More Women Attending Long Running Land Values Conference
By Madeline Schultz
“The Farm Bill is the world’s largest conservation program covering 140 million acres or 15 percent of all farmland in the United States,” stated Dr. John Newton, Chief Economist at the American Farm Bureau Federation. Speaking at the 92nd Annual Soil Management and Land Valuation Conference at Iowa State University on May 15, 2019, Dr. Newton explained only 50% of the nation’s conservation requests were approved in 2018. “Farmers want to be conservationists,” he added.
Dr. Newton keynoted the recent conference with 270 attendees from across the Midwest. The annual event, chaired by Dr. Wendong Zhang, Iowa State University Assistant Professor of Economics, has the distinction of being Iowa State University’s longest continuously running conference. It was great to see more women farmers and women in agribusiness attend the conference this year.
As Dr. Newton discussed the agricultural economy in the U.S., he told the audience net farm income in 2013 was in the top 10 percent of all time, while net farm income for 2017-2019 is in the bottom 20 percent of all time. In nominal dollars, unadjusted for inflation, national farm income dropped $54 Billion or 44 percent since 2013. “We are not going back to higher prices, there are no golden years ahead,” stated the economist. Even so, farm income is expected to rebound modestly in 2019, especially in the livestock sectors. Dr. Newton said dairy and conservation were among the winners in the 2018 Farm Bill. Iowa native and U.S. Undersecretary of Agriculture, Bill Northey, created a website to make more information about the Farm Bill available to farmers at www.farmers.gov.
Prior to the conference, more than 150 agricultural professionals provided their estimates of future land values thru an online survey. Dr. Zhang provided an overview of these forecasts, and shared perspectives on future land and crop markets as well as risk management strategies. “The agricultural professionals expected an immediate, modest decline in land values by about 2 percent, followed by stable to slightly rising land markets,” stated Dr. Zhang. Interest rates, commodity prices, trade, livestock and weather were the key factors cited for determining land values. Click here to learn more about all of the conference topics and presentations.
“Forward thinking farmers are on Twitter. If you’re not on Facebook and Twitter, start using it; if you’re on it, figure out a way to use it more,” shared Willie Vogt, Executive Director of Content User Engagement at Farm Progress. Women over 80 years old own about 13 percent of Iowa farmland. “These women have grandchildren helping them and they are using Twitter to keep up on the planting season,” added Willie. He spoke about key developments in agricultural technology. The new soil sensors are about $100.00 and install quickly. With just enough precision to make in-season management decisions possible, they are a good investment. Genomic precision is possible with gene editing and offers 90 percent predictability in seed traits. The USDA does not require new regulations for this technology. Gene editing is here now and it can make a huge difference towards feeding 9 Billion people in 2050. “Bring on the robots,” stated Willie, “We can benefit from less labor, lower field compaction, and more in-season action.”
A panel of agricultural professionals discussed asset values. Scott Steffes’ family has been involved in the machinery auction business since 1960. The business started online bidding in 1997 and today 53 percent of sales are online. While used machinery prices dropped in half between 2013 and 2016, prices in 2018 were well above 2016 levels. “There is a tremendous market valuation in farm machinery at 50 percent of what it costs to replace with new,” stated Scott. He cautioned everything could change as historic weather events continue to cause stress in the farm economy.
The Chief Appraiser with Farm Credit Services of America, Kirk Manker, reported on trends in farmland value. While the five-year trend is still downward, the ten-year trend for land prices shows a gain of 68 percent. “Farmland sentiment is still strong. People want to invest in land and that is keeping land prices stronger,” stated Kirk. “That could change if interest rates go up.”
Mark Anderson is the Regional Manager for the Iowa Division of Banking. “Overall, banks in Iowa are sound and have a strong commitment to agriculture,” stated Mark. The volume of land loans are going up and cash flow is a concern. Mark’s advice for farmers is, “Evaluate cash flow under stressed conditions, be proactive, and make adjustments as needed.”
Five major flooding events occurred in Iowa between March 12 and May 15, 2019. “We are weary,” stated Dr. Elwynn Taylor, Iowa State University Professor Emeritus of Agronomy and Climatologist. Since 1950, water flow in the Nishnabotna River at Hamburg, IA doubled and the river is over the banks five times more often. “The situation is common with other Iowa rivers,” stated Dr. Taylor. While the state is getting wetter, temperatures are stable. Since 1890, the average August 1 temperatures have been very consistent. If the 89-year Gleissburg Cycle predictions are accurate, we could see major droughts across much of the Midwest in 2024 to 2025. Dr. Taylor also discussed how changing weather patterns and other factors caused a gradual westward and northward shift of the geographic center of the Corn Belt. In the 1950’s, Springfield, Illinois was the center of corn production. Today, North English, Iowa has that title.
“Iowa is one of nine states in the U.S. with more cattle than people,” stated Dr. Dan Loy. “The cattle and calves in Iowa account for 15 percent of beef production in the U.S.” Dr. Loy is an Iowa State University Professor of Animal Science and Director of the Iowa Beef Center. With more than 24,000 beef producers in the state, one in three Iowa farms is involved in the industry. Major feedlots are those with more than 500 head. Northwest Iowa has half of all major feedlots in the nation. Other states have larger feedlots, putting Iowa number four in cattle feeding behind Texas, Nebraska and Colorado. A 2017 study of the Economic Importance of Iowa’s Beef Industry identified potential for growth in the industry. Iowa’s cattle producers are well positioned to benefit from increased cover cropping and interest in putting sensitive land back into pasture. High quality genetics and lower feed costs in the state translate to heavier finished weights and a higher percentage of Prime carcasses, earning premium pricing. The Iowa Beef Industry Center’s new report on Iowa Cow-Calf Production – Exploring Different Management Systems is available online.
Click here to learn more about the conference topics and presentations.