August 31, 2016

Low Returns, Crop Prices Keeping Pressure on Farmland Values



(Boone, IA, August 31, 2016) – Illinois farmland values continued their pullback around the state during the first half of 2016 as prices retraced between an estimated 3.3 percent and 7 percent. Continued low net returns and softening commodity prices are cited as the primary cause of the decrease. This is according to the Mid-Year “Snapshot Survey” information gathered by the Illinois Society of Professional Farm Managers and Rural Appraisers as well as the Illinois Farm and Land Chapter of the REALTORS® Land Institute (RLI). The data analysis is provided by Gary Schnitkey, Ph.D., with the University of Illinois College of ACES. The survey is part of an ongoing and larger annual Land Values and Lease Trends project conducted by the Society.

The survey results were released today at the Farm Progress Show being held in Boone, IA.

According to the survey, below $4 per bushel prices paid for corn are expected to continue into 2017 with some decreases in production costs expected. Cash rents paid are also expected to drop about $20 per acre.

Farmland Values and Volumes
Survey respondents indicated that land values decreased 3.3 percent for Excellent-quality farmland; decreased 4.5 percent for Good-quality land; 5.6 percent of Average-quality land; and dropped 7.0 percent for Fair- quality land.

(In a normal year, Excellent- quality farmland averages over 190 bushels of corn per acre, Good- quality farmland averages between 170 and 190 bushels per acre, Average- quality farmland averages between 150 and 170 bushels per acre, and Fair- quality farmland averages below 150 bushels per acre. )

Respondents estimated prices paid for Excellent-quality farmland during the first half of 2016 averaged $11,100 per acre; $9,400 for Good land; $7,600 for Average-quality land; and $5,800 for Fair-quality farmland. Sixty three percent of those responding to the survey reported that less farmland was sold during the year and 85 percent expect the same amount of land, or less, to be available for sale in 2017. Typical buyers (64 percent) continue to be other farmers and there are no expectations of significant changes in this.

Respondents indicate they are split on whether there will be the same or more demand for land with 48 percent expecting there will be some decreases in demand and 51 percent anticipating no change or a very slight increase.

Price Expectations
Overall, respondents are more pessimistic about prices at midyear this year compared to recent surveys with a full 90 percent expecting some further decreases in values ranging from 1 percent to 10 percent. Corresponding decreases on per-acre-return are also forecast with 49 percent expecting a drop between $25 and $50 per acre and 16 percent predicting decreases of more than $50 per acre. A mere 2 percent expect returns to increase and then only very modestly.

Cash Rents
While a full 93 percent expect corn yields to be above average they expect the price for corn to be around $3.45 per bushel. A full two-thirds of respondents expect a ‘slight’ decrease in production costs. All of this leads to expectations that cash rents will continue their decline along the lines of land productivity.

Expected rents for 2017 for Excellent- and Good-quality land are expected to decrease by 7 percent; 9 percent for Average land; and 6 percent for Fair farmland.




Currently the most popular type of lease arrangement is for Cash Rent (32 percent) followed by Share Rent (29 percent), Variable Cash Rent (20 percent), Modified Share Rent (12 percent) and Custom Farming (7 percent). Respondents indicate Share Rent leases and Fixed Cash Rents will decrease in use while Variable Cash Rents will become more popular.

The ISPFMRA will be conducting its annual Land Values and Lease Trends Survey over the upcoming winter months. The results of this larger survey will be released at the 2017 Illinois Land Values Conference set for March 23, 2017 at the DoubleTree by Hilton in Bloomington, IL.


August 30, 2016

TellusLabs Labs Corn Yield Model Startup

David Potere, CEO & co-founder of TellusLabs, talks about its business and yield models with University of Illinois Extension Farm Broadcaster Todd Gleason on WILLAg.org's Closing Market Report.


August 26, 2016

Pro Farmer Midwest Crop Tour Results

 



PRESS RELEASE 

Pro Farmer U.S. 2016 Corn and Soybean Crop Estimates

August 26, 2016 01:30 PM
By Pro Farmer Editors

Corn: 14.728 billion bu.; Average yield of 170.2 bu. per acre
Corn /- 1% = 14.875 billion bu. to 14.581 billion bu.; 171.9 bu. to 168.5 bu. per acre

Soybeans: 4.093 billion bu.; Average yield of 49.3 bu. per acre
Soybeans /- 2% = 4.175 billion bu. to 4.011 billion bu.; 50.3 bu. to 48.3 bu. per acre

Note: These estimates are based on assumptions for normal weather through September. With a normal finish to the growing season, the soybean crop stands to benefit more from weather than corn. Rains rolled across the Corn Belt during Crop Tour. When we get our boots wet when sampling fields on Crop Tour, it’s typically a good thing for the soybean crop. Much of the corn crop is too advanced in maturity to benefit much if late-season weather is favorable. We made no adjustments to harvested corn or soybean acres.

Corn
Ohio: 154 bu. per acre. We didn’t find as much corn in Ohio as USDA did with its August survey work. The northwestern portion of the state showed the impacts of too much water in the spring, followed by a dry June.

Indiana: 174 bu. per acre. We found the Indiana crop vastly improved from year-ago. Portions of eastern Indiana have some “problem” areas, but yield prospects are strong in the western portion of the Hoosier state.

Illinois: 194 bu. per acre. Illinois has a great corn crop, but it’s not as good as 2014 when the state yielded 200 bu. per acre. This year’s crop isn’t as uniform as two years ago through the areas we sampled and southern portions of the state will pull down the statewide yield, unlike 2014.

Iowa: 193 bu. per acre. The Iowa corn crop is also very good, but not quite as good as its neighbor to the east. Yields were more variable in Iowa than in Illinois. Plus, stalk quality concerns could cost some producers yield.

Minnesota: 175 bu. per acre. The Minnesota corn crop was a disappointment. The crop showed impacts from the May 15 frost and three weeks of heat in late June/early July.

Nebraska: 179 bu. per acre. We found irrigated corn disappointing in the Husker state. South-central and southeastern areas are dealing with a lot of lodging and green snap.

South Dakota: 142. bu. per acre. Southeastern portions of the state got their crop planted late due to excessive spring precip. Once the crop was finally in the ground, conditions turned dry. Crop maturity has been pushed.


Soybeans
Ohio: 50 bu. per acre. While the crop has moisture to finish, pod counts were down 6.2% in our Tour samples. With the crop done flowering, what you see is what you get for pods.

Indiana: 55 bu. per acre. Pod counts in Indiana were up 7.8% from year-ago. The crop has plenty of soil moisture to fill pods and finish strong.

Illinois: 58.5 bu. per acre. The soybean crop in Illinois was exceptionally tall. While tall beans don’t always produce big yields, the Illinois soybean crop has plenty of pods and moisture to push above USDA’s August estimate.

Iowa: 58.5 bu. per acre. Iowa has potential to have a very big soybean crop. But Sudden Death Syndrome and other diseases will be an issue for some producers in eastern Iowa. That could keep yields from creeping higher.

Minnesota: 48 bu. per acre. We found a relatively consistent soybean crop in southern Minnesota. Unlike many other areas of the Corn Belt, Minnesota’s soybeans aren’t exceptionally tall, but they podded well.

Nebraska: 59 bu. per acre. The soybean crop in Nebraska is really tall, but is also heavily podded. In a change from recent years, water hemp is not a major problem across the state and shouldn’t be a yield robber this year.

South Dakota: 42 bu. per acre. The South Dakota soybean crop was tall and the distance between nodes was wide. That kept the crop from being heavily podded. On a positive note, the South Dakota soybean crop is free of disease or weed pressure.


August 17, 2016

Governor Rauner Announces Illinois State Fair Foundation

The Illinois State Fair has a new funding source. Governor Bruce Rauner has announced the creation of the Illinois State Fair Foundation. He says it is a non-governmental, non-political, privately run 501c3 Not-for-Profit to be operated by farmers and community leaders.



The private foundation was created after the Illinois state government failed to pass legislation last year to create a similar board. The private foundation will work to restore and maintain the Illinois State Fair in Springfield, and the DuQuoin State Fair in the southern part of the state.


August 16, 2016

Illinois State Fair Sale of Champions

Illinois Governor Bruce Rauner purchased the Grand Champion Steer at the Illinois State for a record setting $104,000.

Illinois State Fair Press Release
SPRINGFIELD, Ill. - "This is the showcase for Illinois agriculture... the Super Bowl for 4-H and FFA exhibitors" -Orion Samuelson  

The Governor's Sale of Champion has always been the crown jewel of agricultural events at the Illinois State Fair, and this year was no exception. For the second year in a row, the sale was held in the Coliseum.  This grand venue serves as the pinnacle forum for an ag exhibitor.   

Capping the night off was the sale was the Grand Champion Steer owned by Lucas Wisnefski. Wisnefski's steer sold for a record $104,000 to Governor and Mrs. Bruce Rauner and Friends of Wisnefski.  When asked about what advice he would give to future state fair exhibitor, Wisnefski said, "Keep your dreams. I had a dream to win the State Fair, and now my dream has come true." He credits his win to hard work and dedication. Wisnefski plans to use the prize money to further his education.  

The money raised at Tuesday night's auction helps to support Illinois agriculture.  The junior exhibitors who raised the champion animals receive 80 percent of the funds with the remaining 20 percent to be split equally between the Illinois 4-H Foundation and Illinois FFA. 
 


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