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April 2010 Archive for Your Precious Land

RSS By: Mike Walsten, Pro Farmer

Mike Walsten has covered major business trends in agriculture for more than 40 years.

Novel Land Preservation Program Winds Down

Apr 27, 2010

Mike Walsten

Here's an interesting story about an invovative county program that seems to have succeeded in preserving farmland, parks and conservation areas while both compensating landowners for the value of their land and preserving property rights. It involves a $20 million effort passed by Dakota County, Minn., voters in 2003, which is now in its final phases. Dakota County is the first county south of the Twin Cities. There are several factors at work including permanent easements and conservation programs that are aimed at improving the quality of streams located in the county. The program is not for everyone but there seems to be enough flexibility for those who wish to participate and those who do not.

Click here for the full story, which ran in the Pioneer Press.

If interested in seeing a copy of my LandOwner newsletter, just drop me an email at landowner@profarmer.com or call 800-772-0023.

Economic Progress Versus Greens In Colorado Road Test

Apr 20, 2010

Mike Walsten

The Obama Administration has run full face up against two competing interests -- it's "green/enviro" interest that wants to see a decade-old policy called "roadless" wilderness kept in place versus it's push to expand jobs. The issue is a request by Colorado Governor Bill Ritter (Dem.) to allow some road building on protected national forest land to expand oil drilling, coal mining and ski areas as well as allow removal of dead timber caused by the pine bettle infestations to reduce fire risk. The governor sees it as a jobs builder as well as a safety issue to reduce forest fire risk and says his proposal enhances conservation in much of the remainder of the state's roadless forest land. Enviros howl because that's what they do. It will be interesting to see what happens on this issue. It may have some implications for future landowner property rights issues.

Click here for the full story, which ran April 19, 2010 in the Wall Street Journal.

If interested in seeing a copy of my LandOwner newsletter, just drop me an email at landowner@profarmer.com or call 800-772-0023.

North Dakota Sees Farmland Values Rise "Only" 5% In 2009

Apr 15, 2010

Mike Walsten

The value of North Dakota cropland rose about 5% in 2009 recent survey results shows, states Andrew Swenson, North Dakota State University Extension farm management specialist. Swenson's analysis is based on survey data compiled by the North Dakota Agricultural Statistics Service. While a positive gain, he notes the percentage increase is down compared to the average annual increases of recent years.

"This (the 5% increase) indicates a noticeable slowdown or leveling of land values when compared with the average annual increase of more than 12% during the previous six year," he states. Looking back at the six-year period, he observes: "There were only two periods during the past 100 years that had longer periods of continuous, strong increases in land values. There was an eight-year period (1942 through 1949) with an average annual increase of 10% and a nine-year period (1973 through 1981) that averaged a whopping 18% annual increase."

Looking ahead, Swenson expects a further leveling of land values. The biggest negative is that projected crop profitability for 2010 is the most challenging in several years. Some other important factors include interest rates, farm balance sheets (ability to purchase land) and the general economy. However, the largest wild card remains grain prices and their impact on crop profitability.

"Low interest rates are a positive factor," Swenson notes. "Interest rates to finance land purchases are attractive, while returns and confidence on alternative investments have been weak. If there is a general rise in interest rates, it will make it more difficult for producers to cash flow land purchases with debt capital and make the returns on certain fixed return investments more competitive with investments in land."

The largest increase in cropland values was in the nortwestern region at 11% ($527 per acre), followed by gains of around 9% in the southeastern part of the state ($1,481 per acre and 7% in the southern Red River Valley ($2,136 per acre). Increases in the southwestern, northeastern, south-central and northern Red River Valley regions ranged from 6.5% to 4% at $598, $887, $712 and $1,546 per acre, respectively. Cropland values were flat in the north-central and east-central regions at $756 and $957 per acre, respectively.

He also notes cropland rents (January 2009 to January 2010) increased less than 2% on average, down from the strong 7% gain seen the previous years. The rate of increase for cropland rents was the strongest at 6% and 7% in the southeastern region ($67.20 per acre) and south-central region ($37.20 per acre).

Click here for the full story.

If interested in seeing a copy of the LandOwner newsletter, just drop me an email at landowner@profarmer.com or call 800-772-0023.

Decline In Florida Farmland Values Continues

Apr 14, 2010

Mike Walsten

The impact of the recession continued to drive the value of Florida farmland lower in 2009 with the exception of wooded farmland. That's according to the annual Florida Land Value Survey conducted by the University of Florida's (UF) Institute of Food and Agricultural Sciences. The survey, which does not evaluate urban land values, was taken during the final months of 2009 and seeks to determine average rural land values as of May 2009.

Results show farmland in North Florida dropped between 3% and 17% in value from 2008 while farmland in South Florida dropped even more -- between 10% and 31%. The decreases noted for 2009 follow strong declines in 2008, which saw some areas of Florida lose as much as half their value in 2008. Prior to the sharp downturn in 2008, rural Florida land values had experienced strong gains spurred by the population boom between 2002 and 2006, the report says.

The exception to the drop in value is wooded farmland, which reported a marginal increase of just more than 1%, but it's not clear what contributed to the increase, the report says.

The report indicated pasture land rose 22%, but this was interpreted as a market correction to a disproportional devaluation in 2008, says Rodney Clouser, UF professor of food and resource economics who conducted the survey.

Survey respondents said they expect land values will continue to decline in 2010 but that the decrease will be much less severe than that of 2008 and 2009, likely around 6% to 7%.

"The steepest decline is likely over," Clouser says, "but it will most likely be a few more years before we see an overall increase in values. Even after the bigger economic picture improves, there will be a surplus of land in Florida that will need to be sold before the values begin to go up again."

Click here to review the full report.

If interested in seeing a copy of the LandOwner newsletter, just drop me an email at landowner@profarmer.com or call 800-772-0023.

 

Canadian Farmland Rose 3.6% Last Half 2009

Apr 13, 2010

Mike Walsten

The average value of Canadian farmland increased 3.6% the last six months of 2009, according to Farm Credit Canada (FCC), a leading provider of business and financial services to farms and agribusiness in Canada. FCC conducts its survey of Canadian land values twice a year. The 3.6% national gain follows increases of 2.9% and 5.6% in the two previous reporting periods.

Farmland values remained the same or increased in each of the country's provinces, FCC says. Manitoba reported the highest average increase at 5.9%. Alberta, Saskatchewan and Ontario posted the next strongest gains, 3.8%, 3.4% and 3.3% respectively. New Brunswick reported a gain of 2.5% followed by Nova Scotia at 1.4% and Quebec at 1.3%. British Columbia, Prince Edward Island/Newfoundland, and Labrador indicated steady land values.

Click here for the full report.

If interested in seeing a copy of the LandOwner newsletter, just drop me an email at landowner@profarmer.com or call 800-772-0023.

 

USDA's County Level Cash Rent Data Now Available

Apr 06, 2010

Mike Walsten

USDA's National Agricultural Statistics Service (NASS) has released the county-level cash rent data it collected at the end of 2009. The latest data dump is a treasurer trove of information. But despite the volume of data, there's still plenty of questions of what to make of the data. For instance, the survey indicates that the average cash rent for the state of Iowa is $175 an acre. That figure does not seem to square with the annual survey of cash rents conducted by Iowa State University. That survey found the average cash rent for the 2009 growing season was $185 an acre -- $10 more and one crop season behind. The NASS survey also lists the average cash rent for Illinois at $170 an acre. Normally you'd expect to see higher rents in Illinois than in Iowa. Since the NASS survey is taken of producers and not landowners we wonder if there is a bit of a downward bias on the data.

Never-the-less, the data is still helpful. For instance, compare the current year's state average of $175 in Iowa versus last year's $170. The result is a 3% rise in average cash rents. For Illinois, compare this year's $170 versus last year's $163 - the result is 4% rise in cash rents. Based on what we've heard from landowners, tenants and farm managers, those percentage changes seem about right.

To look at the data by county by state go to: http://www.nass.usda.gov/QuickStats/index2.jsp and click on County Cash Rents Data Query or simply click here.

If interested in seeing a copy of LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.

 

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