the Hagstrom Report. Analysts say that Mexico, which exports 1.2 million tons of sugar to the United States per year, would lose the U.S. market because its sugar would be too high to be competitive.
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Southern Plains Drought Becoming “Rapidly Dire”
The latest Drought Monitor released Thursday suggests the situation in the Southern Plains is becoming "rapidly dire." February 14th marked the 124th consecutive day without rain in Amarillo, Texas, and the 98th consecutive day without measurable precipitation for Lubbock, Texas. The western half of Oklahoma and northern Texas are classified in an extreme drought, with nearly all of both states in some form of drought. The U.S. Drought Monitor says impacts will rapidly escalate if rain does not materialize soon, noting that the lack of rainfall is affecting winter wheat, pastures, pond levels and streamflows. Nearly all of the Southwestern U.S., including California, meanwhile, are in some form of classified drought, along with all of Missouri and Kansas, parts of Iowa and Nebraska, and the Dakota’s. In the Southeastern U.S., drought conditions improved due to an abundance of rainfall in the last week.
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USGC ROI: 20 to 1 In Farm Bill Spending on Export Market Development
Spending on overseas market development for U.S. feed grains and related products increased the value of those exports by an average of $1.71 billion per year from 2010 to 2014, according to a new study. The U.S. Grains Council says spending on market development also increased U.S. gross domestic product by an average of $5 billion per year, returning $19.76 for every $1 spent by taxpayers. The study by Cornell University reviewed the economic value of the Grains Council’s programs, unveiled at the USGC Annual Membership Meeting in Houston, Texas, this week. In addition to successes related to export value and GDP, Council activities created 23,700 full-time jobs with $1.12 billion in labor income each year, while reducing direct government payments to farmers of U.S. grains by an average of $15.3 million a year. Grains Council Chair Deb Keller of Iowa says the study shows: “Our programs are not only working for our members, they are returning many times more to the federal treasury than they cost.”
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Growth Energy: Biofuels Vital to Improving Energy Outlook
Growth Energy says federal data shows a clear and growing need for U.S. biofuels. A federal forecast released by the U.S. Energy Information Administration projects through 2050 based on current trends and regulations, an 18 percent increase in miles traveled by U.S. motorists in traditional light-duty vehicles. That's an increase from 2.8 trillion miles in 2017 to 3.3 trillion miles in 2050. EIA also reports retail prices of motor gasoline and diesel fuel are projected to increase from 2018 to 2050, largely because of expected increases in crude oil prices. In response, Growth Energy regulatory affairs vice president Chris Bliley says: “Blending more homegrown, cost-efficient biofuels into the fuel supply is the ready-made solution to lowering prices at the pump while also dramatically reducing emissions.” Fuels like ethanol are currently saving the average American household $142, according to the American Journal of Agricultural Economics. Bliley says: “those savings will only grow as the demand for transportation rises in the decades to come.”
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Syngenta Acquires Satellite Imagery Innovator
Syngenta has acquired FarmShots, Inc., a North Carolina-based innovator of high-resolution satellite imagery that detects plant health by analyzing absorbed light from field images. In a company news release, Syngenta says FarmShots was developed to help farmers, agronomists and retailers quickly and accurately spot field issues caused by planter skips, emergence, insect feeding, poor plant nutrition, crop diseases, weeds, pests and environmental damage. A Syngenta spokesperson says the acquisition will help the company “further develop farm management and crop decision-making tools.” FarmShots will integrate into Syngenta's AgriEdge Excelsior whole-farm management system in the U.S., and ultimately will be used by growers worldwide, according to the company. Cloud-based, proprietary software and interfaces developed by FarmShots create high-resolution images, which can be displayed in multiple formats to view field conditions. In January, John Deere honored FarmShots as its "Dealer's Choice for Innovation.”
