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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.

Nebraska Planting Progress

After a quick start, corn and soybean producers across Nebraska and the nation are barred out of the fields to complete their last acres of planting, courtesy of a rainy, cool weather pattern. The latest weekly USDA crop progress report, postponed by one day due to the Memorial Day holiday, reflected this slowdown, both for Nebraska farmers and those in the 18 other states reported on.

Despite the slowdown, the nation’s crop producers are still ahead of the previous average, and emergence for both corn and soybeans made great bounds in the last week, according to the report numbers.

Taking a closer look at the national corn numbers, as of the week ending Sunday, May 24th, 92 percent of the nation’s corn crop is in the ground, up 7 percent from the previous week, and still ahead of the normal pace by 5 percent. Corn emergence stands at 74 percent, up considerably from 56 percent a week ago. Emergence now sits 12 percent ahead of the normal pace for this week of the year.

For beans, 61 percent are planted, up from 45 percent a week ago, and 6 percent ahead of the previous average pace. Beans have made great gains over the last week, as well, with emergence for the crop at 32 percent, up nearly 20 percent from the previous week and 7 percent ahead of normal pace.

Looking specifically at Nebraska numbers, the report showed corn planted at 92 percent as well, compared with 96 percent last year and 96 percent for the five year average. Corn emergence stood at 73 percent, compared to 70 percent last year, and ahead of the 67 percent average.

For Nebraska beans, farmers have 59 percent in the ground, largely behind last year’s 85 percent, as well as the 73 percent five year average pace. Soybean emergence was at 22 percent, also behind last year’s 38 percent and the 31 percent average.

This should come as no surprise, as the state has face cool, wet weather that has prevented planters from entering the fields. According to the latest report:

“For the week ending May 24, 2015, cloudy, wet conditions hampered spring planting activities with an inch or more of rainfall common in the western half of the state. Temperatures were again cool, and averaged six to eight degrees below normal.”

While it’s not a problem to have adequate moisture for emerging crops, too much coupled with long durations of cloudy weather can cause problems. Many producers are reporting yellow corn in the state. A WCMO listener stated, “A lot of acres here [are] looking under the weather in south-central Nebraska. Way too much cloudy, drizzly weather. Starting to see chemical damage in corn from not being able to metabolize the chemicals. A lot of the corn has bad color. Some beans have been in the ground for almost 2 weeks and haven’t emerged yet.”

The weather forecast across the northeast, north central and south central parts of the state predict yet more rain chances in the coming days, coupled with cloudy weather. Farmers will be on the lookout for sun and a chance to get those last few acres in the ground.

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!

Sources consulted: Caldwell, Jeff. “Corn Planting at 92%, Soybeans at 61% as Midwest Weather Sours.” Agriculture.com. Meredith Agrimedia. 26 May 2015. Web. 27 May 2015.  USDA. “Crop Progress Report for the Week Ending 5/24/15.” USDA.com. United States Department of Agriculture. 26 May 2015. Web. 27 May 2015.

2015 Nebraska Farmland ValuesFarmers and agricultural analysts have been forecasting a correction in land values for a time, and according to new data, their predictions have come true, although we may be in for a softer landing than some might have initially anticipated.

Following the general price trends for the record-setting high cattle and lower grain markets, corresponding ag land values have followed suit to their supported commodities. According to preliminary data from the University of Nebraska-Lincoln’s annual Nebraska Farm Real Estate Market Survey, weighted land values for the state declined 3 percent over the last 12 months. This is the first decline indicated in several years of the survey.

Delving into the particulars of the survey, dryland cropland had the strongest rate of decline in the state, at a 10 percent decrease, when compared with center-pivot and gravity irrigated cropland. In contrast, pasture and cow-calf pair rental rates increased about 15 percent across the state due to higher cattle prices and drought assistance provided by the Livestock Forage Disaster Program (LFP).

While cropland was lower, land that supports the cow-calf industry, including tillable and non-tillable grazing land, and hayland, was anywhere from 10-20 percent higher. Hayland, in particular, saw the higher increase in value, with the strongest increases in the Northeast and Central parts of the state.

Irrigated cropland—both gravity and center-pivot—reported a decline of about 3 percent statewide. This lower rate of decline was attributed by survey respondents to generally higher and more consistent yields in comparison to dryland yields. The Central District of Nebraska reported the sharpest decline in the irrigated land class, at approximately 14 percent, with slight decreases reported in the Northeast, East, and Southeast Districts of Nebraska.

Cash rental rates for both irrigated and non-irrigated farmland decreased as well, anywhere from 5-15 percent across the state.

Survey participants were not hopeful that these prices were ready to bounce back any time soon, either, with overall bearish projections based on lower grain and oilseeds prices.

While the trend seems to show overall decreases in land values for the foreseeable future as long as commodity prices remain low, it should be noted that land values don’t always follow the market trends.

Jeff Caldwell of Agriculture.com notes, “The farmland market isn’t exactly following the grain markets lower. In a lot of situations, circumstances like proximity to bidders’ existing acres, CSR (corn suitability rating), and other variables can drive bidding higher, even if it’s completely in the face of fundamental land market trends.”

If you have questions regarding the value of your land asset, please don’t hesitate to meet with us at UFARM. We are here to answer all your land market questions.

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!

Sources Consulted:  Jansen, Jim and Roger Wilson. “2015 Trends in Nebraska Farmland Values and Rental Rates Reflect Changes in Agricultural Commodity Prices.” University of Nebraska-Lincoln Agriculture Economics. University of Nebraska-Lincoln. 04 Mar. 2015. Web. 15 Apr. 2015.  Caldwell, Jeff. “ Farmland Metadata and Precision Ag Influencing Land Prices?” Agriculture.com. Meredith Agrimedia. 14 Apr. 2015. Web. 15 Apr. 2015.

Land Management for Organic Farming in NebraskaDemand continues to grow in the nation for organically produced foods and grains, and many farmers and landowners across the nation are joining the growing organic trend. Nebraska farmers have also been taking notice. The increasing demand for certified organic products and food are opening up new markets, and many Nebraska farmers are stepping in to fill the niche. Have you ever considered the benefits of using your land to produce organic grains or foods? Would organic farming be a good fit for you and your farm?

The term “organic,” when applied to farming, means that foods and grains are produced without using pesticides, non-organic fertilizers, antibiotics, and hormones. Organically grown foods and grains must comply with mandated specifications and regulations set forth by the National Organic Program. Farms must meet specific requirements and be certified by the NOP in order to be considered organic. One of these requirements is that their fields be organic (free from certain synthetic fertilizers and chemicals) for three years before they are able to be certified.

Those applying to be certified must include an application to an accredited agent specifying the four following things:

• The type of operation to be certified
• A history of substances applied to land for the previous 3 years
• The organic products being grown
• The organic system plan describing practices and substances used in production

A drawback at the beginning of the process is that the grain they are producing for the first three years is unable to be sold at the organic prices, even though they are grown using organic practices. Despite the initial hurdles, the payoffs can be substantial; organically produced corn and soybeans can be very profitable for farmers, as they can sell for larger premiums.

Growing organic grains requires different practices than conventional farming, specifically in areas relating to soil composition, weed control, yields, and prices. In particular, weed control for organic farming is perhaps the area which is most divergent from conventional farming, since organic farmers are unable to use conventional methods of weed control, such as spraying herbicides on their crops. Instead, they use other means, such as mowing weeds when they are small, increased cultivation, and adding another crop to the rotation to discourage weed growth, such as rye.

In order for organic farming to be profitable, it is important to make certain that the price premium exceeds the yield loss and higher input costs associated with the practice. While organic farmers traditionally have lower yields, the price of organic grains can be expected to offset those lower yields.

If you’re thinking of moving your farmland into organic farming, it is necessary to be aware of the vast differences in farming practices that accompany the venture as opposed to conventional farming. It is also important to keep in mind the nature of your farmland, and if its soil composition is conducive to growing organically produced grain. Finally, consider the geographical location of your land and decide if it is in decent proximity to markets that seek out organically produced grains and food.

Let UFARM help you decide if organic farming is the right fit for you and your land. They have the expertise to match you with the right operator, and the insider’s knowledge of the specifics that go along with expanding or changing your landowning goals.

Contributing source: Schober, Marc. “Organic Trends Benefit Farmland.” Agweb.com. 15 Dec. 2010. Web. 23 Jan. 2014.