WATCH this new #UFARM “Feature Friday” with Ethan. Get some great insight into farm management and a featured property for sale. Learn more at ufarm.com.

  1. Leasing Your Farm to a Family Member/Neighbor: This situation can make it hard for you to set a rate that is fair to both parties involved. The family member/neighbor renting the land may take it personal when you want to change the rent. When a third party is involved, both parties can ensure that the lease is fair and no personal relationship harm is done.
  2. Profitable Ownership: Dealing with a large number of farms/ranches, we are experienced in determining a market-derived rent that will help you realize profitable ownership for years to come. Crop prices/inputs change every year, and in some cases the rent should also. We also offer a Flexible Lease option which has proven to be mutually beneficial to the landowner and tenant. If crop prices go up, you will receive a “bonus” rent payment. Our approach yields a good return and a long lasting partnership with the farmer who is leasing your farmland.
  3. Keeping Your Farm Fertile: With the current situation of low crop prices, some tenants have cut the amount of fertilizer they apply since it is “Rented Ground”. They may have also baled up the cornstalk residue and removed it from the farm. This will cause your farm to become less valuable/fertile. It will also make it harder to rent your land out, because potential tenants may have seen what previous tenants have done to your land. UFARM makes sure the correct amount of fertilizer is applied every year to ensure your farm stays fertile. Together, we will make your farm as profitable and fertile as possible.
  4. Keeping Up With Technology: Over the years, farming has changed drastically. In the past 3-7 years, a large number of irrigation pivots have been updated so they can be remotely controlled. The tenant may have changed your pivot over without you even knowing. This has caused pivot malfunctions in some cases if the pivot technology was not installed properly. We take steps to ensure technology is used correctly to protect your assets.
  5. Making Your Farm Sustainable: With the recent droughts that have occurred, we have worked with tenants to make sure they are utilizing water to the fullest. Technologies such as “Soil Moisture Monitors” and “Water Meters” have allowed our tenants to utilize water to its fullest and make sure we are doing our best to conserve our precious natural resource. We have encouraged the use of “Cover Crops” to increase the productivity of our farms and to also prevent erosion.
  6. Keeping Your Equipment Maintained: The cost of replacing an irrigation pivot is over $75,000, the cost of replacing an irrigation well is over $60,000, and the cost of a new irrigation power unit is close to $30,000. It is important that this equipment is well-maintained and properly serviced to ensure a full lifespan. At UFARM, we check your equipment to make sure the tenant is properly taking care of your investment. We get our hands dirty so you don’t have to.
  7. Is Your Lease Legally Protected?: Our leases are written by lawyers to ensure our landowners are legally protected. Our lease guarantees you will receive your rent every year. When you receive a bill for fixing your equipment, we will make sure that your equipment was actually worked on. We can also make sure the tenant pays for part of the expenses, especially if it was due to the tenant’s failure to maintain the equipment.
  8. The Future Of Your Land: The land management services that we provide will ensure profitable ownership for years to come. We will continually look for ways to improve your land investment. Maybe your land could use some tile in order to bring some land back into production, maybe the irrigation equipment needs an overhaul, or maybe part of the farm could use some manure or lime. Whatever the issue, an experienced UFARM land manager can help you today. We will visit the farm several times per year so you can have peace of mind that your land is being taken care of. We make sure the ditches get mowed, the weeds sprayed, and the equipment serviced. Our office staff will provide you with a detailed income statement that will make it easy for your tax accountant to file your taxes.

 

Nebraska Land Manager

It’s no secret to farmers and landowners that current farm economics are tough. Profit margins are tight this growing season, and myriad reports corroborate this fact. From 2011-14, US farm income experienced a golden period, driven by good commodity prices and strong exports.

Now, according to the Congressional Research Service’s 2016 Farm Income Outlook, it is projected that exports are set to be 6 percent lower from 2015 and well below 2014’s record $152.5 billion, a fact attributed to a strengthening US dollar and weakening economies in several major foreign import countries, including China.

The report also found that national net farm income is also projected to be down—$54.8 billion in 2016—a 3 percent decline from last year. This means that US farm incomes, a key indicator of US farm well-being, will be the lowest since 2002, and is the third year in a row that farms have experienced a decline.

As Nebraska farmers and landowners can attest, land values comprise a significant portion of a farm’s asset base. As such, a change in farmland values is an important gauge of a farm’s finances. Naturally, lower farm incomes mean lower land values, and in this way, the report found that overall farm wealth is likewise set to decline for the second straight year, about 2 percent from 2015.

In this way, reports have found that farmland values of both non-irrigated and irrigated cropland decreased 4 and 2 percent respectively, from 2015. It is expected that cash rents, too, will decrease in 2016, this according to the University of Illinois’ Gary Schnitkey

“However,” Schnitkey says, “projected rent decreases are not large enough to cause farmers to have positive returns in 2016 given current projections of commodity prices and costs. The lagged relationship between returns and cash rents still exists.”

While the outlook is most certainly a pessimistic one, there is always a small silver lining—a mild decline of 3 percent in farm cash expenses in 2016 is expected. Government payments from the 2014 farm bill in the form of revenue support programs are also expected to trigger payments upwards of $9 billion in 2016.

Overall, though, farmers are resilient. Paul Pittman, CEO of Farmland Partners Inc. says that, as tight as things are getting, “Farmers won’t see the same kind of economic crisis they did in the 1980s.” After years of high prices, and only very slight increases in interest rates, most farms in the US are in better financial shape in which to weather the storm.

In summary, the reasons for the tough times are many—production outpacing consumption, a strong US dollar’s effects on exports, lower commodity prices, and a drop in land values—but all boil down to the fundamentals of supply and demand. In a world with a growing population, people must eat, and farmers optimistically hope to weather through this storm until the scale tips in their favor once again.  The recent uptick in soybean prices is a positive sign and corn is trending upward as well.  The summer weather is the wildcard that no one can predict for sure.

Sources consulted:  Bjerga, Alan. “The Crop Surplus is Bad News for America’s Farms.” Bloomberg.com. Bloomberg. 11 Jan. 2016. Web. 23 May 2016.  Schnepf, Randy. “US Farm Income Outlook for 2016.” Fas.org. Congressional Research Service. 16 Feb. 2016. Web. 23 May 2016. Wright, Kevin. “Tightening in the Ag Belt.” KansasCityFed.org. Federal Reserve Bank of Kansas City. Spring 2016. Web. 23 May 2016.

Farmland investment

If you farm in Nebraska, or anywhere across the Midwest, chances are you have chosen to plant genetically modified crops on your land. According to the U.S. Department of Agriculture, 88 percent of corn, 94 percent of cotton, and 93 percent of soybeans planted in the U.S. in 2012 were genetically modified. Adoption rates in Nebraska and Iowa were higher in 2013: 93 percent of corn and 96 percent of soybeans in Nebraska and 91 percent of corn and 93 percent of soybeans in Iowa.

As a producer, you have determined to adopt GM seed because they increase your yields, production, and bottom line. Farmers find they apply less pesticide, herbicide, and water to their GM crops, and use less fuel. As a producer, adopting GM crops on your operation makes sense. However, the use of GM crops is a controversial topic, often among those who have very little ties to agriculture. As such, it is helpful to be well-informed on the topic in order to fairly address the issues raised, and to ensure that the best interests of all are met.

GM crops have exploded on the agriculture scene over the last 20 years. Humankind has selected for certain traits in plants and animals for centuries. Since the discovery of the double helix model for DNA in the 1950s, scientists have been modifying genetics in the lab; as such, they are able to see results more quickly than ever before. It wasn’t long before the scientific applications of the new technology were recognized for the agriculture industry.

This was most evident with the introduction of the Roundup Ready soybean by the Monsanto company in 1996. In essence, biotechnologists used GM technology to introduce herbicide- and insecticide-resistant traits found naturally in other organisms into crops. In this case, they inserted an herbicide resistant gene into a soybean, thus making them resistant to the popular Roundup herbicide. As a result, farmers were able to apply the herbicide to their crops without harming them. Producers were eager to adopt the crop since it saved them significantly on input costs and increased their yields. Producers, scientists, and consumers were happy that so much less pesticide had to be applied to the crops, citing health concerns of doing so.

Now, the topic of GM crops has drawn new public concern. While studies from reputable sources have determined trace amounts of GM organisms in food are safe, many groups are demanding that foods containing them be labeled. While consumers are right to want to know what is in their food, labeling prejudices GM technology. Agriculture advocates are asking farmers to educate themselves on the issue, and point out the benefits of GM crops. Scientists themselves overwhelmingly support the use of GM technology, and in the face of an increasing world population, the use of GM technology is imperative.

While that GMO controversy persists, farmers will continue to keep an eye on the headlines as they park the combines this fall. Contact UFARM if you have any questions about applying the latest technology on your operation.

Source consulted:  Aspnes, Sam, & Angela Hensel. “The explosion of genetically modified crops has changed agriculture, but not without controversy.” Omaha.com. Omaha World-Herald. 18 May. 2014. Web. 11 Nov. 2015.


Randy in field-cropped

Farmers across the Midwest are in the thick of harvest activity, and the weather has been favorable enough in Nebraska over the last week for producers to make good progress in the fields. It’s a busy time of year, and no exception for land managers, who are also working harvest hours for their clients. We checked in with one of our own land managers here at UFARM for an update on his harvest activities:

“I’ve been out in the country doing farm visits to see how harvest is progressing. While doing the visits, I’m making sure that the grain is getting to the right elevators if we have grain contracted, checking on the moisture content of the grain, and also getting a feel for what the expected yields might be on that farm.”

Strong winds swept through the state Sunday evening and all day Monday, when northeast parts of the state were in a red flag wind warning. Producers and farm managers were on the lookout for green snap on their corn as a result of the high sustained winds and the few very strong gusts. Any damage sustained may be turned into insurance, if necessary.

UFARM land managers are also undertaking much of the paperwork required for various farm programs, as well as the more basic accounting that must take place at the end of the growing season.

“In my area there are wheat acres that are being drilled and I’m in the process of getting those acres and plant dates from the tenants for Federal Crop Insurance reporting. There are always invoices that are being sent to the offices to finish out the expenses that were incurred during the growing season. Those need to be approved and paid. [Over the last month,] we finished up enrolling our farms in the most recent farm programs (ARC/PLC). We’re currently in the process of getting AGI’s (adjusted gross incomes) forms from the owners that have a share of any government payments that are to be paid.”

For many producers, enlisting the help of a land manager to take on these types of tasks provides peace of mind and takes away some of the workload, especially during busy times of year when they are needed in the field. Other landowners, who may rent out their ground, might have other full time jobs and simply don’t have the time to dedicate to these extra duties. Farm managers step in at this point to lend a hand.

Farm managers also help landowners look ahead to the coming growing season.

“As the crops get harvested and sales of the grains come into our offices we will be budgeting for the next calendar year to cover the input costs that will be needed for that year. For some owners the balance of the funds will be disbursed this fall and for some it will be in the spring.”

UFARM land managers are also dedicated to staying sharp and up-to-date with the latest educational opportunities available to them. They are ready to help clients interested in buying and selling land as well.

“This morning I just finished doing continuing education that is required by the Nebraska Real Estate Commission. The Commission requires licensee’s to have at least 18 hours of continuing education every two years.”

At UFARM, we strive to do our best for your farming operation. If you’re feeling the stress of harvest, and interested in delegating some of your necessary tasks to a qualified person, please don’t hesitate to contact UFARM for a free consultation at your convenience.

UFARM offers a full range of Nebraska land management services, including real estate sales, rural property appraisals, consultations and crop insurance. UFARM has operated in Nebraska since the early 1930’s. Contact us today!