Economics and Farmland Prices Dominated Conference
Jeffrey Berg (left), ARA, receives a commemorative plaque for his 2012 ASFMRA presidency from newly installed President Paul Joerger, AFM. Joerger is director of asset management and vice president with John Hancock, Boston. Economists and outlook specialists provided various views on land values, world grain production and third-world development as part of the 83rd Annual Meeting of the American Society of Farm Managers and Rural Appraisers organized along with the AgroNomics agricultural investment conference.
Some attention-grabbing comments and short statements from key speakers that seemed to inspire conversation by attendees in Indianapolis at the end of October are paraphrased and quoted.
STEVE ELMORE, AGRICULTURAL GLOBAL ECONOMICS LEAD FOR DUPONT PIONEER
Steve Elmore Projections are that wheat will pull acres out of U.S. corn and soybeans planted acres in 2013.
Ag production and food consumption per capita are on the increase with beef being the least rapidly meat consumption increase in the world.
Livestock producers will continue to decrease inventory, which will bring ending stocks of corn and wheat to levels of less concern. “We are at the lowest we’ve been in corn per animal unit, including DDGs in the calculations, even back to 1988. What it shows us is that we probably need more contraction in the livestock industry than we have seen because current animal numbers aren’t sustainable.”
Brent Bidner, AFM, center, Hertz Farm Management vice president, Monticello, Ill., was announced as the 2012 Professional Farm Manager of the Year at the ASFMRA annual meeting. Along with Bidner, are (from left) sponsor representatives Craig Abell, Syngenta; Rick Patton, AgProfessional; Brent Rockers, Syngenta; and 2012 ASFMRA President Jeffery Berg. The U.S. is being surpassed in soybean production by Brazil, and U.S. percentage of total soybean production in the world is decreasing. “In 1992, the U.S. produced 51 percent of the soybeans in the world. Now we produce 29 percent of the soybeans. Back in 1992, South America produced 30 percent of the soybeans in the world, and they now produce 55 percent.”
The record high year for U.S. export of corn was 2007, and the U.S. share of world corn export was 63 percent. That percentage has dropped to 35 percent in 2012 partly because of South American and Black Sea country competition.
MICHAEL SWANSON, AG ECONOMIST AND CONSULTANT FOR WELLS FARGO
Michael Swanson Farmland values are continuing to increase because of income potential from grain production and because of ultra low available financing. “Farm income has been a big driver in the increase in the value of farm and ranch assets. But a bigger piece, twice as much of the valuation in the current model, is coming from the ultralow financing situation we find ourselves in.”