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Agriculture News

Agricultural Credit Market Update

Farm Doc Daily | Posted on January 14, 2017

The continued "margin squeeze" faced by crop producers across the Midwest has led to a drastic reduction in working capital buffers. As a result, many grain farmers may seek additional debt capital to carry out marketing and production plans, to finance their capital base, or to provide short-run liquidity. From the lender's perspective, the continued margin squeeze also signals increasing risk for farm loan repayment, and as a result, farms should expect increased scrutiny in securing new or renewed lines of credit.  Agricultural credit market data provide modest signals of increasing credit risk. Farm loan data provided by the Federal Reserve indicate that farm loan delinquencies have increased in recent quarters from recent record lows. In addition, overall risk ratings for agricultural loans are also on the rise. Surveys of agricultural bankers conducted by the two Federal Reserve Districts that serve Illinois, Chicago and St. Louis, both demonstrate deteriorating credit conditions over the last few years. A growing share of lenders report increasing loan repayment concerns coupled with an increase in requests for loan renegotiations. In addition, the surveys also suggest agricultural bankers are facing increased agricultural loan demands. Finally, both Federal Reserve banks report modest increases in the cost of borrowing for both operating and real estate farm loans. In addition, the Federal Reserve continues to signal a likely interest rate increase in the near term. While inflation remains below the Fed's long run policy target of 2%, unemployment is currently at or near target levels. Finally, many macroeconomists fear that the current low interest rate environment severely limits the Fed's ability to respond to a potential economic recession in the future. In sum, the current economic climate suggests that interest rates are likely to increase in the near future. This would have direct repercussions for farm borrowing, as agricultural interest rates are highly correlated with the federal funds rate.

Water, taxes and regulations dominate state legislatures

Capital Press | Posted on January 14, 2017

n Oregon, a $1.8 billion budget gap will force legislators to look for more revenue — taxes and fees — or cut services. The gap, caused by runaway state employee health care and retirement costs, will force lawmakers to make hard choices as the administration of Gov. Kate Brown settles in for the next two years.  In Idaho and Washington, water issues have floated to the top of the legislative agendas. In Idaho, replenishing the Snake River aquifer that feeds farms and ranches in the eastern part of the state and protecting water rights will take center stage.  In Washington, a different water issue has rural landowners wondering whether they can afford to drill wells as legislators seek a way to accommodate a recent court ruling. The ruling requires landowners to prove new wells won’t hurt water sources needed to maintain fish populations. At the same time, Gov. Jay Inslee will continue to his push for a controversial carbon tax as a way to bolster the state budget. Though water is always an issue to California, the most productive agricultural state in the nation, regulations on overtime for farmworkers and a spate of other issues that impact farmers will continue to take center stage in the state Capitol.

Feds investigating $2.6MM in missing Okla. Checkoff funds: report

Meatingplace (free registration required) | Posted on January 14, 2017

The U.S. Attorney’s office in Oklahoma City reportedly is investigating the alleged embezzlement of $2.6 million by a former employee of the Oklahoma Beef Council. The council, responsible for the state’s beef checkoff investments, has filed a civil lawsuit in state court against its former accounting and compliance manager, Melissa Morton. StateImpact Oklahoma reported that an independent audit indicated Morton had allegedly forged checks dating back to 2009. 

Swiss town denies passport to vegan anti-cowbell campaigner 'for being annoying'

Independent | Posted on January 14, 2017

A woman has been denied a second application for a Swiss passport after local residents took offence to her rejection of traditions and her “annoying” campaigning.  Nancy Holten, 42, who was born in the Netherlands, moved to Switzerland when she was eight. She is fluent in Swiss German and her children have Swiss citizenship. The animal rights activist has campaigned publicly against the local traditions of putting bells around cows’ necks and piglet racing

Bill would codify landmark water rights victory in Idaho law

Capital Press | Posted on January 14, 2017

Idaho lawmakers in 2017 will again attempt to introduce a bill that codifies in state law a 2007 Idaho Supreme Court decision over who owns in-stream stock watering rights on federal land.  Rep. Judy Boyle, a Republican rancher from Midvale who tried unsuccessfully to introduce the bill last year, said she will introduce a similar bill this year that addresses concerns about the proposed legislation that arose in 2016. Southern Idaho ranchers and the U.S. Bureau of Land Management filed thousands of overlapping claims to in-stream stock watering rights on BLM land during Idaho’s Snake River Basin Adjudication. All but two of the ranchers — Paul Nettleton and Tim Lowry of Owyhee County — backed off when they realized fighting the BLM in court would cost a lot of money. After more than a decade of court battles, the Idaho Supreme Court ruled in the Owyhee County ranchers’ favor in 2007. The court said the BLM could not own the watering rights because it doesn’t own livestock and therefore can’t put the water to beneficial use.

Agriculture is bumper crop for Utah's economy

Deseret News | Posted on January 14, 2017

Utah's agricultural sector pumped more than $21 billion into the state's economy, according to an analysis of 2014 numbers, making it just slightly more than 15 percent of the state's total financial output.

Why Going Organic Just Got Easier For Farmers

National Public Radio | Posted on January 13, 2017

[For farmers looking to switch to organic production, there has always been a catch.] You'd have to follow the organic rules, renouncing synthetic pesticides and fertilizer, for three entire years before any of your crops could be sold as organic. For those three "transition" years, you'd have the worst of all worlds: Low organic yields and low conventional prices.

The Organic Trade Association, which represents America's biggest organic food companies, wants to make it easier for farmers to get over this hurdle. And its proposal has just been approved by the U.S. Department of Agriculture. It's a new certification for food grown during this transition period. This certification, the OTA hopes, will put money in farmers' pockets and encourage them to take the leap into organic certification.

Farming rated as one of most dangerous jobs in the U.S.

High Plains Public Radio | Posted on January 13, 2017

Farming is one of the most dangerous professions in the nation.

As High Plains Journal reports, the pitfalls and hazards of farming are so many and varied that the Occupational Safety and Health Administration (OSHA) calls it one of the most dangerous professions in the U.S.

Sammy Sadaka, extension engineer with the University of Arkansas, said that each year, there are more deaths in the farming industry than any other - accounting for 25.4 deaths per 100,000 workers - twice the number of deaths in mining, transportation and warehousing.

Ready for Ag's Reset?

DTN | Posted on January 13, 2017

Agriculture is in the midst of an economic reset that will thin the ranks of some of the largest farm operators but offer growth opportunities for those who have patiently held on to cash. That was the counsel from Dave Kohl, a professor emeritus in ag economics from Virginia Tech who spoke to the 2017 The Executive Program for Agricultural Producers (TEPAP) class in Austin this week.  "Most lenders haven't seen their customers' financials for a year, but when they do, some will be saying 'Oh my God,'" Kohl said. Jan. 15 through April 15 will be a critical time for lending renewals, he added, with more and more stress appearing not just for farmers, but for suppliers like machinery dealers and cooperatives. The ag finance expert likened the situation to inning four to six of a baseball game. After experiencing cash flow issues and serious profit margin declines in 2013 to 2015, farmers are "calling in their working capital" as their relief pitcher and draining much of their liquid assets. If losses continued in 2016, operators will need to dig deep into their core equity and use their farmland wealth to stay in good standing for their next credit renewal.

The Nutrient Stewardship (4 -R) Summit to be in Minneapolis June 12

Nutrient Stewardship | Posted on January 13, 2017

The 2017 4R Summit will be held June 12-13, 2017, in Minneapolis, Minn. The 4R Summit will be held at the Radisson Blu in downtown Minneapolis. The Summit provides opportunities for those interested in nutrient management and stewardship to learn more about the 4R Nutrient Stewardship program and hear how stakeholders across the country are implementing the 4R principles.