Tag Archives: green
Natural Resources Canada Awards Funding To Biomass Projects
Taylor Scott International Continue reading
Iowa Farms Worth Double Since 2008
Biannual survey shows crop land values continue to rise May 5, 2013 Farmland property values have risen 17 percent in the past year, according to the Iowa Chapter of Realtors Land Institute survey. The survey estimates the value of bare, unimproved land through a survey of land institute members, financial institutions that approve agricultural lending and rural appraisers. Kyle Hansen, president of the Iowa chapter of the Realtors Land Institute, said per-acre values for tillable cropland have more than doubled since March 2008, increasing from $4276 and acre to $8,691 an acre on average. Prices in northwest region are growing, hitting $13,387 per tillable acre. Article Photos AP PHOTO A survey released at the end of March shows that cropland, like the land shown here in the file photo, has increased in value over the past six months, more than doubling since 2008. The central Iowa region exceeded the state average for per-acre value in high, medium and low-quality cropland. “They have seen a larger increase because of ethanol and direct competition in that area,” Hasen said. The land institute also requested pasture and timberland values as supplemental information. Every six months, the institute conducts the survey and gives a percent increase from the previous six months. Central Iowa’s land values increased 8.5 percent in the past six months, according to the survey released at the end of March. Central Iowa’s increase was just below the 9.4 percent increase statewide, but the report shows that each of the nine districts showed an increase. Over the past few years, however, Hansen said the areas that see the largest increase vary between surveys, meaning that no region of the state is growing at a faster rate than the others. Mike Duffy, an economist at Iowa State University who helps conduct the state land value survey, said farmland values are high in both nominal and inflation-adjusted terms. The primary reason is the success farming has seen since the 2006 Energy Policy Act, which mandated the use of ethanol in gasoline. That mandate resulted in farmers having more money to spend, and farmers typically invest their money in accumulating more land, Duffy said. The success of ethanol will depend largely on the price of oil. Concerns over a collapse in land values, should the government cease subsidizing ethanol, will only prove valid if producing ethanol proves more costly than producing oil in the free market. Growth in India and China also contributes to a rise in the sale of corn to feed animals, Duffy said. “As their incomes improve, their diets improve,” he said. “More money means more meat. More meat means more sales.” A downside to the increase in land value, Duffy said, is that it makes carving out a niche more difficult for upstart farmers because established farmers are buying all the available land, making land more expensive because of its increased scarcity. According to the survey, central Iowa exceeded the state average in per-acre value of high, medium and low-quality cropland. The region fell just shy of meeting the state average for nontillable pasture and timber per acre. Continue reading
Agricultural Insights From The Southeastern U.S.
The following writing by Teri Gafford was published by the Federal Reserve Bank of Atlanta today. Her summary of their Birmingham Branch’s recent agricultural meeting is insightful and points to a few emerging trends, some of which apply to areas other than the Southeastern U.S., too.—K.M. Food for Thought I admit it. No matter how much I try, I do not have a green thumb, and woe to any houseplant (or outdoor plant, for that matter) that makes its way into my care. With that said, you might be surprised to learn that I serve as the Atlanta Fed’s lead agriculture analyst. My duties include meeting with some pretty savvy folks in the field of agriculture. The Birmingham Branch of the Federal Reserve Bank of Atlanta hosts the Sixth District’s Agriculture Advisory Council and we recently convened the first of our two meetings of 2013. Here are some of the meeting’s highlights: High commodity prices have resulted in many producers having record revenues although increasing input costs continue to challenge margins. Agriculture producers are turning more and more to technology and other capital investments to improve production and reduce the need for manual labor. As an example, the cost to plant Miscanthus giganteus (a large, perennial grass hybrid used for biofuel production) can fall from $1,400 to $400 per acre by using a newly developed mechanical planter. Other contacts report that more advanced equipment entering the market is twice as productive as older versions, thus reducing both labor and fuel costs. The two most prevalent labor topics discussed were the continued importance of the guest worker program and the uncertainty associated with the costs and effects of the Affordable Care Act. Council members were heartened that the current immigration bill being debated recognizes the agriculture sector’s need for migrant labor. One of the biggest surprises in the conversation is that there is a real increase in the number of young people entering the field of agriculture. “They are coming back to the farm” with college degrees and enthusiasm, one Council member said, adding that these young people are “well educated, globally market savvy, and ready to take calculated risks.” When the discussion turned to productivity, it was enthusiastically agreed that there are still significant productivity gains to be had in agriculture. “What robotics did for manufacturing will be replicated in agriculture,” was a comment supported by all members. Farmland values continue to rise, supported by both low interest rates and high commodity prices. Council members noted that nonfarming investors are purchasing farmland and farmers are buying adjacent properties to expand. Because of continued uncertainties (commodity prices, low interest rates, and government agricultural policy) typical land leases, which used to be three to five years in duration, are now being let for one-year contracts. Overseas markets are driving up global demand for protein products, which in turn increase prices for U.S. consumers. Reduced supply may also be affecting beef prices as many cattle producers reduced their herd size because of the combination of last year’s drought and high feed prices. (Because it was so expensive to feed them, more head went to market.) The effect of citrus greening, a deadly disease that has done great harm to the Florida citrus industry, continues to concern Florida orange and grapefruit growers. A lot of ongoing research is dedicated to finding a genetic solution for this problem. Lumber prices are approaching 2004–05 levels as a result of growing demand (improving housing market and the demand for new homes) and tight supplies. Cotton producers are watching China’s large cotton inventory; releasing that supply into the market could have adverse effects on cotton prices. Issues surrounding both the use of genetically modified organisms globally and labeling requirements continue to be discussed, and resolutions to both issues will be economically important. We will continue to reach out to our contacts in the agriculture sector, especially our Advisory Council, for their continued insight. And I’ll continue to watch, like all of you, how agriculture prices move. There’s a lot to that story. By Teri Gafford, a Regional Economic Information Network director in the Atlanta Fed’s Birmingham Branch Continue reading
