Recent Farmland Auction Results
UFARM associates, Ethan Sorensen and Chris Scow recently assisted Brian Poppe, of Poppe Realty & Management in Falls City, Nebraska, with a land auction involving 80 acres of prime non-irrigated farmland in Richardson County, NE. The sale was well attended with multiple parties placing bids. At the end of the day, the parcel sold for $10,000/acre. Chris Scow, Operations Manager/Managing Broker stated, “This was as nice an “80” as you will find in Richardson County. Demand appears to have remained strong for high quality land in this part of our state.” If you have questions about land values in around the region, please contact us.
Nebraska Drought Monitor Gives Big Picture Around State
Courtesy of http://droughtmonitor.unl.edu/Home/StateDroughtMonitor.aspx?NE
It’s no secret that 2017 is proving to be a dry growing season for producers across Nebraska and the upper Midwest. The dry conditions have been marked by pockets of heavy rainfall in isolated areas, resulting in an overall decrease in the corn crop condition. The percent of corn rated at good to excellent fell four percentage points in the Cornhusker state in July.
As producers continue the irrigation battle in their fields, the resources and tools available to them to aid in the fight are growing each day. The University of Nebraska-Lincoln’s very own National Drought Mitigation Center (NDMC) is dedicated to helping farmers and institutions develop and implement measure to reduce vulnerability to drought conditions. Overall, the NDMC stresses the importance of preparedness and risk management.
In order to achieve their mission, the NDMC maintains a flourishing and continually growing website, actively engages in drought monitoring—helping the US Drought monitor with its preparations—and has developed the US Drought Impact Reporter: a set of web-based drought management decision making tools.
Their latest venture is QuickDRI, the Quick Drought Response Index, a new weekly early warning system that purports to be sensitive to the earliest-stage drought conditions and rapidly evolving drought events.
The index combines and analyzes four main drought indicators: Precipitation, soil moisture, vegetation health, and evaporative moisture loss from plants. By taking these four main variables into account, they allow producers and crop analysts to better understand the extent of drought conditions before most traditional monitoring methods.
Lead operations contact Jesslyn Brown claims that QuickDRI fills a gap in drought monitoring, owing to its sensitivity to detect short-term changes.
“We expect it to be especially helpful for decisions related to irrigation and fire management,” explains Brown.
More importantly, though, is that QuickDRI will help to improve the US Drought monitor. In turn, the allocation of relief dollars from the USDA Farm Service Agency will be able to be allocated more quickly, and to those in need of the relief most.
While preparedness cannot make rain fall from the sky, it can help to alleviate the stress that can come from inadequate moisture. Producers implementing the latest soil-moisture technology may rest easier knowing exactly what’s occurring under the soil, and having access to highly accurate drought monitoring is yet another tool in producers’ arsenal.
Until it starts raining again, farmers and ranchers agree that it’s good to know that researchers at UNL are in their corner, forging ahead with new ways to see under the soil and help improve their operations.
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. If you have questions about yields and productivity on your rented farmland, give the UFARM managers contact us today!
Sources consulted: NDMC. National Drought Mitigation Center. University of Nebraska-Lincoln. Web. 27 Jul. 2017. Richter-Ryerson, Shawna. “Warning System Gets the Early Drop on Drought.” Nebraska Today. University of Nebraska-Lincoln. 12 Jul. 2017. Web. 27 Jul. 2017.
Cost-Saving Irrigation Measures Growing in Popularity on Nebraska Farms
Farmers across the state aren’t getting much of a post-planting reprieve, as temperatures continue to heat up and rainfall continues to stay away lately across most of the Cornhusker state. As such, irrigation motors are firing up rapidly as producers fret about their emerging crops amidst the hot, dry conditions.
Peer pressure is most certainly a factor, it seems, when it comes to irrigation. Many producers convince themselves that their soil moisture is adequate for another day or two, but when the neighboring pivot fires up that evening, it can be difficult to not follow suit.
Many times, however, soil moisture conditions are adequate, and, increasingly, farmers across the state and nation are trading in guessing for certainty by utilizing the latest moisture monitoring technology, with significant cost-saving results.
A popular source for this innovation around Nebraska is through San Diego-based company AquaSpy, whose high-tech soil moisture probes deliver real-time data to producers, revealing the detailed moisture content and temperature of their fields at different depths and times of day. Farmers are then able to determine vital information about their crops, including how deep the roots have penetrated and how well the plants are utilizing the fertilizer at varying depths.
This probe-data is wirelessly sent in real-time to an easy-to-manage dashboard, which may then be accessed on any computer or mobile device, allowing users to monitor their fields at any time and place.
Armed with this detailed analysis, producers are able to actively manage their irrigation efforts based on hard data, not conjecture.
North-Central Nebraska farmer and AquaSpy user Tim Schmeeckle revealed that he ran his center-pivots three fewer times with AquaSpy than the year before. With the costs associated with pumping and labor to run each pivot estimated to be around $1,000, Schmeekle estimates a savings of $30,000 that year.
“It is kind of like a fuel gauge on your car,” he said. “We know how much moisture we started with. We know how much the roots are taking out of the ground, and we know how deep we are putting that water back in.”
The Nebraska Ag Water Management Network has estimated a water-savings of 2 inches per acre for those utilizing any soil moisture monitoring technology—a cost saving measure that adds up to $10-$30 per acre.
According to the University of Nebraska-Lincoln’s Institute of Agriculture and Natural Resources, moisture sensor technology not only reduces pumping costs, but may also improve crop growth and yield by helping farmers avoid the detrimental effects caused by overwatering upon soil conditions and nutrient leaching.
Producers who are ready to give such technology a try are encouraged to install their sensors early on in the season to ensure proper operation. Early installation helps minimize root damage, allows time for the sensors to acclimate to the soil moisture conditions, and ensures a better chance for proper soil contact.
Controlling input costs and keeping a tight rein on irrigation output has a significant effect on a producer’s bottom line—now more than ever. If you are considering utilizing moisture sensing data into your operation, please let us help you decide the best way to move forward with this exciting technology.
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. If you have questions about yields and productivity on your rented farmland, give the UFARM managers contact us today!
Sources consulted: Freeman, Mike. “Drought-Stricken Fields Get Boost From Technology.” The San Diego Union-Tribune. The San Diego Union Tribune. 17 Jul. 2014. Web. 13 Jun. 2017. Nygren, Aaron. “Value of Using Sensors for Irrigation and Tips for Proper Installation.” Cropwatch. University of Nebraska-Lincoln. 8 Jun. 2017. Web. 13 Jun. 2017.
LB461: Could Nebraska Property Tax Relief Actually Be Happening?
If you’re a farmer or landowner in Nebraska, chances are you have a keen eye focused on the Nebraska Legislature lately, as Governor Ricketts’ Property Tax reform bill, LB461, saw first round debate in Nebraska legislative talks on Friday, April 21st. This fact, in itself, marks an important milestone, as it’s the first time in the past 10 years that a bill addressing property tax relief has seen floor debate.
Obviously, Ricketts and many other state senators have heard a loud and clear message from their constituents: It’s time for Nebraska to shed its rank as the 5th-highest taxing state in the nation and focus on providing real tax relief to farmers and landowners.
The bill—officially the 2017 Nebraska Taxpayer Reform Act, LB461—is slated as a comprehensive tax reform package. According to Ricketts, the bill would seek to:
- Change the property valuation method from a market-based system to an income-potential assessment, said to be a more fair measure, and used by the majority of surrounding states
- Cap the statewide land valuation growth at 3.5 percent, which, had this been in place during the last ten years, would have changed the ag land valuations from 252 percent to 36 percent
- Protects K-12 education, by investing more than 30 million dollars into the state aid formula
Had LB461 been in place in 2017, according to proponents, it would have reduced state ag land valuations by $12 billion and have reduced ag land property taxes by 12 percent statewide—a $147 million tax savings for farmers and landowners.
The Platte Institute, a non-profit, non-partisan independent think tank based in Omaha, delved further into the nuances of the bill, finding that, because the bill requires state revenue projections to meet certain growth targets (revenue growth “triggers”,) the result would benefit taxpayers without compromising the state budget.
These revenue growth triggers are said to enable tax rate reductions without making cuts to state spending by dedicating a portion of new state revenue growth to tax reform—so long as state revenues meet certain benchmarks. Of the states who have employed such revenue growth triggers, those built into LB461 would be “the most cautious yet adopted by any state,” according to the Tax Foundation’s testimony to the Revenue Committee in February.
That being said, the bill still has its detractors, who say that the bill represents a tax cut to the wealthy. According to the Nebraska Farmers Union, the bill places more emphasis on income tax reduction than property tax reduction, and jeopardizes future school funding. According to the Nebraska Farmers Union website, LB461 would create further imbalance between income, sales, and property taxes by giving $400 million of income tax cuts, thereby putting even more pressure on property taxes to address potential state budget shortfalls.
However one looks at the issue, it’s clear that state senators have recognized the need for meaningful property tax relief, and will continue to focus their efforts to provide relief to farmers and landowners.
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. If you have questions about yields and productivity on your rented farmland, give the UFARM managers contact us today!
Sources consulted: “Quick Guide to LB461.” Nebraskafarmersunion.org. Nebraska Farmers Union. 19 Apr. 2017. Web. 26 Apr. 2017. Weinburg, Adam. “News Conference Call: LB461 Will Grow State & Family Budgets.” Platteinstitute.org. Platte Institute. 17 Apr. 2017. Web. 26 Apr. 2017.
Nebraska Planting Progress 2017
It’s early, but Nebraska farmers have moved the planters into the field for the 2017 growing season. According to the USDA/NASS (National Agricultural Statistics Service) weekly report, ending Sunday, April 16th, 3 percent of Nebraska’s corn was in the ground, behind last year’s 6 percent, but consistent with the 5 year average.
Nationally, of the top 18 states producing corn, corn planted stood at just 6 percent planted—6 percentage points behind last year’s 12 percent corn planted by 4/16, and 3 percentage points behind the 9 percent 5 year average.
For other crops, Nebraska’s winter wheat condition is rating favorably, with 7 percent of the crop jointed, well behind last year’s 17 percent and behind the 13 percent 5 year average. Seven percent rated in excellent condition, 46 percent good, 38 percent fair, 8 percent poor, and 1 percent very poor.
Nebraska farmers have planted 70 percent of their oats, just ahead of last year’s 68 percent and the 66 percent five year average. Twenty-six percent has emerged, ahead of 20 percent last year and near the 22 percent 5 year average.
As of 4/20, corn and soybeans were trading higher overnight following last week’s lows. Analysts suspect that the optimism may be the result of bargain hunters seeking contracts on the sense that prices are too low, as well as the forecasted rains for the southern plains and delta areas, which could further slow planting progress. Showers are expected across a large swath of the corn- and bean-planting states, further saturating already-wet soils.
In this vein, along with heightened precipitation chances across corn-planting areas, temperatures are expected to remain cooler than normal, further limiting drying potential.
While this may delay planting overall, it may assuage continued low grain prices.
We’ll continue to monitor the planting progress to keep you informed. Please feel free to contact us with any of your questions or concerns.
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. If you have questions about yields and productivity on your rented farmland, give the UFARM managers contact us today!
Sources consulted: “Corn Planting Starts; Winter Wheat Condition 53% Good to Excellent.” CropWatch.com. University of Nebraska-Lincoln. 17 Apr. 2017. Web. 20 Apr. 2017. Dreibus, Tony. “3 Big Things Today, April 20th.” Agriculture.com. Meredith Agrimedia. 20 Apr. 2017. Web. 20 Apr. 2017.
Nebraska Farmland Market Trends
As farmers and landowners gear up for the 2017 growing season, the land they are preparing continues its downward trend in value that has characterized the last three years. How much have Nebraska farmland values decreased since 2016? The University of Nebraska-Lincoln’s annual Nebraska Farm Real Estate Market Survey delved deeper into the land market trends in the Cornhusker state.
According to preliminary findings from the survey, the weighted average farmland value had declined by approximately 10 percent over the past year, to $2,805 per acre, marking the third consecutive year of of decline, and down a total of approximately 15 percent since its peak in 2014 at $3,315 per acre.
When taking into account land classifications, dryland cropland with irrigation potential took the biggest hit, with a 13 percent decline. This was followed closely by tillable grazing land, which declined 12 percent.
Sustained lower commodity prices seem to be the main reason for these declines, with producers less likely to develop these land classes due to less economic incentive. Survey participants also indicated lowered expectations that commodity prices will improve for the foreseeable future, also contributing to these value declines. Participants also cited regulatory policies in place that would further retard development of this particular land class.
Following dryland cropland with irrigation potential and tillable grazing land, dryland cropland without irrigation potential and nontillable grazing land had the third largest price decline since February 2016 at 10 percent, with the sharpest rates of decline occurring in the Central, Southwest, and Southern districts at a rate of 15 percent.
Lastly, gravity and center pivot irrigated cropland reported the lowest rate of decline, ranging between 6 and 4 percent. Northwest, Southwest, and Southeast parts of the state dropped more than other districts, at 13-16 percent vs. 5-7 percent. Participants to the survey were pessimistic about these rates improving in the near future, citing the availability of water and policies affecting its use as potential negative forces. However, participants also stated that technological advancements in irrigation management may alleviate some of these challenges.
Similarly, rental rates for agland in Nebraska also declined due to sustained lower commodity prices. As property tax levels continue to be a burden on landowners, negotiating equitable rental rates remain challenging.
Irrigated cropland rental rates declined between 5 and 10 percent, with center pivot irrigated cropland declining from 9-12 percent. Pasture and cow-calf rental rates also fell 5-15 percent across Nebraska, with the strongest rate of decline occurring in regions noting the highest grazing rates over the past several years.
Certainly, these trends aren’t welcome news to farmers and landowners. Hopefully, the Nebraska Legislature will continue to push for solutions to the ever-burgeoning property taxes that burden producers across the state, which would go a very long way in alleviating the issues facing Nebraska farmers.
If you have concerns about the financial health of your farming operation, please don’t hesitate to give us a call. We are happy to put together a plan with you to help you weather the storm.
Source consulted: “2017 Trends in Nebraska Farmland Markets: Declining Agricultural Land Values and Rental Rates.” Agricultural Economics. University of Nebraska-Lincoln. 15 Mar. 2017. Web. 28 Mar. 2017.
Is Property Tax Relief In Sight for Nebraska Landowners?
As farmers and landowners look toward the 2017 growing season, they’re also keeping a close eye on the Nebraska State Legislature. Several bills addressing property tax relief are on the Legislative agenda, and farmers and landowners are keenly interested in seeing some form of progress in this arena.
Leading the charge is newly elected state senator and Albion farmer Tom Briese, who has introduced two bills to address the imbalance in Nebraska’s tax structure, citing Nebraska’s 5th-worst ranking for property taxes. He says:
According to Nebraska Farm Bureau, Nebraskans pay roughly 2.5 times more in property taxes than in state sales taxes. If we include local sales taxes, U.S. Census Bureau data suggests Nebraskans pay 56 percent more in property taxes than in sales taxes. Census Bureau data also indicates we pay 36 percent more in sales taxes than in state individual and corporate income taxes combined.
Seeking to lessen these tax burdens, Briese’s LB 313 would raise sales tax revenue by increasing the sales tax rate to 6.5 percent. This bill, coupled with LB 312, which would expand the sales tax base to include more goods and services, would provide significant tax relief in a fair, consistent way—that isn’t fueled by special interests.
Briese proposes that both bills provide for diverting a portion of the revenue raised to reimburse consumers with a newly created property tax credit fund, to be distributed to owners of real property.
Briese also argues that tax relief cannot be just about changing the tax structure; it must also address spending.
Jim Vokel, Chief Executive Officer of the Omaha-based think tank Platte Institute for Economic Research, agrees that Nebraskans need property tax relief, but disagrees with Briese’s approach of higher sales taxes.
“Tax reform should be achieved through broader bases, lower tax rates, and controlled spending, not increased tax rates and more spending,” contends Vokel.
Other bills up for discussion are LB338 and LB640. LB338, also known as the “Agricultural Valuation Fairness Act,” proposes that “all agricultural and horticultural land will be assessed based on its capacity to produce income.” This bill would limit aggregate annual valuation increases to 3.5 percent.
LB640 prioritize funds from the Property Tax Credit Relief fund to the state education funding formula, the goal being to reduce education tax levies in equalized districts, and capping the percentage of property tax support in unequalized districts.
Introduced by State Senator Mike Groene, LB640 would “give long range tax equity in school funding.” According to the bill’s statement of intent, “It eliminates the effect of valuation inflation, it puts local control into local school funding by making local school boards justify any additional property tax asking to fill the gap above the 75% factor. It will also eliminate some of the shielding effect that the property tax credit gives local government entities for spending increases.”
Hopefully, state lawmakers can come to a consensus about the best way to move forward with these proposals, and provide more relief to hard-working farmers and landowners across the state.
Sources consulted: Briese, Tom. “It’s time the Legislature provides property tax relief.” Omaha.com. Omaha World Herald. 03 Mar. 2017. Web. 09 Mar. 2017. “LB313 – Increase the sales tax rate and provide property tax credits.” Platteinstitute.org. Platte Institute for Economic Research. 22 Feb. 2017. Web. 09 Mar. 2017.