Category Archives: Agricultural Exports News

agricultural export

Water Is the Word at Granddaddy California Farm Show

Byline:

“Water.” That was the first word that probably came to mind for many attending The Colusa Farm Show this week. While rainfall has been scarce across California in recent years, there’s been no shortage of it this winter. 

Drought-busting heavy rains this week in fact made it hard to find parking in the swamped lots surrounding the Colusa fairgrounds. Parts of the show ground were a muddy mess. Some roads to town were closed due to flooding. The spillway for a nearby dam that holds precious water for the state and protects the Sacramento Valley from flooding had been damaged overnight. 

“Water.” That was the quick reply from John Kimura, a Yuba City farmer, when asked about the top issue on his mind these days. He thought a minute, and added, “Water and regulations.” His brother, Gary, in fact, had just had a chat with the California Highway Patrol at their show booth about the state’s new regulations, including those for tie-downs on trucks and trailers. 

KimuraBros
Kimura Brothers
“Water is the big issue,” echoed Lisa Humphreys, manager of the Glenn County Farm Bureau. 

She explained the state’s new Sustainable Groundwater Management Act, another challenge for farmers.

Water is a big word in California these days for many reasons. 

While there is plenty of water in northern California now, thirsty southern California is demanding more of the north state flows that are used for irrigating crops around Colusa — rice and orchards, mainly. Last year, due to the lingering drought, some farmers were unable to receive their usual surface water supplies. On top of everything else, the recent, heavy rains threaten to damage orchards as the trees come out of dormancy. 

“Granddaddy of them all”

But water worries aside, farmers attending the Colusa show came mostly to look at equipment and socialize. Mud puddles and occasional heavy rain were no deterrent. 

The Colusa Show, the largest ag show in northern California, and in its 52nd year, is called the “granddaddy of them all” on the West Coast. It’s a must-see for northern California farmers but draws attendees from out of state as well. Bill Coleman and Rick Rice, for example, had journeyed more than 400 miles from Oregon to eye the new machinery. Coleman, a filbert grower, was taking a close look at nut-harvesting equipment that allows a two-person operation. 

The Colusa event is a showcase of an area that is a leader in the state’s rice, nut, and fruit production. Sunsweet Growers in nearby Yuba City is the world’s largest handler of dried fruits, including prunes, apricots, mangos, and more. 

“There are a lot of positive things happening here,” said Farm Bureau’s Humphreys. Specific industries are doing well. Almond and walnut prices are strong, if not record high. And, hey, after the drought, it’s good to see it raining.” 

Among the topics surfacing at the show this week: 

Solar has a sunny outlook.

“A few years ago, farmers didn’t want to be the first guy in line to buy solar equipment,” said Dean Swanson, a representative of Sunworks. The solar company has seen business nearly triple over the last three years. Solar adoption is helped by the fact that a 30% tax credit has been extended to 2019, Swanson said. For farmers and other businesses, the payback is three-and-a-half to four years. Solar panel prices, moreover, are at “rock bottom” right now. There are 1,200 solar panel manufacturers around the world, he said. “It’s a good time to buy. Anything with a meter on it can use solar.”

Help wanted!

Nationwide, there are two jobs available in agriculture for every new job seeker. In California, there are four jobs open, said Miranda Driver, CalAgJobs, an organization that works to connect farm businesses with employees. CalAgJobs deals mainly with plant science positions. But the need for skilled workers exists at all levels, she said. “Everyone who talks with us says they can’t find workers to pick peaches or work in the fields and orchards. Finding reliable labor has become very difficult,” Driver said. Thus, immigration policy is a “pretty intense subject” in rural California, she said. Farm Bureau is pushing the new administration not only to focus on border enforcement but also to help develop a legal agricultural workforce in the state. 

Drones on the rise.

One of the more popular presentations at the show Tuesday was expected to be on the use of drones in California agriculture. Scott Gregory, a remote sensing expert at Ag One Solutions, discussed using drones for mapping and remote sensing. Interest is high, but many farmers still are waiting to see the practical applications pan out, said Jim Bianchin, Vertical Sciences, Inc., a company providing data collection via drones. Farmers are starting to use drones to identify problem areas in their fields, Bianchin said. They can also use the technology to create drainage plans or identify irrigation issues, he said. 

JohnRayColusa
John Ray, Thomas Manufacturing
Organic ag adoption.

More and more farmers are lining up to buy organic fertilizer these days, said Jeff Delaguerra, a representation of True Organic Products. The fertilizers, both powder and liquid, are made from meat and bone meals, as well as fish wastes. Some 13% of growers in the Central Valley now are organic, more than double the number of a few years ago, he said. “In the Central Valley, if you’re not organic, you’re sustainable,” he said. “Farmers are increasingly becoming environmentally conscious.” 

Going nuts at harvest.

“This area is a great environment for the nut industry,” said John Ray of Thomas Manufacturing, which makes equipment for the nut and orchard industries. “The growers have really been successful in continuing to improve their yields.” The result: “We have to sell a lot more nuts,” says Jennifer Olmstead, marketing director of the California Walnut Board. For a look at what a walnut harvest looks like, visit: http://youtu.be/jEBQtIxi-Ik

Are Ag Forecasts Getting Less Bleak?

Byline:

Since the collapse of the agriculture boom in 2013, the start-of-the-year forecasts for the farm economy have been as uniformly dreary as midwinter in the Midwest: big stockpiles and the lowest season-average commodity prices in a decade. It’s hard to turn a profit, and USDA chief economist Robert Johansson says the stress is mounting for some producers.

One in 10 crop growers and an equal portion of livestock operators are highly leveraged, meaning they carry debts that exceed 40% of their assets, a rocky position. “It’s been picking up lately,” Johansson says. “It (had) been fairly flat for the last 10 years or so.” 

Highly leveraged operators tend to be growers with a high proportion of rented land and recent entrants to farming, who have limited reserves. Only 6.5% of crop farms and 6% of livestock operations were highly leveraged four years ago.

In a Successful Farming magazine interview, Johansson says delinquencies on farm loans are rising but bankruptcies remain low. The debt-to-asset ratio, a commonly used gauge of financial stress, was 13.2% in 2016 and “will tick up this year as land values fall,” perhaps as high as 14%. That would be the highest since 15% in 2002 but far below 22.2% in 1985 (at the worst of the agricultural recession). “The situation is much different than it was then,” notes Johansson.

The sector is also adjusting to expectations that commodity prices are not likely to improve much for years to come. Farmers are tightening the screws on production expenses and idling less productive land. Grain, soybean, and cotton plantings are expected to decline by more than 6 million acres from 2016.

Cash rental rates for farmland are likely to fall by 5% this year, says Johansson. “I don’t see land values coming down as quickly on a percentage basis.” Low interest rates support land values by making it easier for farmers to afford to buy land when it comes on the market.

It’s a common theme among agricultural economists that the farm economy this year will look a lot like last year. 

A University of Missouri think tank says farm income will be up by $1 billion, a marginal improvement. Crop prices may be slightly higher this year, but production will be smaller than last year’s record-setting corn and soybean crops, so revenue should be roughly similar. 

On the broader front, U.S. and world economic growth are forecast higher, pointing to higher demand for farm goods. The impact could be offset by rising inflation and interest rates as well as petroleum prices.

“There are a lot of things out there that could change” the economic picture, says Johansson. Exports account for 20% of U.S. farm income, so large-scale change in trade agreements could influence foreign sales, for better or worse. Since China is the number one market for U.S. exports, its decisions, such as opening the door to U.S. beef or throttling back on pork, could have an especial impact. Similarly, if economic growth overseas accelerates above the 2.7% assumed by USDA, U.S. farm exports could benefit.

There is the perennial question of how weather or disease will affect production. Brazil, the top U.S. competitor in soybeans, is on track for a record crop, due to large plantings and good conditions early in the growing season. The crop has a ways to go. February is the main pod-filling month with harvest mainly in March. If Europe, and particularly France, rebounds from the poor wheat crop of 2016, it could add to record-large world wheat stocks. South Korea culled its flocks of domestic fowl, cutting egg production by 30% because of an outbreak of avian influenza. As a result, it began importing U.S. eggs in January, a welcome outlet for U.S. egg farmers, who have rebuilt flocks from losses in the worst-ever U.S. bird flu epidemic in 2014-2015.

Around the world, there are key countries and markets where U.S. exports and, indirectly, farm income ride on local events. “In any given region, you could pick one,” says Johansson.

This article was produced in collaboration with the Food & Environment Reporting Network, an independent, nonprofit news organization producing investigative reporting on food, agriculture, and environmental health.

FERNlogo

Science Groups Battle Back Against Trump Travel Ban

Byline:

One hundred and fifty-one professional scientific organizations – including some agricultural ones – have signed a letter opposing an executive order issued by President Donald Trump. In the letter, the groups state the executive order that has banned refugees and travelers from seven predominantly Muslim countries has profound implications for diplomatic, humanitarian, and national security interests, in part, because of the negative impact on U.S. science and engineering capacity.

The letter http://www.aps.org/about/governance/letters/upload/multisociety-imm.pdf states that 151 organizations – representing a broad spectrum of professional scientific, engineering, and education societies, national associations, and universities – are concerned the executive order initiating the ban will negatively impact the ability of scientists and engineers in industry and academia to enter, or to leave from and return to, the U.S. The letter states that it reduces U.S. science and engineering output to the detriment of the U.S.  

“Scientific progress depends on openness, transparency, and the free flow of ideas and people, and these principles have helped the United States attract and richly benefit from international scientific talent,” says the letter. “From the Apollo program and exploring the far reaches of the universe, to advancing biomedical research for curing diseases and harnessing science to build a thriving high-tech sector, the United States is considered a leader in science, education, and innovation. In order to remain the world leader in advancing scientific knowledge and innovations, the U.S. science and technology enterprise must continue to capitalize on the international and multicultural environment which it operates within.

“The executive order will discourage many of the best and brightest international students, scholars, engineers, and scientists from studying and working, attending academic and scientific conferences, or seeking to build new businesses in the United States. Implementation of this policy will compromise the United States’ ability to attract international scientific talent and to maintain scientific and economic leadership. Today, we urge the administration to rescind the executive order, and we stand ready to assist you in crafting an immigration and visa policy that advances U.S. prosperity and ensures strong borders while staying true to foundational American principles as a nation of immigrants,” the letter says.

Some agricultural science groups that signed the letter include:
• American Phytopathological Society
• American Society of Agricultural and Biological Engineers
• American Society of Agronomy
• American Society of Animal Science
• Entomological Society of America
• Soil Science Society of America

 

Subheading

The Trump travel ban on refugees and travelers from seven predominantly Muslim countries will negatively impact U.S. science interests, state these scientific organizations.

Finding the Blue Sky in Agriculture

Byline:

It’s not reported much, but there is blue sky in agriculture, and we want to explore it.

But first, have you heard of this saying?

The brain is like Velcro for negative experiences, but Teflon for positive ones. Rick Hanson, a psychologist and author, writes about taking in the good. “People will work much harder to avoid losing $100 than they will work to gain the same amount of money.” He adds, “Painful experiences are much more memorable than pleasurable ones.”

Farmers are no different. They can tell you exactly what year they grew their farm’s worst crop, the lowest price they ever took for corn or soybeans, or where they were when the broker called and asked for more margin money for their futures trading account.

There is hope for farmers in Hanson’s message. 

Here’s how to “take in the good” in three simple steps.

  1. Look for good facts and then turn them into good experiences.
  2. Really enjoy the experience. Stay with it for 30 seconds without getting distracted.
  3. Intend and sense that the good experience is sinking into you.

We want to help you take in the blue sky for agriculture in 2017.

After sinking prices in nearly every grain and livestock market in 2016, economists see a return to higher ground.

“The heavy red ink for cattle operations could be behind us, and profits are projected to return to the hog market this spring,” says Lee Schulz, Iowa State University Extension economist. 

Some grain analysts and market watchers see record global demand as poised to dwindle record supplies and to offer opportunities for farmers to sell at profitable levels in mid-2017.

There’s more blue sky. Now may be the time to buy good, used equipment. The outlook for fertilizer prices and cash rent rates point in favor of savings for farmers.

- Mike McGinnis

lower Cash rents

Growers looking for some positive news on the cost side can take heart knowing that, on average at least, cash rents are going down along with the price of commodities. 

Agricultural land rents – both irrigated and non-irrigated – are projected to fall 6% year over year in 2016, according to the U.S. Department of Agriculture. The average value of cropland in the U.S. will fall about 1% to $4,090 an acre, the first decline in seven years, the agency reports. 

The downturn is a marked reversal from gains the past decade when cropland values doubled and cash rents jumped 71%. The falling cost of land – among the only decliners since many other inputs including seed and fertilizer stand fast or rise – likely will continue until crop prices begin to rise, says Jeff Voeks, a market adviser at Stewart Peterson Brokerage Solutions. 

“Cash rent prices will edge lower,” Voeks tells Successful Farming magazine. “To say they’ll fall is overstating it a bit, but I think they’ll continue to eke a little bit lower.” 

While rents are down year over year, corn prices have tumbled about 10% and wheat futures are off by about 20%. Soybean prices are up from last year, but only because they rebounded in the first half of 2016 on weather worries that never materialized. 

Lower rents will help out younger farmers, especially small stakeholders who are trying to expand their holdings or to get started in the industry, says Larry Glenn, an analyst at Prime Ag in Quinter, Kansas. While conventional wisdom would say that now isn’t a good time for a young farmer to jump into the industry, it’s possible that getting in now when rents are low could pay dividends in the future. 

Even large bank- and corporation-owned farms will likely be forced to reduce rents due to extremely low crop prices, though probably not as drastically as small farmer- or family-owned landholders, he says. 

“Big corporate farms are going to want to stay up as high as they can,” Glenn says. “I wouldn’t be surprised,” however, if larger banks or corporations that own farms make adjustments based on the price of grains and soybeans, he says. 

Cash rent prices probably will continue to fall into next year. To offset declining or stagnant crop prices, growers are reportedly saying they’re going to cut back on corn and bean planting, Voeks says. This will only work if they hold true to their word, he says. 

Still, it will take a while to work through the glut of several years’ worth of high yields, which could mean an extended period of low rental prices. 

“Downward pressures likely are being placed on rents,” says Gary D. Schnitkey, a professor in the department of agricultural and consumer economics at the University of Illinois. “Therefore, it is likely that average rents in 2017 will be lower than those for 2016.”

Now is the time in agriculture when farmers should be looking for opportunities, according to Michael Boehlje, Purdue University economist. 

- Tony Dreibus

cheaper iron

 Certainly one of the biggest silver linings in the storm clouds of a depressed farm economy has been the significant savings being offered on late-model, and low-hour machinery. 

Values on high-horsepower tractors, four-wheel drives, combines, self-propelled sprayers, and grain carts are one quarter to one third less than in 2012. 

“I’ve never seen opportunities to buy large machinery at such competitive prices as exist today,” says Jeremy Knuth of Heritage Power, a John Deere dealership out of Baldwin City, Kansas. 

“We are looking to move out built-up inventories, and we are willing to work hard to make a transaction work for an individual farmer’s situation,” Knuth says.

Another hallmark of this massive inventory of late-model machinery is that most of the equipment for sale carries unprecedented low hours. It is not uncommon to uncover a 2014 model year 300-plus-hp. tractor for sale with fewer than 500 hours. 

"Our C-O-P is near $3 with seed down $15 and fertility down $25 per acre." – Central Indiana Farmer

In a recent price comparison of tractors available on dealers’ lots, Successful Farming magazine identified 42 high-horsepower tractors of various makes with fewer than 400 hours. It is not unusual to find 3-year-old machines with only 150 hours. This same situation is well stated in Class 7 and larger combines, as well. 

The poster child of like-new large machinery is the grain cart. A search of John Deere’s dealer website, machinefinder.com, finds 252 large (1,000-plus-bushel) grain carts for sale that are 3 years old or younger. Even more amazing is the number of brand-new carts that are 2, 3, and even 4 years old still sitting on dealers’ lots. For a detailed analysis of large machinery price trends, refer to the December issue of Successful Farming magazine on pages 32-36.

There is another aspect that accentuates the unprecedented value of large and late-model machinery. Manufacturers have armed dealers with an array of financing plans to entice buyers. 

“Whether it’s a certified preowned (CPO) program or low- or no-interest financing, dealers are in a position to reward farmers for buying in ways not available before,” observes Nate Weinkauf of Case IH. These programs commonly inspect used equipment, often making necessary repairs and improvements before going on used lots. In addition, a dealer can extend warranty coverage of a used machine for up to three years.

While it’s not necessarily new, you will find it far easier to lease large and late-model machinery than in the past. 

“It’s a financing option that appeals to certain farmers who are trying to minimize debt,” points out Brad Tolbert of John Deere.

Though it may be stating the obvious, leasing large and late-model machinery is far more affordable than in the past because the base value of the leased machine is lower.

However, as Rick Vacha of Ritchie Brothers Auctioneers warns, don’t wait to pull the trigger on such good deals. “We are already seeing once-large inventories of such combines as the Deere S680 dry up, which is driving up their auction values,” he says. “I certainly expect the same to happen to high-horsepower tractors this winter.”

- Dave Mowitz

Input costs Vary 

Good news: Seed prices have remained fairly steady from 2016 going into 2017.

Bad news: That steadiness doesn’t match the dip in corn and soybean prices from last summer’s spike.  

“The price of some products has gone up; some have gone down. Overall, we are pretty flat from where we were in the past year,” says Jeff Hartz, director of marketing for Wyffels Hybrids. 

The decline in commodity prices has prompted farmers to economy-shop for seed.  

“We have started to see growers become more sensitive to the price of seed and trade down,” says Chuck Lee, head of seed product marketing for Syngenta Seeds. “They are choosing hybrids that have a lower number of traits. Within the same trait class, we have also seen a trend of growers moving into picking the lowest-priced hybrids.”

Cutting traits is a way to save money. Remember, though, that pests such as corn rootworm and European corn borer (ECB) still lurk. 

“Farmers have to be careful that they don’t get into a situation that can backfire,” says Hartz. “We saw some non-GMO fields in eastern Iowa that had an issue with corn borer. We saw that in 2015, too, when corn borer cost farmers 30 to 40 bushels per acre in yield.”

Fertilizer

More good news is that prices for nitrogen (N), phosphorus (P), and potassium (K) plunged to their lowest since 2007 two to three months ago, says David Asbridge, president and senior economist for NPK Fertilizer Advisory Services. 

“We have had way too much capacity across the board with N, P, and K, but they (manufacturers) are beginning to manage it somewhat,” he says. 

"We marketed 1/3 of our 2016 corn production above $4 per bushel." – SW Kansas Farmer

Asbridge says prices will likely remain steady through winter and start rising in March through the end of spring. This coincides with heavy fertilizer use during and shortly after planting. Prices will then drift lower before rising again (albeit at a lower level than in spring) in the fall.  

“At this point, because of overwhelming capacity, we don’t see any big price hike,” he says.

Except . . .

One factor that’s changing the N market is the opening of three large-scale N plants, the first to be built in the U.S. since the 1960s. Last year, CF Industries Holdings, Inc. opened a urea/urea ammonium nitrate (UAN)/anhydrous ammonia plant in Donaldsonville, Louisiana. This firm has expanded a new ammonia plant, followed by a urea synthesis and granulation plant at Port Neal near Sergeant Bluff, Iowa. It wasn’t open at press time but is expected to open any day. Iowa Fertilizer is also building a new anhydrous ammonia/urea/UAN plant in Wever, Iowa, expected to open in mid-February, says Asbridge. 

“If for whatever reason that Wever plant doesn’t open up in mid-February, there could be issues with procurement, particularly urea and also UAN,” he says. That’s why Asbridge is recommending to clients they lock in about 40% to 45% of anticipated urea and UAN needs soon. Anhydrous ammonia supplies should be adequate, he says. 

K and P

Industry overexpansion has throttled down the potash market, with about one half of the Canadian industry shut down, says Asbridge. This – along with a fall run on potash – helped perk up K prices a bit. 

However, the fall run will take some of the pressure off the spring market, he says. 

Mosaic, the biggest U.S. phosphate producer, is reversing its latest slowdown in production. 

Thus, Asbridge is recommending his clients to lock up one third of their phosphate and potash needs by the end of January. 

- Gil Gullickson

Subheading

We may be facing stiff winds, but opportunities fly through agriculture in 2017.

Finding the Blue Sky in Agriculture

Byline:

It’s not reported much, but there is blue sky in agriculture, and we want to explore it.

But first, have you heard of this saying?

The brain is like Velcro for negative experiences, but Teflon for positive ones. Rick Hanson, a psychologist and author, writes about taking in the good. “People will work much harder to avoid losing $100 than they will work to gain the same amount of money.” He adds, “Painful experiences are much more memorable than pleasurable ones.”

Farmers are no different. They can tell you exactly what year they grew their farm’s worst crop, the lowest price they ever took for corn or soybeans, or where they were when the broker called and asked for more margin money for their futures trading account.

There is hope for farmers in Hanson’s message. 

Here’s how to “take in the good” in three simple steps.

  1. Look for good facts and then turn them into good experiences.
  2. Really enjoy the experience. Stay with it for 30 seconds without getting distracted.
  3. Intend and sense that the good experience is sinking into you.

We want to help you take in the blue sky for agriculture in 2017.

After sinking prices in nearly every grain and livestock market in 2016, economists see a return to higher ground.

“The heavy red ink for cattle operations could be behind us, and profits are projected to return to the hog market this spring,” says Lee Schulz, Iowa State University Extension economist. 

Some grain analysts and market watchers see record global demand as poised to dwindle record supplies and to offer opportunities for farmers to sell at profitable levels in mid-2017.

There’s more blue sky. Now may be the time to buy good, used equipment. The outlook for fertilizer prices and cash rent rates point in favor of savings for farmers.

- Mike McGinnis

lower Cash rents

Growers looking for some positive news on the cost side can take heart knowing that, on average at least, cash rents are going down along with the price of commodities. 

Agricultural land rents – both irrigated and non-irrigated – are projected to fall 6% year over year in 2016, according to the U.S. Department of Agriculture. The average value of cropland in the U.S. will fall about 1% to $4,090 an acre, the first decline in seven years, the agency reports. 

The downturn is a marked reversal from gains the past decade when cropland values doubled and cash rents jumped 71%. The falling cost of land – among the only decliners since many other inputs including seed and fertilizer stand fast or rise – likely will continue until crop prices begin to rise, says Jeff Voeks, a market adviser at Stewart Peterson Brokerage Solutions. 

“Cash rent prices will edge lower,” Voeks tells Successful Farming magazine. “To say they’ll fall is overstating it a bit, but I think they’ll continue to eke a little bit lower.” 

While rents are down year over year, corn prices have tumbled about 10% and wheat futures are off by about 20%. Soybean prices are up from last year, but only because they rebounded in the first half of 2016 on weather worries that never materialized. 

Lower rents will help out younger farmers, especially small stakeholders who are trying to expand their holdings or to get started in the industry, says Larry Glenn, an analyst at Prime Ag in Quinter, Kansas. While conventional wisdom would say that now isn’t a good time for a young farmer to jump into the industry, it’s possible that getting in now when rents are low could pay dividends in the future. 

Even large bank- and corporation-owned farms will likely be forced to reduce rents due to extremely low crop prices, though probably not as drastically as small farmer- or family-owned landholders, he says. 

“Big corporate farms are going to want to stay up as high as they can,” Glenn says. “I wouldn’t be surprised,” however, if larger banks or corporations that own farms make adjustments based on the price of grains and soybeans, he says. 

Cash rent prices probably will continue to fall into next year. To offset declining or stagnant crop prices, growers are reportedly saying they’re going to cut back on corn and bean planting, Voeks says. This will only work if they hold true to their word, he says. 

Still, it will take a while to work through the glut of several years’ worth of high yields, which could mean an extended period of low rental prices. 

“Downward pressures likely are being placed on rents,” says Gary D. Schnitkey, a professor in the department of agricultural and consumer economics at the University of Illinois. “Therefore, it is likely that average rents in 2017 will be lower than those for 2016.”

Now is the time in agriculture when farmers should be looking for opportunities, according to Michael Boehlje, Purdue University economist. 

- Tony Dreibus

cheaper iron

 Certainly one of the biggest silver linings in the storm clouds of a depressed farm economy has been the significant savings being offered on late-model, and low-hour machinery. 

Values on high-horsepower tractors, four-wheel drives, combines, self-propelled sprayers, and grain carts are one quarter to one third less than in 2012. 

“I’ve never seen opportunities to buy large machinery at such competitive prices as exist today,” says Jeremy Knuth of Heritage Power, a John Deere dealership out of Baldwin City, Kansas. 

“We are looking to move out built-up inventories, and we are willing to work hard to make a transaction work for an individual farmer’s situation,” Knuth says.

Another hallmark of this massive inventory of late-model machinery is that most of the equipment for sale carries unprecedented low hours. It is not uncommon to uncover a 2014 model year 300-plus-hp. tractor for sale with fewer than 500 hours. 

"Our C-O-P is near $3 with seed down $15 and fertility down $25 per acre." – Central Indiana Farmer

In a recent price comparison of tractors available on dealers’ lots, Successful Farming magazine identified 42 high-horsepower tractors of various makes with fewer than 400 hours. It is not unusual to find 3-year-old machines with only 150 hours. This same situation is well stated in Class 7 and larger combines, as well. 

The poster child of like-new large machinery is the grain cart. A search of John Deere’s dealer website, machinefinder.com, finds 252 large (1,000-plus-bushel) grain carts for sale that are 3 years old or younger. Even more amazing is the number of brand-new carts that are 2, 3, and even 4 years old still sitting on dealers’ lots. For a detailed analysis of large machinery price trends, refer to the December issue of Successful Farming magazine on pages 32-36.

There is another aspect that accentuates the unprecedented value of large and late-model machinery. Manufacturers have armed dealers with an array of financing plans to entice buyers. 

“Whether it’s a certified preowned (CPO) program or low- or no-interest financing, dealers are in a position to reward farmers for buying in ways not available before,” observes Nate Weinkauf of Case IH. These programs commonly inspect used equipment, often making necessary repairs and improvements before going on used lots. In addition, a dealer can extend warranty coverage of a used machine for up to three years.

While it’s not necessarily new, you will find it far easier to lease large and late-model machinery than in the past. 

“It’s a financing option that appeals to certain farmers who are trying to minimize debt,” points out Brad Tolbert of John Deere.

Though it may be stating the obvious, leasing large and late-model machinery is far more affordable than in the past because the base value of the leased machine is lower.

However, as Rick Vacha of Ritchie Brothers Auctioneers warns, don’t wait to pull the trigger on such good deals. “We are already seeing once-large inventories of such combines as the Deere S680 dry up, which is driving up their auction values,” he says. “I certainly expect the same to happen to high-horsepower tractors this winter.”

- Dave Mowitz

Input costs Vary 

Good news: Seed prices have remained fairly steady from 2016 going into 2017.

Bad news: That steadiness doesn’t match the dip in corn and soybean prices from last summer’s spike.  

“The price of some products has gone up; some have gone down. Overall, we are pretty flat from where we were in the past year,” says Jeff Hartz, director of marketing for Wyffels Hybrids. 

The decline in commodity prices has prompted farmers to economy-shop for seed.  

“We have started to see growers become more sensitive to the price of seed and trade down,” says Chuck Lee, head of seed product marketing for Syngenta Seeds. “They are choosing hybrids that have a lower number of traits. Within the same trait class, we have also seen a trend of growers moving into picking the lowest-priced hybrids.”

Cutting traits is a way to save money. Remember, though, that pests such as corn rootworm and European corn borer (ECB) still lurk. 

“Farmers have to be careful that they don’t get into a situation that can backfire,” says Hartz. “We saw some non-GMO fields in eastern Iowa that had an issue with corn borer. We saw that in 2015, too, when corn borer cost farmers 30 to 40 bushels per acre in yield.”

Fertilizer

More good news is that prices for nitrogen (N), phosphorus (P), and potassium (K) plunged to their lowest since 2007 two to three months ago, says David Asbridge, president and senior economist for NPK Fertilizer Advisory Services. 

“We have had way too much capacity across the board with N, P, and K, but they (manufacturers) are beginning to manage it somewhat,” he says. 

"We marketed 1/3 of our 2016 corn production above $4 per bushel." – SW Kansas Farmer

Asbridge says prices will likely remain steady through winter and start rising in March through the end of spring. This coincides with heavy fertilizer use during and shortly after planting. Prices will then drift lower before rising again (albeit at a lower level than in spring) in the fall.  

“At this point, because of overwhelming capacity, we don’t see any big price hike,” he says.

Except . . .

One factor that’s changing the N market is the opening of three large-scale N plants, the first to be built in the U.S. since the 1960s. Last year, CF Industries Holdings, Inc. opened a urea/urea ammonium nitrate (UAN)/anhydrous ammonia plant in Donaldsonville, Louisiana. This firm has expanded a new ammonia plant, followed by a urea synthesis and granulation plant at Port Neal near Sergeant Bluff, Iowa. It wasn’t open at press time but is expected to open any day. Iowa Fertilizer is also building a new anhydrous ammonia/urea/UAN plant in Wever, Iowa, expected to open in mid-February, says Asbridge. 

“If for whatever reason that Wever plant doesn’t open up in mid-February, there could be issues with procurement, particularly urea and also UAN,” he says. That’s why Asbridge is recommending to clients they lock in about 40% to 45% of anticipated urea and UAN needs soon. Anhydrous ammonia supplies should be adequate, he says. 

K and P

Industry overexpansion has throttled down the potash market, with about one half of the Canadian industry shut down, says Asbridge. This – along with a fall run on potash – helped perk up K prices a bit. 

However, the fall run will take some of the pressure off the spring market, he says. 

Mosaic, the biggest U.S. phosphate producer, is reversing its latest slowdown in production. 

Thus, Asbridge is recommending his clients to lock up one third of their phosphate and potash needs by the end of January. 

- Gil Gullickson

Subheading

We may be facing stiff winds, but opportunities fly through agriculture in 2017.

Farmer Up! at the 2017 Commodity Classic

Byline:

Don’t miss your opportunity to learn about the latest developments in agriculture by attending the 2017 Commodity Classic in San Antonio, Texas. On March 2-4, you can hear about the newest innovations and ideas from industry experts. 

The 22nd Annual Commodity Classic is the largest farmer-led, farmer-focused convention and trade show in the nation. Last year, nearly 10,000 people attended this show produced by the National Corn Growers Association, American Soybean Association, National Association of Wheat Growers, National Sorghum Producers, and the Association of Equipment Manufacturers.  

This year, the AG CONNECT Main Stage, sponsored by Successful Farming magazine, will feature industry icons such as consultant Jolene Brown; radio and TV hosts, the Hefty Brothers; and Marji Guyler-Alaniz, the founder of FarmHer. The Main Stage is open to all and will host sessions starting in the afternoon on Thursday, March 2, through noon on Saturday, March 4. (See schedule below.) 

commodity-classic
Always a popular draw, Brown, a farmer, author, professional speaker, and champion for people in agriculture, will share about blazing a trail through agriculture’s “jungle.” “Opportunities abound for agriculture once we realize the pace, the people, the process and the products have all changed. It’s time we discover today’s top influencers on our customers,” says Brown.

Successful Farming magazine editors will host multiple sessions, where you’ll get to hear the latest from Dave Mowitz, executive machinery and technology editor; Laurie Bedord, advanced technology editor; and Jessie Scott, digital content editor; and others. 

Scott will share stories of three farmer veterans, including the Grand Prize Winner of the magazine’s Fighter to Farmer Contest, sponsored by Successful Farming® and Grasshopper Mowers. The contest received more than 120 entries from farmer veterans who served in almost every war and conflict since World War II. In this session, you will also learn about the ways the Farmer Veteran Coalition supports farmer veterans. 

Ray Bohacz, the SF Engine Man, will be a speaker on the AG CONNECT Main Stage, too. He’ll cover what you need to know about diesel fuel and why you should make fluid analysis part of your program. “It is time that we paid as much attention to the machinery as we do other parts of our operation,” says Bohacz. 

Covering two sessions at the AG CONNECT Main Stage is Al Kluis, Successful Farming marketing columnist. Kluis will provide price targets and critical change-of-trend weeks for 2017. Kluis has been a commodity adviser and broker since 1976, and he serves as the president and managing partner of Kluis Commodities in Minnesota. 

Surround yourself with an engaging environment at the convention and trade show. 

For more information about the Farmer Up! 2017 Commodity Classic, visit commodityclassic.com

Farmer Up! at the 2017 Commodity Classic

Byline:

Don’t miss your opportunity to learn about the latest developments in agriculture by attending the 2017 Commodity Classic in San Antonio, Texas. On March 2-4, you can hear about the newest innovations and ideas from industry experts. 

The 22nd Annual Commodity Classic is the largest farmer-led, farmer-focused convention and trade show in the nation. Last year, nearly 10,000 people attended this show produced by the National Corn Growers Association, American Soybean Association, National Association of Wheat Growers, National Sorghum Producers, and the Association of Equipment Manufacturers.  

This year, the AG CONNECT Main Stage, sponsored by Successful Farming magazine, will feature industry icons such as consultant Jolene Brown; radio and TV hosts, the Hefty Brothers; and Marji Guyler-Alaniz, the founder of FarmHer. The Main Stage is open to all and will host sessions starting in the afternoon on Thursday, March 2, through noon on Saturday, March 4. (See schedule below.) 

commodity-classic
Always a popular draw, Brown, a farmer, author, professional speaker, and champion for people in agriculture, will share about blazing a trail through agriculture’s “jungle.” “Opportunities abound for agriculture once we realize the pace, the people, the process and the products have all changed. It’s time we discover today’s top influencers on our customers,” says Brown.

Successful Farming magazine editors will host multiple sessions, where you’ll get to hear the latest from Dave Mowitz, executive machinery and technology editor; Laurie Bedord, advanced technology editor; and Jessie Scott, digital content editor; and others. 

Scott will share stories of three farmer veterans, including the Grand Prize Winner of the magazine’s Fighter to Farmer Contest, sponsored by Successful Farming® and Grasshopper Mowers. The contest received more than 120 entries from farmer veterans who served in almost every war and conflict since World War II. In this session, you will also learn about the ways the Farmer Veteran Coalition supports farmer veterans. 

Ray Bohacz, the SF Engine Man, will be a speaker on the AG CONNECT Main Stage, too. He’ll cover what you need to know about diesel fuel and why you should make fluid analysis part of your program. “It is time that we paid as much attention to the machinery as we do other parts of our operation,” says Bohacz. 

Covering two sessions at the AG CONNECT Main Stage is Al Kluis, Successful Farming marketing columnist. Kluis will provide price targets and critical change-of-trend weeks for 2017. Kluis has been a commodity adviser and broker since 1976, and he serves as the president and managing partner of Kluis Commodities in Minnesota. 

Surround yourself with an engaging environment at the convention and trade show. 

For more information about the Farmer Up! 2017 Commodity Classic, visit commodityclassic.com

Farmland Values Continue to Slide Downward

Byline:

Midwest farmland values are in the longest and sharpest decline since the mid-1980s agricultural recession. Lenders and analysts expect the slide to continue a year or two. “This is consistent with stagnant corn and soybean futures prices and a potential rise in interest rates,” says Iowa State University’s Wendong Zhang in releasing a survey showing land values in Iowa are down by 17.5% in three years.

The Chicago Federal Reserve Bank says the value of good-quality farmland fell by 3% in the year ending last October 1, according to its survey of farm bankers, who expected a further decline this winter. In the Chicago Fed’s district, land values fell the furthest in Michigan, Iowa, and Illinois. The drop in land values during the third quarter of 2016 “marked the fourth straight quarter of year-over-year declines ... the first time for such a streak since 1986-1987,” it says.

In the Central and Southern Plains, farmland values are 6% lower than a year ago, says the Kansas City Fed, and the year-on-year decline in autumn 2016 was the sharpest since the mid-1980s. In a regional Fed survey, ag lenders say they expect farm income, land values, and loan repayment rates to fall in coming months. “If these expectations hold, the slow but steady increase in farm financial stress appears likely to continue,” says the Kansas City Fed.

While Farm Belt land values reacted almost immediately to the 2013 collapse of the ag boom, the national average has been slower to respond. U.S. cropland values peaked at $3,020 an acre in 2015 and declined marginally to $3,010 an acre last year, according to USDA.

This article was produced in collaboration with the Food & Environment Reporting Network, an independent, nonprofit news organization producing investigative reporting on food, agriculture, and environmental health.

FERNlogo

Farmland Values Continue to Slide Downward

Byline:

Midwest farmland values are in the longest and sharpest decline since the mid-1980s agricultural recession. Lenders and analysts expect the slide to continue a year or two. “This is consistent with stagnant corn and soybean futures prices and a potential rise in interest rates,” says Iowa State University’s Wendong Zhang in releasing a survey showing land values in Iowa are down by 17.5% in three years.

The Chicago Federal Reserve Bank says the value of good-quality farmland fell by 3% in the year ending last October 1, according to its survey of farm bankers, who expected a further decline this winter. In the Chicago Fed’s district, land values fell the furthest in Michigan, Iowa, and Illinois. The drop in land values during the third quarter of 2016 “marked the fourth straight quarter of year-over-year declines ... the first time for such a streak since 1986-1987,” it says.

In the Central and Southern Plains, farmland values are 6% lower than a year ago, says the Kansas City Fed, and the year-on-year decline in autumn 2016 was the sharpest since the mid-1980s. In a regional Fed survey, ag lenders say they expect farm income, land values, and loan repayment rates to fall in coming months. “If these expectations hold, the slow but steady increase in farm financial stress appears likely to continue,” says the Kansas City Fed.

While Farm Belt land values reacted almost immediately to the 2013 collapse of the ag boom, the national average has been slower to respond. U.S. cropland values peaked at $3,020 an acre in 2015 and declined marginally to $3,010 an acre last year, according to USDA.

This article was produced in collaboration with the Food & Environment Reporting Network, an independent, nonprofit news organization producing investigative reporting on food, agriculture, and environmental health.

FERNlogo