Meaning adding up for me. The Corn Belt has been dodging drought bullets for the last few years and many got hit last year. Some are worried (not near enough) for obvious reasons -
"We are still concerned about getting the leftovers out of the way from the drought of 2012. At this time we would not anticipate a national corn yield above the trend," said Iowa State University climatologist Elwynn Taylor, who has studied crop production for decades. "Rather, we would expect a fourth consecutive year of below-trend crop, not as far below as in 2012 but still not up to par."
The Farm Bill - most of it anyway was extended till Sept and many don't like it in including the recipients themselves.
But just about everyone hates it. That includes farmers, produce trade organizations, groups that address hunger, dairy farmers, fiscal hawks and environmentalists – all have concerns with the way the bill was shoved awkwardly into the overall fiscal cliff compromise.
Then there is the dynamics of once again the dramatic increase in farm land value. The link below comes from my part of the cornfield and I can tell you for a certainty the average paid of $8,296 for an acre of Iowa farmland is way low. Well above 10K with sales in the middle to high teens and some smaller parcels going over 20K.
Average Iowa farmland value is estimated to be $8,296 per acre, an increase of 23.7 percent from 2011, according to results of the Iowa Land Value Survey conducted in November. This is the third year in a row where values have increased more than 15 percent. The 2012 values are historical peaks.
This is no bullshit and what's interesting as well is that it is not unusual to pay with cash. I'll do the math. There are 640 acres to a section which is a square mile. Land is generally sold in parcels the smallest being an 80 as known. A quarter is 160 acres. 80 acres is not a small area but not much with the bigger operators who farm a section or two or maybe more. So - you get a chance to pick up an 80.
80x15,000 = $1,200,000 Whose got that kind of money just laying around and that's just for 80 acres. Back in '09 or so we thought the jump then from $3,500 or so to 6K plus was very interesting. Now this.
Go to this link below and enter the zip code and see for yourself how much they dislike the farm bill. And I can tell you it's the ones at the top of the list who are paying cash. Farm Subsidy Data Base
I do not see how this can be sustained without crashing eventually combined with the drought aspect and Climate Change as a whole. Seen it several times. Greed is at work here.
Central Kansas, dry land tillable jumped from $600 per acre to as high as $3k, irrigated level ground went from 3k to above $7k. These changes in less than 10 years, most in the last 3.
ReplyDeleteThe worst thing to me about the insurance program is when guys plant in flooded fields or in dry powder dust to qualify for insurance when everyone knows the crop will fail, it's like setting your car on fire then calling your agent and to start a policy.
The farm subsidies started around 1900 and never stopped. Reading a book now about ancient Rome, they had farm subsidies too, wheat and barley got the most of it. They also had a problem of loss of rural population from rich and corporations buying up all the land, running up prices, and then farming with cheap and/or slave labor, this sent the rural population flooding into the cities with rise in crime, discontent, and fouling the city's air with smoke and sewer gas. Some things never change.
corporate welfare still at work I see...
ReplyDeleteLook what happened to Rome. I didn't know that. People you grew up with are just that-corporations.
ReplyDeleteNEVADA, IA. — A $17,000-per-acre sale of Story County farmland Friday shows that Iowa land reached the other side of the fiscal cliff as strong as ever.
ReplyDeleteThe sale of the 375.26 acres north of Nevada to neighboring farmer Dale Swanson and his son Richard will generate $6.38 million to the Board of Pensions of the Annual Conference of the United Methodist Church, which had owned the land since 1978.
“We’re very pleased,” said the Rev. Beverly Bell, spokeswoman for the conference. “This is the last parcel of land we have to sell, and the time was right.”
Swanson acknowledged that he was “not happy” with the price, but considered the investment worthwhile.
“This is very good land,” said Swanson, who plans to farm it with his son.
More than 150 farmers and others interested in the sale packed into the Nevada Senior Citizens Center on Friday afternoon.
The sale generated heavy interest, not only because of the land quality. It’s also due to curiosity about any aftereffects from the “fiscal cliff” deal, which extended the capital gains tax at 15 percent and the estate tax exemption at $5 million.
Farmland Realtors had reported a record rush of sales in the final weeks of 2012 on fears that Congress might let the tax breaks lapse, possibly dampening the attractiveness of farmland.
Had Congress not passed the bill, the estate tax exemption would have dropped to $1 million and the capital gains tax could have risen to as high as 23.8 percent.
(It will rise to 20 percent for families with income above $450,000 and individuals above $400,000.)
“There was more confidence after Congress extended the tax laws, even if it was just for a year,” said attorney Rick Lynch of Bloomfield, who represented the sellers.
Auctioneer Dan Sullivan needed scarcely more than 15 minutes to coax the price up from a start of $7,500 per acre.
“Get those hands up,” he exhorted the crowd, which needed little prompting.
Last October, Iowa broke its old record with a $21,000-per-acre sale in Sioux County. Sales of $15,000 or more have been common.
“This was my highest sale, but I had one a few weeks ago at $13,000 per acre,” Lynch said.
The sale Friday was expected to attract strong bidding, considering the land bore a corn suitability rating near 90. A rating above 70 generally indicates good quality land.
“This is exceptionally good land,” said farm manager Randy Hertz of Nevada, who attended the sale. “Land around here still yielded 200 bushels per acre for corn last year, even with the drought.”
Tim near KC
Good stuff - thanks for that Timmy!!
ReplyDeleteHere is what is going on in Brazil.
ReplyDeletehttp://climatechangepsychology.blogspot.com/2013/01/worst-drought-in-50-years-hits-brazils.html
Be afraid....be very afraid. We have never EVER taken any sort of gov farm hand-out. Why let them in...we don't even take the ag surveys, until they threaten us. Which only happened once years and years ago.
ReplyDeleteLinda
http://coloradofarmlife.wordpress.com
http://deltacountyhistoricalsociety.wordpress.com
Fux News calls you on that RZ.
ReplyDeleteThat's interesting Linda. There's a fellow in your neighborhood who's received just about a mil in the last 15-16 years ending 2011.
ReplyDeleteYou could have been living real high on that hog all this time.
We have never taken anything, either. There is a small amount listed for Davis Ranch, but it's not a subsidy, it was a one-time, partial reimbursement for levee work. The people in my zip code who get subsidies live in the only rich-folks' gated development in our area. Linda, I don't do the ag surveys, nor the long form for the census that asks a lot of questions about land use. And yes, they threatened, so I did return the forms, empty except for the words "None of your damned business." written in red marker across the first page. My little 80 acres is prime cropland, the best you can get. You'd have a hard time getting $6000 an acre for it, the only market here is for growing houses.
ReplyDeletehttp://www.geopoliticalmonitor.com/the-global-farmland-boom-4766/
ReplyDeleteThis mentions the drought as well. It also speaks of erosion. In the corn belt they have addressed that fairly successfully but that won't work if it doesn't rain.
ReplyDelete