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August 2010 Archive for Farmland Forecast

RSS By: Marc Schober, AgWeb.com

Marc Schober is the editor of Farmland Forecast an educational blog devoted to investments in agriculture and farmland.

Crop Progress: Corn and Soybean Conditions Unchanged

Aug 31, 2010

Yesterday afternoon, the USDA released its weekly crop progress report. The corn crop condition remained unchanged since last week, and remains close to the historical average. The soybean crop condition also remained unchanged compared to last week’s report. The USDA estimated 70% of the corn crop is in good or excellent condition, while 10% is in poor or very poor condition. During this week in 2009, 69% of the crop was in good or excellent condition and 10% was in poor or very poor condition.

This week, 94% of the corn crop has entered the dough stage of growth, while 88% was last week, and the 5-year historical average is 86%. This week the USDA estimated that 73% of the corn crop was dented while 54% was last year in the fourth week of August, and the 5-year historical average is 55%. Out of the entire corn crop, 17% was considered mature by USDA this week, 8% was mature last week and the 5-year historical average is 11% by the fourth week in August.

Of the 18 primary soybean producing states, 12% of the soybean crop is in poor or very poor condition while 64% is in good or excellent condition, which is unchanged from last week. The USDA estimated that 92% of the soybean crop is setting pods, while 91% were last week, and the 5-year historical average is 95%. For the first time this season, the USDA estimated that 8% of soybeans are dropping leaves already. Last year, 3% were dropping leaves by this week in August while the 5-year historical average is 7%.

Spring wheat harvest is still slightly behind historical averages with 69% of the harvest complete so far, while 53% had been harvested by last week. The 5-year historical average is that 75% of the spring wheat crop has been harvested by this week in August.

Corn prices increased 2.0% over the past week ending at $4.25 per bushel, soybeans were up 1.1% to $10.18 per bushel, and wheat ended the week down 3.1%, closing at $6.71 per bushel. Year-over-year corn prices are up 30.4%, soybeans are down 8.1%, and wheat is up 42.5%.

Read more about farmland and agriculture at: Farmland Forecast http://farmlandforecast.colvin-co.com/.

Rural Bankers Expect Recession in 2011

Aug 24, 2010

More than four in ten rural bankers expect the economy to dip back into a recession in 2011 according to a Creighton University poll. “There is too much uncertainty (coming from Washington).  Businesses do not like to take financial risks in uncertain times,” responded Frank Sullentrop of Legacy Bank.

 

The overall Rural Mainstreet Index (RMI) slipped to 46.0 this month, according the August survey of bank CEOs in a 10-state region. The RMI decreased to a four-month low and is below growth neutral 50.0 for the second consecutive month after peaking in May of 2010 at 54.3.

 

“Much like the nation, bank CEOs are tracking significant pullbacks in economic activity,” said economist Erine Goss, co-author of the report.

 

Bankers pessimistic outlook was also apparent by the monthly confidence index, which tracks bankers' economic outlook six months out, that dropped for a third straight month to 46.0 from July’s response of 52.4. The index is the lowest since September of 2009 and ended its streak of being above 50.0 for the past 10 months.

 

Rural Mainstreet Index August 2010 Marc Schober Greyson Colvin

 

Farmland

 

Offsetting the negative outlook on the overall economy, the farmland price index increased to 55.3, and continued its impressive streak above 50.0 for the seventh month in a row. Goss noted, “While Rural Mainstreet businesses are experiencing downturns in economic activity, farming income is holding up much better with resulting upturns in farmland prices.”

 

Bankers also reported very healthy crop yields. “Our county ranges from excellent looking crops to some areas that were too wet to plant,” commented Terry Engelken, CEO of Federation Bank.

 

Farmland Price Index August 2010 Marc Schober Greyson Colvin

 

The farm equipment sales index increased to 52.7 this month. The index has remained above growth neutral for five consecutive months due to a steady demand for equipment. “As long as we don’t experience any significant upward moves in the value of the dollar, I expect farm income to continue to grow for 2010,” said Goss.

 

Ethanol

 

Bankers were also asked, “Would the customers and businesses in your area support changing the corn ethanol blend percentage?” 73% of bankers reported that their customers and businesses would support an increase of ethanol blended into gasoline. The EPA is due to make a decision on an increase in ethanol blend this fall.

 

Outlook

 

Bankers’ responses are consistent with the overall economic concerns this summer about the U.S. economy. Weak housing sales, slower retail purchases, and a lack of jobs is weighing on the economy. Attentions are now turned to a double-dip recession.

 

The one bright spot in the report continues to be agriculture as the farmland price and equipment sales indexes have been able to stay above growth neutral for over five months now. High grain prices and healthy crop yields should allow farmers to sow bumper profits in 2010.

 

Read more about farmland and agriculture at: Farmland Forecast http://farmlandforecast.colvin-co.com/.

Crop Progress: Corn Conditions Slip

Aug 17, 2010

Yesterday afternoon, the USDA released its weekly crop progress report. The corn crop condition deteriorated since last week, but remains close to the historical average. The soybean crop condition remained unchanged compared to last week’s report. Both corn and soybeans are continuing to mature at an accelerated rate. The USDA estimated 69% of the corn crop is in good or excellent condition, while 11% is in poor or very poor condition. Last week 71% was in good or excellent condition, and 10% was in poor or very poor condition. During this week in 2009, 68% of the crop was in good or excellent condition and 10% was in poor or very poor condition.

This week, 74% of the corn crop has entered the dough stage of growth, while 52% was last week, and the 5-year historical average is 58%. This week the USDA estimated that 32% of the corn crop was dented while 14% was last year in the third week of August, and the 5-year historical average is 22%.

Of the 18 primary soybean producing states, 11% of the soybean crop is in poor or very poor condition while 66% is in good or excellent condition, which is unchanged from last week. The USDA estimated soybean blooming this week at 97% of the crop, while the estimate last week was 93%, and for this week in 2009 was 92%. The 5-year historical average is 95% of the soybean crop blooming by the third week in August. The USDA estimated that 84% of the soybean crop is setting pods, while 71% were last week, and the 5-year historical average is 81%.

The winter wheat harvest is slightly behind historical averages with 91% of the crop harvested so far. Last week, 87% was harvested, while the 5-year historical average is 96% by this week in August. Spring wheat harvest is also lagging behind historical averages with 34% of the harvest complete so far this year, while only 20% had been harvested last week. The 5-year historical average is that 44% of the spring wheat crop has been harvested by this week in August.

Corn prices increased 1.1% over the past week ending at $4.07 per bushel, soybeans were down 1.4% to $10.34 per bushel, and wheat ended the week down 7.4%, closing at $6.63 per bushel. Year-over-year corn prices are up 29.6%, soybeans are up 4.7%, and wheat is up 40.7%.

Read more about farmland and agriculture at: Farmland Forecast http://farmlandforecast.colvin-co.com/.

WASDE: Ending Corn Stocks Lowest in Recent Years

Aug 12, 2010

The USDA updated the U.S. and World balance sheet estimates for major agricultural commodities in the World Agricultural Supply and Demand Estimates (WASDE) report on Thursday. Extremely hot and dry weather across Europe and the former Soviet Union have lead grain prices on a rally and global supply to decrease. Estimates of U.S. corn yields were increased to a record 165.0 bushels per acre, but domestic supplies were lowered to a four-year low of 1.3 billion bushels.

U.S. corn ending stocks were decreased by 61 million bushels to 1.312 billion bushels, which would be the lowest since 2006/07. The decrease in ending stocks was due to an increase in domestic use of 30 million bushels, primarily from an increased use in sweeteners, as well as an increase in exports. U.S. exports were estimated 100 million bushels higher on tighter world supplies of wheat and coarse grains. U.S. corn yields were increased by 1.5 bushels per acre to 165 bushels per acre, which would be 0.3 bushels higher than last year’s record crop, but the increase did not entirely offset the increased exports and domestic use. The USDA season-average farm price for corn is estimated at $3.50 to $4.10 per bushel, an increase of 5 cents on both ends.

Projected world corn supplies were decreased by 0.8 million tons due to a 1.5 million ton decrease in both Russia and Ukraine which more than offset the increase in U.S. production.

The USDA did not changed their July estimate of Soybean ending stocks of 360 million bushels due to an offset lead by increased exports and increased production. U.S. soybean production was estimated 88 million bushels higher than last month’s estimate, up to 3.4 billion bushels due to an increase in yields to last year’s record high, 44 bushels per acre. Exports were increased by 65 million bushels to 1.435 billion on an increase in buying from China, and lower ending stocks in South America making U.S. soybeans a more attractive buy. The USDA season-average farm price for soybeans is estimated at $8.50 to $10.00, up 40 cents from last month.

Global soybean production was estimated at 253.7 million tons, up 2.4 million tons, due to increased production in the U.S.

An increase in U.S. wheat production was not enough to offset the increase in U.S. wheat exports, leaving the ending stocks 141 million bushels lower than last month’s estimate, and 21 million bushels lower than in 2009/10. U.S. production was increased by 49 million bushels due to an increase in yields across the Northern Plains and Pacific Northwest. U.S. exports in wheat were increased by 200 million bushels due to an extreme decrease in production from the EU-27 and FSU-12. The USDA season-average farm price for wheat is estimated at $4.70 to $5.50, up 50 cents from last month’s WASDE.

World wheat supplies estimates decreased by 15.3 million tons on lower global production despite the increase in U.S. production. Russia’s wheat production estimate was reduced by 8 million tons alone.

The USDA increased U.S. corn yields, but the key ratio of ending stocks to usage declined due to higher use. Production needs to outpace usage in order to alleviate the strained supply and demand curve, but that scenario is high unlikely. Historically, usage is increasing faster than corn production. Global wheat supplies are dwindling, while the U.S. wheat supply is estimated to be back below record amounts due to the increase in exports. 
 

Click on the link for the full WASDE report: http://www.usda.gov/oce/commodity/wasde
 

Read more about agriculture and farmland at Farmland Forecast.

U.S. Farmland Values and Returns Increase in 2010

Aug 11, 2010

Farm real estate, cropland, and cash rent values all increased over the past year, while pastureland values did not change. The USDA recently released its Land Values and Cash Rents 2010 Summary which tracks land and cash rent values in the U.S. Across the country, farm real estate, which includes all categories of farmland, appreciated 1.4% during 2009. The average price of U.S. farm real estate is now at $2,140 per acre.



Cropland values increased across the country by 1.1% on average, up to $2,700 per acre. In some areas, cropland values increased more than others. In the Midwest; Nebraska, Minnesota, South Dakota, and Illinois grew the most at 10.7%, 6.1%, 4.3%, and 3.2% respectively. Wisconsin cropland decreased by 1.1% and Michigan cropland decreased by 2.1% as the two made up the only states in the Midwest that lost cropland value.

While land values increased modestly, cash rents increased by 3.0% across the U.S. to $102 per acre. In the Midwest, Minnesota cash rents increased the largest, by 7.1% to $121 per acre, and Wisconsin cash rents increased by 5.7% to $92 per acre. Iowa still has the highest cash rents on average, at $176 per acre, which increased by 0.6% over the past year.

Outlook

 

The total return (cash rents plus land appreciation) on U.S. cropland during 2009 was 4.9% which is significantly higher than last year’s 0.5% total return, but still below the 10-year average of 10.4%. We believe that the return on cropland will continue to grow as the demand for farmland is increasing at an alarming rate due to rising ethanol and food demands.



2008 marked the first time since 1987 that farmland values decreased in the U.S., and only the third time in the past 100 years. Even though farmland values slightly decreased in 2008, farmland was still able to return 0.5% due to cash rents. Unlike gold, often marketed as an inflationary hedge like farmland, farmland was able to provide its investors a cash return.

Throughout 2009, we saw the demand for farmland increase by outside investors, and farmers. Since farmers are the primary buyers of farmland, and the 2009 harvest was extremely delayed because of poor weather conditions, we expect the upcoming buying season to be very active. Many corn fields across the Midwest had standing corn well into winter, leaving those operators minimal cash on hand to make land purchases. If 2010’s harvest goes well, farmland values should continue their steady increase, and returns should make way back to, or pass, historical averages. 

Coming off of 2008’s small decrease in farmland values, and 2009’s correction, the upcoming few years may provide investors an opportune time to invest in farmland. It is hard to find a time when an asset, whose 20-year average annual return is over 11%, can be purchased at a discount, but we believe that farmland may be that asset right now.

Read more about agriculture and farmland at Farmland Forecast.

Crop Progress: Corn and Soybeans Continue to Mature Quickly

Aug 10, 2010

Yesterday afternoon, the USDA released its weekly crop progress report. The corn and soybean crop conditions both remained unchanged compared to last week’s report, while both crops are continuing to mature at an above average rate. The USDA estimated 71% of the corn crop is in good or excellent condition, while 10% is in poor or very poor condition. During this week in 2009, 68% of the crop was in good or excellent condition and 10% was in poor or very poor condition.

 

This week, 97% of the corn crop is silking, according to USDA estimates; while 93% was last week and only 87% this week in 2009. The 5-year historical average is that 94% of the crop silking by the second week in August. 52% of the corn crop has entered the dough stage of growth this week, while only 31% was last week, and the 5-year historical average is 40%. This week the USDA estimated that 14% of the corn crop was dented while 5% was last year in the second week of August, and the 5-year historical average is 11%.

 

Of the 18 primary soybean producing states, 11% of the soybean crop is in poor or very poor condition while 66% is in good or excellent condition, which is unchanged from last week. The USDA estimated soybean blooming this week at 93% of the crop, while the estimate last week was 86%, and for this week in 2009 was 85%. The 5-year historical average is 90% of the soybean crop blooming by the second week in August. The USDA estimated that 71% of the soybean crop is setting pods, while 53% were last week, and the 5-year historical average is 67%.

 

The winter wheat harvest is behind historical averages with 87% of the crop harvested by this week. Last week, 83% was harvested while the 5-year historical average is 93% by this week in August.

 

Corn prices increased 3.2% over the past week ending at $4.03 per bushel, soybeans were down 0.5% to $10.48 per bushel, and wheat ended the week up 2.7%, closing at $7.12 per bushel. Year-over-year corn prices are up 23.5%, soybeans are down 4.9%, and wheat is up 51.2%.

 

Read more about farmland and agriculture at: Farmland Forecast (http://farmlandforecast.colvin-co.com/)

Chinese Imports to Change Grain Markets

Aug 09, 2010

China is entering a “new era” of corn buying. The world’s most populous country may import as much as 15 million tons of corn in 2015, according to the U.S. Grains Council. China has historically been self-sufficient in corn production, but demand is starting to outpace supply as the nation continues to consume more protein.

 

Chinese imports of corn will grow from 1.7 million tons in 2010 to 5.8 million tons in 2011, and to 15 million tons in 2014-15 according to Hanver Li, Chairman of Shanghai JC, speaking to the U.S. Grains Council. 15 million tons of corn translates to the U.S. exporting roughly 600 million bushels of corn, which will have a substantial impact on corn stocks.

 

Farmland Forecast   China Corn supply demand marc schober greyson colvin farmland 2010

Mr. Li expects that meat consumption per capital will grow 6.9% by 2015, and milk consumption will grow by more than 50% over the same period. Rural areas will drive meat demand, while urban centers will drive milk demand.

Historically, China has been self-sufficient in corn production and a net exporter, but strong demand and poor weather this year has led to production shortfalls. As the population continues to expand and diets transition to more protein, Mr. Li believes that “China’s ability to produce corn can’t keep up with that growth.”

 

To ease domestic prices, the Chinese government has been selling reserves. In 2010, the government has sold 5.7 million tons of corn from reserves so far and sold 9.6 million tons in 2009. The amount of government supplies is unknown, but the government can only temper prices for so long. Imports of corn will be the primary solution to solve the shortfall.

 

Substantial Imports of Soybeans

 

We see China’s transition to a net importer of corn very similar to China’s transition to becoming a net importer of soybeans. Before 1995, China was a net exporter of soybeans but by 2010, it is the world’s largest soybean importer and is expected to import more than 40 million tons of soybeans this year.


Farmland Forecast   China soybean supply demand marc schober greyson colvin usda foreign agricultureal service


Soybean imports have become more attractive to China as domestic production is at a cost disadvantage compared to overseas production. Oil extraction rates for Chinese soybeans are 17-18% compared to 22% for imported soybeans. Average Chinese soybean yields are expected to be 25.3 bushels per acre (1.7 metric tons per hectare) in 2010/11, according to the USDA, which is substantially lower than the estimated U.S. average of 42.9 bushels per acre for 2010/11.

Over the past few years, Chinese soybean yields have not changed much; yielding 1.72 MT per hectare in 2006, and 1.67 MT per hectare in 2009, according to the USDA. China’s priorities shifted away from soybeans and towards corn in the late 1990’s and into the 2000’s. Since South America and the U.S. were producing soybeans much more efficiently than China, the Chinese decided to focus on boosting corn production, and importing soybeans instead.

 

Lack of IP protection

 

Although Chinese soil and climate is not quite as fertile for agriculture as it is in the U.S. Corn Belt, yields could be higher in China if intellectual property rights were stronger and genetically modified seeds were permitted. Strong patent protection in the U.S. allows companies like Monsanto to sell their genetically modified seeds in the U.S., which are designed to tolerate droughts and weeds. Monsanto and its competitors will not enter markets with poor intellectual property laws, such as China, in fear that their patented traits will be copied.

 

China currently does not allow genetically modified seeds to be planted, but they do import genetically modified grains and oilseeds. Once China revises its policy to allow biotech seed use, U.S. companies will still be leery of entering the market due to the lack of intellectual property rights.

 

China’s Insatiable Appetite for Grains

 

Rapid population and economic growth in China has driven the country’s insatiable demand for grains. Economists have long shown that as GDP rises and a middle class develops, consumption of protein also rises. The transfer to protein will have a significant impact on the demand for grain as roughly one pound of meat requires seven pounds of grain.

 

The Brookings Institution estimates that by 2021, China’s middle class could grow to over 670 million, compared to only 150 million in 2010. As the world’s middle class continues to develop over the next decade, the demand for grains will grow exponentially.

 

China has overtaken the U.S. as the world’s dominant meat consuming market in 2000. China’s meat intake per person went from 25kg per year in 1990 up to 50kg in 2000 and is at roughly 53kg in 2008 according to the World Resource Institute. The increase in meat consumption has lead China to consume four times as much additional grain since 1995.

 

Despite the drastic increase in meat consumption, on a per capita basis, China significantly lags behind the U.S., which averaged 123.8kg of meat per capita in 2000. As China’s economy continues to develop, China’s meat consumption per capita will catch up with developed economies.


Farmland Forecast   China meat consumption per capita greyson colvin marc schober world resources institute
 

China’s Income Elasticity 

Economists have recorded the effect on demand for goods as incomes rise among consumers in both developed and developing economies. For every dollar rise in income, demand grows rapidly when incomes are low and less rapidly when incomes are already high. China has an income elasticity of 0.47 while the U.S. has an incomer elasticity of 0.15. Historically, rises in income have precipitated rises in the consumption of higher protein foods including meat, dairy, eggs and poultry products.


Farmland Froecast   William W Wilson phd north dakota state university ers China vs US income elasticities


China’s State Council predicts that China’s annual GDP growth rate will increase roughly 7% per year from 2010 to 2020. This could lead to a per capita GDP of $5,900 in 2020, compared to $4,000 per capita in 2009. The USDA estimates that of every new dollar spent in China, 40% is allocated to food.

China’s Land Imbalance

 

The primary problem facing China’s ability to feed itself is its land imbalance. China has roughly 20% of the world’s population although only 7% of the world’s arable land. The supply of arable farmland in China is decreasing rapidly as well. China has lost 20% of its arable land due to erosion, desertification, and development, and is expected to lose 10 to 15 million more hectares by 2020.

 

To solve this imbalance, China committed $5 billion for agricultural development in Africa in 2008. China is sending expatriate farmers to Africa to cultivate the land and export the grain directly back home to ensure a consistent supply of grains. According to the Chinese Ministry of Commerce, over one million Chinese are farming in Africa dispersed throughout 18 countries.

 

U.S. to Benefit from Chinese Imports

 

Where will China import all this corn from? The first place they will turn to is the U.S., which is the world’s largest corn exporter, accounting for 60% of global corn exports in 2009. Argentina and Brazil only account for roughly 10% of global exports each.

 

If China imports an incremental 600 million bushels of corn in 2014 from the U.S., using the USDA’s baseline projections, U.S. corn ending stocks would be 960 million bushels. This would put the Ending Stocks to Use Ratio at 6.3%, the lowest level since 1995.

 

2010 is a major turning point in the grain market. The Chinese transition to becoming a net importer of corn will have a substantial implication on the world’s corn supply.

 

Read more about farmland and agriculture at: Farmland Forecast (http://farmlandforecast.colvin-co.com/)

Grains Rally in the Heat of July

Aug 02, 2010

Poor weather patterns across much of Europe, Russia, and into China have led to an exceptional rally in the U.S. grain markets during the month of July. There is concern over global shrinking suppliers, which has increased demand for grains from the U.S., the world's largest exporter of grains.

 

 

U.S. fields have been a different story, with excellent weather during the all-important growing season. Fields that were planted late, due to excess moisture levels, have made strong improvement during July. The three most valuable crops in the U.S. remain in above average-growing conditions. Across the Midwest, corn has tasselled, soybeans have formed pods, and wheat is being harvested.


Commodity Prices

Commodity prices soared in July as reports of poor yields across Europe and Asia sent importers searching for new sellers. Corn closed in July at $3.93 per bushel, increasing by 10.8%. Soybeans closed at $10.53 per bushel, increasing 11.0% and marking the first monthly increase since April of this year. Wheat spiked up 42.3% to a 12-month high in July, closing at $6.61 per bushel. Wheat yields in the Black Sea region have been hurt the most by the dry weather, translating to the drastic increase in U.S. wheat prices, along with other domestic grains.

Chinese Demand

 

China is entering a “new era” of corn buying. The world’s most populous country may import as much as 15 million tons of corn in 2015, according to the U.S. Grains Council. China has historically been self-sufficient in corn production, but demand is starting to outpace supply as the nation continues to consume more protein.

 

Chinese imports of corn will grow from 1.7 million tons in 2010 to 5.8 million tons in 2011 and to 15 million tons in 2014-15, according to Hanver Li, chairman of Shanghai JC, in remarks to the U.S. Grains Council. Fifteen million tons of corn translates to the U.S. exporting roughly 600 million bushels of corn, which will have a substantial impact on corn stocks.

 

We see China’s transition to a net importer of corn as very similar to its transition to becoming a net importer of soybeans. Before 1995, China was a net exporter of soybeans, but it is now the world’s largest soybean importer and is expected to import more than 40 million tons of soybeans this year.

 

Farmland

Creighton University publishes a monthly farmland index, which remained above growth-neutral for the sixth consecutive month, although it declined sequentially to 52.5 from June’s 54.7. We think that farmland values should increase over the second half of 2010. One hurdle in valuing farmland has been the lack of comparable sales across the Midwest, but we believe there will be an increased amount of farms starting to appear on the market in the fourth quarter. More land sales will help bridge the gap of comparable land sales for appraisers.

 

WASDE

 

U.S. corn ending stocks for 2010/11 decreased by 200 million bushels to 1.373 billion bushels from the June estimate, but were higher than the average estimate of 1.269 billion bushels. The decrease in ending stocks was due to an increase in usage from 2009/10, decreased harvest area, and a 125-million-bushel decrease in production. Corn stocks-to-use ratio for 2010/11 is now estimated at 10.3%, the lowest level since 2003/04.

Estimated ending stocks of soybeans remained unchanged by the USDA this month as increased exports and crush offset the increase in U.S. production. U.S. production increased by 35 million bushels on an increase in area harvested. An increase in foreign demand was not enough to offset higher production of wheat. The USDA estimated that wheat ending stocks for 2010/11 will increase by 102 million bushels due to increased area, yields, and carry-in.


Renewable Energy

 

Due to the time sensitivity of farmers’ crop decisions for each year and the desire for farmers to maximize their income to meet the potential increase in demand, the agriculture industry is encouraging the EPA to make its decision soon on requiring U.S. gasoline to contain 15% ethanol instead of the current 10% blend. Unfortunately, the EPA has delayed its decision on whether or not to approve ethanol blends of 15% in gasoline until the fall of 2010. The primary reason for the delay is that the Department of Energy has not completed vehicle testing.

 

We believe that the EPA will make the increase to E15, as it is the only realistic solution to meet the Renewable Fuels Standard and reduce the U.S. dependency on foreign hydrocarbons. After the Deepwater Horizon disaster, renewable fuel sources, which are environmentally friendly and add jobs, will continue to become a larger part of the U.S. fuel supply.

The agriculture industry is very excited about E15 and believes there will be substantial impact on the demand for grains used for ethanol production. The impact will not be felt overnight, but will support farmers’ income and the demand for agricultural products.

Outlook

We expect farmland values to grow at strong rates because of the crop outlook for the rest of 2010. Even if this year is not a bumper crop, elevated grain prices will support healthy farm incomes come harvest. Some farmers had feared soybeans to be below $9.00 per bushel by the end of the year, but currently soybeans are trading over $10.00 per bushel for November delivery. The increase in grain prices will trickle down and benefit the majority of the agriculture sector.

Remember to visit Farmland Forecast (farmlandforecast.colvin-co.com) for your daily update on news and research about agriculture and farmland.

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