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Farmland Values Continue Rising
Published: Friday, June 28, 2013 On the whole, “good” farmland values kept rising in the Seventh Federal Reserve District during the first quarter of 2013, but signs of moderation in farmland value gains emerged. Agricultural land values appreciated 4 percent in the first quarter of 2013 relative to the fourth quarter of 2012, based on the survey responses of 219 district agricultural bankers. This quarterly increase was smaller than that of the previous survey. That said, the year-over-year increase in agricultural land values was 15 percent in the first quarter of 2013, nearly matching the annual gain of 2012. Both the district’s quarterly and year-over-year increases in farmland values masked the weaker results of some areas, such as Wisconsin. Demand to purchase agricultural land increased in the three- to six-month period ending with March 2013 compared with the same period a year ago. Similarly, the number of farms sold, the amount of acreage sold, and the amount of farmland for sale rose during the winter and early spring of 2013 compared with a year ago. Additionally, farmland cash rental rates in the district were 11 percent higher in 2013 compared with 2012. With regard to agricultural land values during the second quarter of 2013, over three-quarters of the responding bankers expected them to be stable. Credit conditions continued to improve for agricultural producers. Both the index of availability of funds to lend and the index of repayment rates for non-real-estate farm loans moved up, although they did not reach their peaks. In addition, fewer renewals and extensions of these loans indicated improvement in credit conditions. Yet, the index of demand for non-real-estate loans in the first quarter of 2013 fell to its lowest level since 1986. At 63.7 percent, the average loan-to-deposit ratio had not been lower since 1994. Interest rates on farm loans moved down further to new lows for the survey. Farmland Values District agricultural land values rose 4 percent in the first quarter of 2013 relative to the fourth quarter of 2012, easing down from the quarterly increase of last year’s final quarter. However, the year-over-year increase in district farmland values was 15 percent in the first quarter of 2013, almost matching the annual gain of 2012. Furthermore, the district’s quarterly and year-over-year gains in agricultural land values masked the weaker results of some areas (see table). Most notable was a 3 percent drop in Wisconsin’s farmland values in the first quarter of 2013 from a year ago. That said, the year-over-year and quarterly gains in agricultural land values for Michigan were higher than the strong gains of the previous quarter. For Illinois and Iowa, the increases in farmland values on a year-over-year basis were close to those of the previous quarter, although these district states’ quarterly increases were softer than those of the last quarter. There was higher demand to purchase farmland in the three- to six-month period ending with March 2013 compared with the same period a year ago; 59 percent of the survey respondents observed higher demand to purchase farmland, while only 1 percent observed lower demand. The supply of farmland was higher too: There was an increase in the amount of farmland for sale over the winter and early spring relative to a year ago, as 37 percent of the responding bankers reported more farmland was up for sale in their areas and 28 percent reported less. Similarly, the number of farms and amounts of acreage sold increased over the winter and early spring relative to a year ago. A little over one-third of survey participants reported that farmers increased their share of farmland acres purchased (relative to investors) in the three- to six-month period ending in March 2013 versus the same period a year earlier; 3 percent said farmers decreased their share; and 62 percent saw no change. District cash rental rates for agricultural land in 2013 were up 11 percent from 2012 (this annual increase was smaller than those of the past two years). Over the same period, farmland cash rental rates were up 9 percent in Illinois, 11 percent in Indiana, 13 percent in Iowa, 2 percent in Michigan and 12 percent in Wisconsin. District cash rental rates increased almost 10 percent from 2012 when adjusted for inflation using the Personal Consumption Expenditures Price Index; this result was the fourth-largest increase in farmland cash rental rates in the history of the survey. The string of strong advances in farmland cash rental rates propelled their inflation-adjusted index past its previous peak. Similarly, the index of agricultural land values has established new records every year since 2011. Historically, changes in cash rental rates have tended to trail those in farmland values, so not surprisingly, the equity derived from the land outpaced the income from cash rents in 2013. Rising cash rental rates and farmland values reflected higher crop prices. Prices in the first quarter of 2013 averaged $7.06 per bushel for corn and $14.47 per bushel for soybeans, according to the U.S. Department of Agriculture. In the first quarter of 2013, corn prices and soybean prices increased 2.5 percent and 1.4 percent, respectively, from the fourth quarter of 2012; corn prices grew 13 percent and soybean prices grew 17 percent compared with a year ago, as tight stocks and uncertainty about the weather boosted prices. Moreover, at the end of the first quarter of 2013, $16.1 billion had been paid out for insured 2012 agricultural losses across the U.S., of which $6.66 billion went to producers in the five district states (41 percent of the U.S. total). These factors bolstered farmland values and cash rents while enhancing agricultural credit conditions in the first quarter of 2013. Credit Conditions Agricultural credit conditions improved in the first quarter of 2013 compared with the first quarter of 2012. At 161, the index of funds availability nearly matched last year’s record, with 61 percent of the survey respondents reporting their banks had more funds available to lend and under 1 percent reporting their banks had less. The index of repayment rates for non-real-estate farm loans moved up to 143 for the first quarter of 2013—its highest value since setting a new high a year ago; 47 percent of the responding bankers reported higher rates of repayment and 4 percent reported lower rates. Thirty-five percent of the survey respondents observed fewer loan renewals and extensions over the January through March period of 2013 compared with the same period last year, while 5 percent observed more of them. Continue reading
Obama Delivers Renewed Renewable Energy Support For The US
27 June 2013 One of the most powerful people on Earth, US President Barack Obama, gave a passionate address on climate change on 25 June during a visit to Georgetown University in Washington DC. Obama wants to cut carbon pollution and reduce global warming and told an audience of students and visitors: ‘I refuse to condemn your generation, and future generations, to a planet that is beyond fixing.’ Among broad measures outlined, Obama wants to see a reduction in greenhouse gas (GHG) emissions and the promotion of renewable energy while aiming to hit a 17% cut in carbon emissions recorded in 2005 by the end of this decade. He also took the brave decision to bypass a Congress stuck in stalemate to issue an executive memo to the Environmental protection Agency (EPA)calling for new rules for power plants to limit GHG emissions. The transportation sector has seen calls for further increased fuel economy standards for heavy duty trucks, with the plan also stating ‘biofuels have an important role to play in increasing our energy security, fostering rural economic development and reducing GHG emissions from this sector’. The action plan also reaffirms the Obama administration’s support of the Renewable Fuel Standard (RFS) and points to investment by the government into research and development for next-generation biofuels. The Advanced Ethanol Council (AEC) says the advanced ethanol industry stands behind the Obama administration in its effort to combat climate change. ‘The President is right to identify the renewable fuel standard and existing federal regulations as critical to the effort to reduce greenhouse gas emissions from the energy sector,’ states AEC executive director Brooke Coleman. ‘Pound for pound, advanced ethanol is the most carbon reductive alternative to gasoline in the world and the RFS is driving the commercial deployment of our industry.’ Furthermore, the action plan informs that the US has more than doubled electrical generation from renewable sources during Obama’s first term, and he hopes to do the same again by 2020. To help achieve that target, the Department of the Interior has been directed to approve 10GW of new renewable capacity by 2020. The plan also notes the Department of Defense is committed to deploying 3GW of renewable energy on military installations by 2025, including biomass. ‘There are two major areas where this administration’s aid can make a big difference for the biomass industry,’ Bob Cleaves, president of the Biomass Power Association, was quoted as saying. ‘The first would be a commitment to the use of federal lands for renewable energy production and, secondly, a confirmation of biomass’ value as a renewable energy source.’ Federal agencies are also setting a new goal to reach 100MW of installed renewable capacity across the federally subsidized housing stock by 2020. – See more at: http://www.bioenergy…h.CWQL39Nk.dpuf Continue reading
Biomass Of Northern Hemisphere Forests Mapped
ANI inShare Washington, June 27 (ANI): Thanks to satellites, the biomass of the northern hemisphere’s forests has been mapped with greater precision to help improve our understanding of the carbon cycle and our prediction of Earth’s future climate. Accurately measuring forest biomass and how it varies are key elements for taking stock of forests and vegetation. Since forests assist in removing carbon dioxide from the atmosphere, mapping forest biomass is also important for understanding the global carbon cycle. In particular, northern forests – including forest soil – store a third more carbon stocks per hectare as tropical forests, making them one of the most significant carbon stores in the world. The boreal forest ecosystem – exclusive to the northern hemisphere – spans Russia, northern Europe, Canada and Alaska, with interrelated habitats of forests, lakes, wetlands, rivers and tundra. With processing software drawing in stacks of radar images from ESA’s Envisat satellite, scientists have created a map of the whole northern hemisphere’s forest biomass in higher resolution than ever before – each pixel represents 1 km on the ground. “Single Envisat radar images taken at a wavelength of approximately 5 cm cannot provide the sensitivity needed to map the composition of forests with high density,” Maurizio Santoro from Gamma Remote Sensing said. “Combining a large number of radar datasets, however, yields a greater sensitivity and gives a more accurate information on what’s below the forest canopy,” Santoro said. About 70 000 Envisat radar images from October 2009 to February 2011 were fed into this new, ‘hyper-temporal’ approach to create the pan-boreal map for 2010. This is the first radar-derived output on biomass for the whole northern zone using a single approach – and it is just one of the products from the Biomasar-II project. (ANI) Continue reading
