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January 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.

Why the sudden drop in grain prices?

Jan 27, 2010
Since the USDA updated the U.S. and World 2008/09 and 2009/10 balance sheet estimates for major agricultural commodities in the World Agricultural Supply and Demand Estimates (WASDE) on January 12th, grain prices have declined drastically. The WASDE reported record yields and production for the 2009/10 crop, which lead to an increase in ending stocks. Since the release on January 12th, corn prices have declined from $4.22 to $3.64, soybean prices from $10.01 to $9.51, and wheat prices from $5.72 to $4.98.
 
Supply
 
The WASDE reported a record U.S. corn yield of 165.2 bushels per acre, topping the previous record held in 2004 of 160.4 bushels per acre. In addition, soybeans were estimated at a record yield of 44.0 bushels per acre.
 
Corn stocks increased 5% on the record yields, while soybean stocks were estimated lower on increased domestic consumption. Now that U.S. farmers are capable of record yields, grain supply concerns decreased because of the capabilities of record production.
 
The declined prices in grains came as a surprise to numerous analysts. Many were expecting a decrease in estimated yields and production due to the extremely poor harvest conditions and high amount of unharvested corn throughout the Midwest. The wet harvest that started in October set farmers back over a month in many states because fields were inaccessible. Particularly high moisture levels also hurt farmers this fall.
 
Demand
 
Staple grains, such as corn and soybeans, have increased to record yields in 2009, and they are increasing faster than the world population growth. The world population growth rate of 1.17%, according to the World Bank, is significantly lower than these yield growth rates over the past 30 years of 2.46% for corn and 1.81% for soybeans, according to the USDA.
 
The question is; can grain production keep up at these record rates while farmland is disappearing at a rate of 2 acres per minute in the U.S., according to the American Farmland Trust. Record yields do not necessarily mean record production if acreage is decreasing.
 
Demand will increase, not only from a growing world population, but from changing diets and other uses for grains, including ethanol. Read our blog on the fight for food security to learn more about the growing demand for food . http://farmlandforecast.colvin-co.com/2009/02/16/the-fight-for-food-security.aspx
 
The demand for commodities will grow substantially over the long-term, but in the short-term, commodities will be range bound due to the unexpected increase in supplies. Any time there is a change in the supply and demand, there will be quick adjustments in trading prices. Unfortunately, the recent USDA figures have had a negative impact on the commodity prices because of higher supplies. Farmers are doing great work, especially in one of the most difficult harvests in recent years.
 
Re-survey
 
Over 50% of all counties in the Midwest are considered disaster areas according to the USDA, yet 2009 resulted in record production and yields. Something is not adding up. If you drive through the Midwest, there are unharvested corn fields everywhere. Either USDA survey data is over stated, or farmers are growing extremely exceptional crops.
 
To help answer concerns and questions throughout the agriculture industry, the USDA has announced that they will re-survey fields and take into better consideration unharvested corn fields across much of the U.S. The re-surveyed data will not be available until March at the soonest.
 
Outlook
 
We are very anxious to hear the re-surveyed data come March from the USDA. Corn, wheat, and soybeans are being traded approximately 8% to 13% lower than their December 31st prices because of the recent USDA reports. If updated USDA figures indicated a lower, more realistic estimate of crop yields and production, grain prices could rebound quickly and sharply.

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

Farmland Price Index highest since October 2008

Jan 25, 2010
The overall Rural Mainstreet Index (RMI) continued its climb to an 18-month high according to Creighton University’s November survey of bank CEOs in an 11-state region. The RMI rose to 41.0, which is just 0.1 higher than last month, and still considerably below growth neutral 50.0. The farm equipment index and the farmland price index rose to their highest marks since October 2008 at 47.2 and 47.4 respectively. The confidence index, which estimates the economy six months out, continued its rally to 59.7, while the loan volume index proved that credit is tightening on Rural Mainstreet by decreasing to a record low 33.4.
 
The farmland price index increased to 47.4, continuing a five-month rally to an 18-month high, but it marks the15th consecutive month below 50.0. Some states have reported farmland price indexes over 50.0. North Dakota’s index increased to 52.6, while Nebraska has had limited, but strong land sales. “Our farmland sales have been very limited but have set record highs as they occur,” noted John Nelsen, president of First Tier Bank in Holdrege.
 
Bank CEOs were asked by how much farmland prices have changed over the past six months. Most bankers, 41%, replied that prices have not changed while 31% said that prices have declined and 28% said prices have inclined. 11% of CEOs noted that farmland price increases have been of more than 5%.
 
Farm equipment sales rose in January to an 18-month high of 47.2 from December’s 40.4. What a difference one year has made in farm equipment sales. January 2009’s index was at a record low 29.4.
 
CEOs have a strong outlook on the economy six months from now. The confidence index rose to 59.7, which is the highest since June of 2007. The index has been above growth neutral for four consecutive months now indicating a solid outlook for an expanding economy.
 
Despite the U.S. government encouraging lending, the loan volume index slumped to a record low of 33.4. The index has been below 50.0 since June of 2009.
 
Outlook
 
The increase in index levels from farmland prices, farm equipment, confidence, and the overall Rural Mainstreet came as great news. Even though farmland price and farm equipment sales indexes are below 50.0, they are building on strong gains. It shouldn’t be too long before the farmland price index breaks into positive growth.
 
The RMI has continued its increase, but has still remained below 50.0. “The RMI has remained below growth neutral for 23 consecutive months. The uncertainty surrounding legislative changes coming from Washington combined with economic weakness among Mainstreet businesses linked to the farm sector appear to be weighing on the rural, agriculturally dependent economy,” said Creighton University economist Ernie Goss. Any increase in the RMI is nice to see, but a break into the 50s would be outstanding.
 
Average farmland prices are on the brink of increasing in many of the 11 states surveyed. As we have said before, buying farmland is a great investment, and catching land at a stable price is historically a rare occurrence. As the farmland price index approaches 50.0, watch for other reports of farmland values on the rise.

Read more about agriculture and farmland at farmlandforecast.colvin-co.com.

Common methods of conservation tillage

Jan 19, 2010
After a fall harvest and before the spring planting season, soil is typically cultivated so it can become more fertile and welcoming for plant growth. All farmers practice at least one type of tillage method. Tillage was first done hundreds of years ago through manual or animal labor. Today, farmers use tractors and can choose from a number of different tillage machinery. Recently, conservation tillage has become more popular, including no-till and strip till practices.
 
Tillage is done to break up soil, aerate soil, break compaction layers, help mix fertilizers, and kill weeds. Many of today’s farmers are transitioning to some sort of conservation tillage. 38% of U.S. planted acres in 2004 used a conservation tillage method, according to the USDA.
 
No-Till
 
No-till is a tillage method that requires no actual tilling of land. The theory behind no till is that it benefits the environment, while it doesn’t give up much on yields. No-till farming stores carbon more efficiently than conventional till farming. Plant residue is left unharmed in fields so it can naturally decay over time, thus locking carbon in plant matter, rather than breaking it down faster and letting carbon escape into the atmosphere.



Compaction is a large reason why farmers like cultivating their land. Most fields across the world have a compaction layer somewhere in the top soil. This layer is formed from tractors or other heavy machinery running on top of the field over time. The compaction layer doesn’t allow plant roots to pass through it very easily to absorb maximum nutrients that plants need to grow to their full potential.
 
No-till farming uses natural means of breaking compaction layers. In areas where there is a hard freeze, soil will naturally freeze and thaw through the winter and into the spring. When soil freezes and thaws, it expands and then contracts, breaking up compaction layers.
 
Strip Till
 
When no-till is not practical, farmers can use strip till. Strip tilling is also growing in popularity as a conservation tillage method. Strip tilling is when a farmer only cultivates thin strips in their field where seeds will be planted. The strips are located where the rows of crops are located. Each year, the strips will shift roughly six inches in one direction.
 
Strip till has become economical in recent years due to the decrease in costs associated with sub-inch GPS navigation. When using strip till, farmers will keep track of each strip using GPS.
 
A common need for cultivation is to mix fertilizers into the soil. Strip till farming involves an increased concentration of fertilizer in fields, requiring less of a need to mix it in. The same amount of fertilizer is used per acre, but since the fertilizer is applied only in the active strips, the nutrients are concentrated.



Strip till is a smarter choice over no-till in areas that are prone to wet or cold springs. Strips will tend to heat up faster than fields of no-till because some soil is exposed to the sun. Moisture dissipates quicker in a strip tilled field than a no-till field, because the soil can heat up faster and has an easier access to the ground.
 
Why conservation tillage methods are used
 
The government will pay farmers a subsidy if they enroll in the Environmental Quality Incentives Program (EQIP) through the USDA Natural Resources Conservation Service (NRCS). Although EQIP is a national program, each state decides on the qualification for farmers and the payments.
 
Minnesota and Iowa allow farmers to enter into EQIP if they convert to no-till or strip till, while Wisconsin only offers EQIP to no-till farmers.
 
Payments vary state by state, but are generally in the $20 to $30 range per acre. Minnesota offers a fixed payment of $23 per acre and Wisconsin pays $19.50, while Iowa offers inclining payments of $15 for the first year, $25 for the second, and $35 for the third. Minnesota and Iowa both have a cap on the maximum acres allowed to be enrolled in EQIP per farmer at 320. EQIP only runs three years and is nonrenewable.
 
Conservation cultivation has many environmental benefits. Erosion is kept at a minimum with decreased tillage. The more crop residue that remains on a farm field means that there will be less water runoff and wind erosion. Locking carbon in crop residue also lowers the emission of greenhouse gasses.
 
Costs and concerns
 
A problem when converting to a conservation tillage method is cost. No-till farming often requires farmers to purchase stronger planters that can penetrate the unturned soil, according to Ohio State University. Strip till almost always requires sub-inch GPS systems on tractors, which has recently decreased in cost to around $10,000.
 
The tradeoffs to startup costs are the money saved and the environmental benefits. Farmers won’t need to drive over their fields as often using a conservation tillage method, compared to a conventional method. The result is money saved in fuel costs. Farmers can also offset startup costs by selling off old plows once they make a decision to use conservation tillage methods full time. Farmers finally save priceless time by not having to till fields as often.
 
Each method of tillage, being conventional or conservation, has its benefits. The tillage method used by farmers most importantly depends on their soils and location. Some farmers may like conservation methods better, but their soil types have drainage problems and they can’t change.
 
Many farmers have weighed the pros and cons of each tillage method, and changes are being made every day. Government subsidies often help offset startup costs and initial yield loss, but many farmers continue with conservation tillage methods well after their eligibility for subsidies runs out.

Read more about agriculture and farmland at farmlandforecast,colvin-co.com.

Irrigation Uses in Farming

Jan 12, 2010
In order for plants to survive, they need sun and water. Unfortunately sun will deplete readily available water for plants in arid or semi-arid climates. Water provides nutrients to a plant so it can grow and carry out its functions. If a plant does not have enough water, it will die. Conversely, too much water will wash nutrients out of the soil and away from a plant.
 
To assist crops in dry areas and during periods of inadequate rainfall, irrigation is used as an artificial application of water to the soil. Irrigation also protects plants against frost, suppresses weed growing in grain fields, and helps in prevent soil consolidation. In contrast, agriculture that relies only on direct rainfall is referred to as rain-fed farming.
 
In the United States, irrigation withdrawals accounted for 40% of total freshwater withdrawals in 2000, according to the United States Geological Survey (USGS). Only 16% of all harvested cropland is irrigated in the U.S., but irrigated land generates almost half of the value of all crops sold because fruits and vegetables often require more water than is available and need to be irrigated, compared to grains.
 
Pressurized spray
 
Spray irrigation is a common type of irrigation in the U.S. Most spray irrigation systems are on a center pivot system where a quarter mile of piping pivots around a center point water source. The irrigation system sprays water over and out to crops while it rotates. Row crops like corn and soybeans are the most common crops to use pressurized spray irrigation.



Spray irrigation wastes water because a great deal of water will evaporate before it gets absorbed by the crops. In addition, spray irrigation systems typically cover 128 to 132 acres in a 160 acre, quarter section, leaving an average of 30 acres not irrigated, according to the USGS. More efficient spray irrigation systems are being built. These systems feature a more gentle flow of water so it will not evaporate as quickly.
 
Flood/Drainage
 
Flood irrigation is when cropland is purposely flooded so all of the exposed soil will absorb water. Water will be pumped on to fields and plants will soak up as much as possible before the water evaporates. This method of irrigation wastes a lot of water by pumping it all over a field. Runoff can be collected, but not all wasted water can be collected, and only about half of the water reaches the root zones of the plants, according to the USGS.
 
Flood irrigation is more popular among developing countries where other irrigation systems have high startup costs, or are unavailable. Rice and wheat crops are the most common crops to be flood or drainage irrigated.



Drip/Microirrigation
 
Drip irrigation is becoming the irrigation of the future. As other irrigation systems tend to waste water by applying too much, or water is evaporated before the plant uses it, drip irrigation systems apply water directly to the root zone of a plant.
 
In a field, perforated hoses are laid out like a grid so they run along the base of a plant, or just below the surface next to the base of a plant. Water is then pumped through the hoses slowly so the water trickles out and can be efficiently absorbed by the plant. Minimal water is lost due to early evaporation.
 
Drip irrigation systems are typically used in fields that grow rows of fruits or vegetables. Tomatoes are a common drip irrigated crop because they demand such high amounts of water. 
 
Here are some benefits of drip/microirrigation systems according to Colorado State University Cooperative Extension:
 
·         Microirrigation is a low pressure, low volume irrigation system suitable for high-return value Crops such as fruit and vegetable Crops.
·         If managed properly, microirrigation can increase yields and decrease water, fertilizer and labor requirements.
·         Microirrigation applies the water only to the plant's root zone and saves water because of the high application efficiency and high water distribution uniformity.
·         Microirrigation can irrigate sloping or irregularly-shaped land areas that cannot be flood irrigated.
·         Any water-soluble fertilizer may be injected through a microirrigation system.



Irrigation can be quite costly. The total cost of irrigating includes diesel fuel, labor, maintenance, and ownership costs. A center pivot irrigation system will cost up to $116.45 per acre, according to University of Arkansas. The purchase price for a new center pivot system that includes a standard well, pump and gearhead, power unit and center pivot can total about $75,000. Flood irrigation with a standard well can run between $59.16 and $97.29.

 

Irrigation use accounts for 60% of all freshwater that is withdrawn in the world. Water is not only used on farm fields, but on lawns as well. In the U.S., up to 1.5 billion gallons of water a day are used for landscaping purposes, according to the Environmental Protection Agency. As freshwater becomes scarcer, irrigation systems will be evaluated and altered to use less water.

Read more about agriculture and farmland at farmlandforecast.colvin-co.com.

U.S. Farmland Best Investment

Jan 05, 2010
For investors interested in farmland, there are a lot of options around the globe. Investors have been recently acquiring farmland in the U.S., Canada, Brazil, Africa, and Eastern Europe. Agriculture, as a whole, is developing as a strong long-term investment, but there has been an on-going debate: What is the best farmland investment in the world?
 
We believe that Midwestern U.S. farmland provides investors the best opportunity and risk to reward. Farmland may be acquired at a cheaper price in other regions of the world, but these opportunities may not have the same soil quality, transportation infrastructure, or government that supports property rights.
 
Only 7% of the Earth's land surface is suitable for cultivation, the remainder is either too hot, too cold, too salty, too steep, or too stony. Roughly 50% of the contiguous United States is suitable for cultivation according to Richard E. Lyng, former Secretary of Agriculture.
 
To understand why U.S. farmland is the best investment, you must analyze these following factors:

·                  Soil Content
·                  Growing Season
·                  Infrastructure
·                  Property Rights
·                  Government Support
 
Soil Content
 
Soil content is the first factor that should be evaluated when trying to understand what specifically makes one piece of farmland better than another?

There are twelve types of soil taxonomy in the world. Of the twelve, the most naturally fertile soils are mollisols, according to Robert McLeese, soil scientist for the Natural Resource Conservation Service (NRCS). Mollisols are predominantly found in only four places on Earth: in the U.S., the Pampas region of Argentina, the steppes of Ukraine and Russia, and in areas of Northeast China.



Mollisols make up 7% of the ice-free land in the world, according to the NRCS. Mollisols are the best soils for farming because they contain large quantities of organic matter.
 
Mollisols found in the Midwestern U.S. are the best for agriculture due to the grasslands that were present thousands of years ago. These prairies produced strong and fertile soils because after each year, the grasses would breakdown and contribute nutrients to the ground. In other areas of the world where mollisols are found, short and mid-sized grass prairies were present. These shorter prairies contributed to the fertile land, but did not contribute the same soil nutrients as the tall grass prairies.
 
Once the Wisconsin Glacier retracted from Illinois and Iowa, great dust storms blew fertile silt on top of the young land, making this land the ideal for farming.
 
Deforestation
 
Almost any region in the world could yield large amounts of corn, but it would require a substantial amount of fertilizer, and would not be cost effective. Areas that have been deforested, such as Brazil, have fairly rich soil, but it runs thin and cannot affectively hold nutrients. Forest soils include ultisols and oxisols, which are not as thick or rich as mollisols. Deforestation can create new cropland, but the components that make up its topsoil cannot be permanently changed. In other words, ultisols and oxisols cannot be turned into rich mollisols.
 
Forest soils are typically much older than prairie soils because glaciers have covered up prairies multiple times, and water filters through them differently. If someone were to simply add nutrients to forest soils in hopes of creating productive farmland, phosphate issues will arise. Forest soils cannot absorb enough phosphate to make it useful for plants because there is not enough organic matter present. The phosphate will clump and become useless to the soil and plants. There is no substitute for mollisols when it comes to first-class farmland.

Africa

In Africa, the soil is not very welcoming for many agriculture crops. Sub-Saharan Africa is classified as having small amounts of favorable humid temperate climate, but primarily dry and humid equatorial climates, according to the Köppen-Geiger climate classification. The favorable humid temperate and humid cold climates stretch across the Midwest and Eastern U.S.
 
Forested areas are poor at producing crops because the top soil is very thin, like Robert McLeese explained. Sub-Saharan Africa is littered with rainforests and temperate forests, according to the Food and Agriculture Organization of the United Nations, which does not make the land there ideal for farming.
 
Areas stricken by extreme erosion are not ideal for farming either. A study found three-quarters of Africa's farmland is plagued by severe soil degradation caused by wind and soil erosion and the loss of vital mineral nutrients, according to an article from the Independent. 

Water retention

Soil must also retain water in order for it to be considered supportive of growing. Water retention is important for growing crops, because plants require readily available water for growth. The size and make up of a soil’s contents give it the ability to retain water. Soil with smaller particles will retain more water because the particles have more surface area to hold the water, according to Dean Yonts, Extension Irrigation Engineer at the Panhandle Research and Extension Center. Small soil particles still only allow roughly half of the moisture to be used by plants, because plant roots cannot draw all of the water from the surface of soil particles. It is important that soil can retain a great deal of water so plant roots can absorb as much water as possible.
 
Besides in the U.S., soil is able to hold water effectively in Argentina's Pampas region, as well as Ukraine and into Russia. In Northeast China there are also spotted areas where the fertile soil is good at retaining water.
 
Growing Season
 
The Midwestern U.S. has a perfect climate for growing a wide variety of crops. The Midwest has an adequate amount of warm humid days that help crops grow across Iowa, Illinois, and Indiana, where 33 to 40 inches of rain fall per year. Crops prosper in these strong soils that run thick and can efficiently hold moisture. Areas of Ukraine and Canada do not receive enough rainfall to support certain crops. Finally, the Midwest freezes hard which kills insects so large amounts of insecticides are not necessary, unlike areas closer to the equator.



Corn typically requires 2,700 growing degree days (GDD) to reach maturity. There are hybrids that require less, but normally yield will be lost. In central Illinois, there are approximately 3,000 GDD according to the USDA Forest Service. The more GDD, the larger the planting and harvest windows become, and the risk of frost is decreased. Of the places where mollisols are present, the Midwest U.S. provides an adequate amount of GDD.
 
In the prairies of Canada, there are mollisols present, and Canada freezes hard enough to kill insects, but the climate is too cold for certain crops to be productive there. The window for growing corn is small with frost threatening planting and maturity. Certain crops that require a shorter growing season, such as wheatdo well in Canadian prairie climates, but their crop choice is restricted because of the cold climate.
 
Warm climates do not provide ideal crop conditions either. In moderation, heat and moisture are vital to a crops life, but too much heat and moisture can harm crops by promoting insects and disease. In corn for example, molds become much more common when hot humid weather persists for long periods of time. Insects are a major problem in warmer climates as well. More insecticide is necessary to control pests in warm climates during all seasons, as there is not a hard winter freeze that kills them each year.
 
The ideal climate for growing crops is one that has enough growing days, receives adequate rainfall, and freezes hard in winter to kill off field pests. Only a few areas globally are able to fulfill the climate needs for crops, and the Midwest U.S. is one of them.
 
Infrastructure
 
Not only is it important to have high quality soil, it is also necessary to have the existing infrastructure to transport and store crops. The U.S. has developed hundreds of thousands of miles of roads and rails for transporting crops. Grain elevators provide storage for crops, so farmers do not have to transport their crop all the way to the destination. Many areas in the world do not have the luxury of a strong agricultural infrastructure.
 
Rail is an efficient way of transporting crops after harvest, especially in areas where roads are not paved or cannot handle heavy trucks. The U.S. has the most rails out of any country in the world, allowing for fast, efficient grain transportation. This is a breakdown of the amount of rails per kilometer in each country according to the CIA World Fact Book:



In the U.S., there is an even 50% distribution of freight on roads and railroads. In Brazil, where there is one-eighth the amount of railroads per square KM, only 20% of freight is hauled on railroads, according to a special report from the Economist. The World Bank's Growth Commission suggests that 25% of a nation's GDP be reinvested in the country and 7% of it should go into infrastructure. Brazil reinvests 20% of its GDP, but only 0.1% into its infrastructure.
 
Africa is another region with a struggling infrastructure. Only one-third of Africans have access to an all-season road, according to the World Bank. Sub-Saharan Africa looses economic growth by two percentage points every year and reduces productivity by as much as 40% because of its lack of its electricity, water, roads and information and communications technology, according to the World Bank's Africa Infrastructure Study.
 
Property Rights
 
Without a stable government, even the best farmland in the world isn't worth investing in. Farmland owners must be aware of the political condition of the country where the farmland is located in. The country must promote agriculture and land ownership rights.
 
Some countries do not fully support land ownership rights. In Brazil there is a 1.5 million strong Landless Movement (MST). The MST uses interpretations of Brazilian law to try to spread out the ownership of farmland through land reform. In Brazil, 3% of landowners own two-thirds of available cropland, according to the MST. Actions by the MST range from peaceful to ruthless. In the northern state of Pernambuco, MST members shot and killed four men earlier this year, according to a recent special report from the Economist. Land owners have complained of land invasions by the MST. Major land owner Fibria, a wood pulp company, reported land invasions by the MST in remote areas of the Bahia state, according to the Economist.
 
Across Russia, gangs are pushing land owners from farmland, according to the independent Moscow News. Russian gangs have seized agricultural land in rural areas around major cities. Once seized, the land is handed over to investors who use the land in nonagricultural ways; typically building on the land. The newspaper also reported that the Russian government is aware of the seizures and no action has been done to stop it.
 
In regions where the political climate is unstable, farmland owners face the risk of their land being seized. The land may be able to be acquired for a low price, but unless the owner is willing to guard their land, they face the risk of losing it. In today's weak global economic environment, property rights will become a significant issue. Farmland in the U.S. allows its owners to sleep well at night knowing that they have solid ownership rights.
 
Government Support
 
The U.S. Government has many farming subsidy programs available for domestic farmers and agribusinesses. These programs help balance the supply and demand of many commodities, as well as promote a greener environment. U.S. Government subsidies have been around for more than 75 years.
 
The Conservation Reserve Program (CRP) pays land owners not to farm their cropland. The payments help land owners protect areas where wildlife can grow and fertile land can take a break from producing crops. CRP contracts run for multiple years and proper upkeep must be done to the land throughout the contract. Other environmental programs include environmental quality incentives and wetland preservation.
 
Other programs subsidize commodities for farmers. A minimum base price will be set for a commodity, like soybeans. If the price of soybeans drops below the base price, then the government will subsidize farmers for the difference to get back to the base price. In addition, subsidies can be paid on top of any commodity price if the government feels that specific commodity's supply needs to be increased. These subsidies act as price insurance and they promote an increase in production.
 
Farm subsidies are given by other countries as well. China drastically changed their agriculture sector in 2004, by introducing subsidies and lifting agricultural taxes, according to the USDA's Economic Research Service (ERS). Ukraine has recently been trying to rebuild their subsidies since government subsidies were dissolved in the early 1990's after the Soviet Union broke up, according to the USDA's Foreign Agricultural Service (FAS).
 
U.S. Farmland Best Risk to Reward
 
A lot of factors need to be addressed when assessing a purchase of farmland around the world. We see U.S. farmland as the best opportunity for investors as it has some of the best soil in the world, the perfect climate for fertile crops, the adequate infrastructure for transporting grain, and a government that supports its farmers and property rights.

Read more about agriculture and farmland at farmlandforecast.colvin-co.com.
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