The state of the ag economy is not all doom and gloom, but forecasts for the year ahead aren’t particularly rosy, either. Nonetheless, speakers at the annual American Society of Farm Managers and Rural Appraisers (ASFMRA) meeting were positive about the future and offered event attendees practical and useful information to think about and, in many cases, use once they returned home. Here is a handful of key takeaways some of the presenters shared.
#1. Consider current commodity prices to be the “new normal.” Steve Elmore, chief ag economist for DuPont Pioneer and keynote speaker for the event, says the industry probably won’t see $4 corn again anytime soon. He adds that while some university economists are saying prices will move slightly upward next year, he disagrees with their predictions. Acreage-wise, based on commodity prices, Elmore predicts corn and wheat acres will be down in 2017; soybean acres will be up.
#2. Trade in the year ahead is a big unknown, but expect competition among exporters to be strong as they deal with increasing excess supply of most commodities. “That’ll be a big issue for U.S. agriculture going forward, especially with the expected value of the dollar going higher,” Elmore says. He says potential policy changes, as president-elect Donald Trump takes office, and currency movements pose the biggest uncertainties for global ag trade. China will be a swing factor in all grains, particularly with soybeans. “Every other row of our soybeans [raw beans] is exported and probably goes to China,” Elmore says, highlighting the importance of China to U.S. trade. As for the Trans-Pacific Partnership (TPP), it’s almost a guarantee Trump won’t support it, says Mary Kay Thatcher, senior director of congressional relations for the American Farm Bureau Federation (AFBF). “Unless we can get TPP through during ‘lame duck,’ it probably won’t happen for the next couple of years,” she notes.
#3. The 2018 U.S. farm bill is important for agriculture. That’s despite the fact that between 77% and 80% of current farm bill dollars are tied up in nutrition programs, such as the Supplemental Nutrition Assistance Program (SNAP), Thatcher says. Some members of the House and Senate want to split farm programs and nutrition apart, but that’s not a good idea, she contends. “If we split them, we won’t have enough votes--especially in the House of Representatives which is largely urban--to pass an adequate farm bill with a good safety net for farmers.” Crop insurance is a key safety net, Elmore adds. “It’s a good program for us, and farmers need to know how to take advantage of it.”
#4. Water quality is a huge issue, and it’s not going away. The potential good news is that president-elect Trump has promised to ease or eliminate burdensome regulations such as the Clean Water Rule’s Waters of the U.S. “We were on a narrow path toward more regulation until now; the election really changes the landscape and shakes things up,” says Kristine Tidgren, assistant director for the Iowa State University Center for Agricultural Law and Taxation. She adds that the president-elect has said he will reduce regulation and appoint an EPA chief friendly to farmers and land owners.
#5. Purchasing a drone could be a good business decision. Leonard Meador, a business management consultant based in Indiana, says that for a person who’s 6-feet tall, his vision is confined to a 15-foot radius—if his view isn’t obstructed by crops. “From an appraisal standpoint we can look down on property and see features we need to record to provide a more complete report. This kind of reconnaissance can shorten up a work day.” Meador highlights a variety of ways to put drones to work: to find wetlands or dry areas you wouldn’t see without walking every foot of the property; identify areas of crops damaged by winds, pests and disease; photograph tile installations as a reference, in case any of the tile needs to be dug up for repair in the future; check bin storage systems and identify rusted out areas or even faulty monitors and sensors. Meador says to expect to invest $5,000 for a starter drone with a good camera; for infrared capabilities, expect to pay $10,000. For the software to manage data, plan to invest about $1,500 to $2,000 per year.
#6. The use of precision technology and agronomic data are increasing but are still not mainstream on the farm. For instance, variable-rate planting is used on only 13% of acres industry-wide, according to Dan Frieberg, president of Premier Crop Systems. “It makes more sense to use now than a decade ago, because there’s so much more value in the seed. It’s never about saving money on seed… it’s about reinvesting input dollars more efficiently in the field,” he says. One way to evaluate seeding populations or new products is to implement what Frieberg calls (and has trademarked) learning blocks. He uses a check block, between 1 and 2 acres—about the size of a football field--as a comparison area within management zones. “We’ve done a lot of strip trials, but the learning blocks work better with [management zones] because you’re not getting the variability from going across the field,” Frieberg says.
#7. Farm managers and rural appraisers who belong to the ASFMRA tend to be at the top of their field. Many ASFMRA members carry the distinction of being accredited, the highest recognition given by the Society. The designation is achieved only after years of professional service, many rigorous hours of education and comprehensive testing. The Society often refers to its members as being “the most trusted rural property professionals” in agriculture. More information on the Society is available at www.asfmra.org.