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  • Land prices continue their reluctant decline in much of the Midwest. While anecdotal and isolated reports of farmland sales remind us that prices are variable by situation and location, the consensus among private lenders and Federal Reserve Banks is continued softening for ag real estate.

    “Over the past 12 months, farm prices have fallen by 11 percent, cattle prices are off by 22 percent, and grain prices are down by 20 percent.  Weak agricultural commodity prices are pushing farm income lower and sinking the overall Rural Mainstreet economy,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

    Goss reported that in his August 2016 survey, bankers estimated, on average, farmland prices would fall by another 6.9 percent over the next 12 months. However, as in previous months, there is a great deal of variation across the region in the direction and magnitude of farmland prices, with prices growing in some portions of the region.

    Bank CEOs reported an average annual cash rent per acre of $252 with almost one-fourth of bankers detailing annual cash rents exceeding $299. Goss surveys bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

    In late summer, University of Missouri economist Ron Plain released an annual opinion survey for Missouri land prices. Respondents were mostly lenders and rural appraisers. Some of the variability in value direction for land was evident in the responses.

    “Respondents reported the value of good cropland was up in 10 of the 20 areas of the state, but the statewide average of $4,677 per acre was down $59 or 1.3 percent below last year,” Plain reported. The survey showed pasture land sliding 3 percent on average with timberland holding steady. Recreational real estate was up $24 per acre on average.

    Respondents in the University of Missouri survey commented that low cattle and crop prices had pressured land prices lower, but consistently low-interest rates have slowed the decline. When asked what they expected for the coming 12 months, respondents in the survey predicted cropland values to fall another 3.3 percent and pasture land values to slide by 2.3 percent.

    The eastern portion of MFA’s trade territory is included in the Federal Reserve Bank of St. Louis, which performs an agricultural survey each quarter. Its second-quarter survey showed cash rents for ranch and pastureland sliding by 20.7 percent compared to last year, but just 2.2 percent from the first quarter of 2016. Respondents in that survey said second-quarter values for good cropland values remained relatively steady compared to a year-over-year decline of 6.4 percent. Still, the majority of respondents look for continued downward pressure on land prices over the next three months.

    At the Kansas City Federal Reserve, assistant vice president Nathan Kauffman said that second quarter survey results were similar in the western side of MFA’s territory.

    “Weakening farm income and deteriorating credit conditions continued to pressure farmland values lower. Values of nonirrigated and irrigated cropland declined 3 percent and 5 percent, respectively, from a year ago. Ranchland values also declined 3 percent, continuing the downward trend of recent quarters,” reported Kauffman.

    The KC Fed survey showed that similar to other regions, there is variability on land values depending on agricultural uses and geographically specific economic factors.

    “Declines in cropland values were most significant in Kansas and Oklahoma, likely due to sustained weakness in profit margins associated with wheat and cattle production and potential spillover effects from difficulties in the energy sector. The declines in Kansas cropland values were, in fact, the largest year-over-year declines in any state [of the Fed’s 10th District] during the downturn of the past two years. Cropland values in Nebraska fell for an eighth consecutive quarter, and the 5 percent decrease in irrigated cropland values for the District was the largest decrease in 29 years,” reported Kauffman.

    The KC Fed survey collected similar sentiment from respondents about land prices in the near term. More than 30 percent of banker respondents expect the values of all types of farmland to decline in the next quarter while less than 2 percent expect an increase. And most of them agreed that the overall level of farm wealth is the driving factor.

    One thing to watch according to Kauffman: “Bankers also expect farm income to have a more significant effect this year in the adjustment of farmland values than in previous years, suggesting that reductions in cash flow may continue to weigh on farmland values.”  

  • Amendment #1 will appear on the November ballot here in Missouri, and voting for this important measure will help protect your farm from erosion and help fund Missouri Parks. Voting yes on Amendment #1 should feel as good for Missouri farmers as a hot shower after a day working outside during a Missouri summer. Think about it. By the time you get to Amendment #1 on the ballot, you’ll have listened to and watched months of negative advertising, seen a debate or two, worried about the economy and low farm prices and even, if you’re like me, wished that we picked some of our candidates by lottery instead of the way we do it. Heck, by the time you get to the bottom of the ballot and the end of the season, you’ll be ready for a shower to wash the grime of the long campaign season off. Then, you get a chance to vote to save Missouri soils and improve Missouri parks.

    We get the opportunity to do this every 10 years, and voting yes means we’ll leave the polling place knowing that at least one vote we cast will make things better. That’s something that only happens once a decade, and it is a very good feeling.

    When the measure was introduced in the early 1980s, Missouri led the nation in per-acre soil erosion. We’ve made more progress than any state and have cut erosion rates in half. We’ve saved hundreds of millions of tons of soil, protected Missouri lakes and streams, and improved the productivity of our farms. That’s a government program with measurable results, which is as rare as a summer with perfect weather.

    The program works because we vote on it every 10 years, which means that we have to show results or voters will show their disapproval. The program works because it is primarily administered at the local level, where the people responsible for spending the money know what’s happening with the money they spend. (Half of the funds generated by the program, a one-tenth-of-a-cent sales tax, go to the state parks system and half go to soil and water conservation programs.) The program works because farmers are responsible for cost share funds, meaning we have skin in the game. Farmers, like everyone else, spend their own money more carefully than they spend other people’s money. Finally, the program works because it is simple, with easily understood and measurable goals. Our park and soils program can and should serve as an example for public programs in every state.

    As I’ve listed the reasons why the program works and talked about why I think you should vote yes, it occurs to me that I haven’t completely explained the reason why I’ll vote yes, which is much more personal, wrapped up in my memories of my grandfather. Charles T. Hurst was careful with a dollar. Once, in the 1980s, when we were removing a fence to repair a diversion terrace, I asked him how old the wire was. He admitted he didn’t know. You see, the wire was already used when he installed it in 1935. You may ask why we were saving the wire: Well-used wire is perfect for water gaps that might have to be replaced.

    But Grandpa would spend money on saving soil. I can remember driving out to his tractor to take him home, well after dark, while he was building terraces on the first farm I rented. He was in his 80s, and my grandmother was saving supper and ready for him to come in. His pride as a farmer was to make the land better. I can do no less, and like most farmers in Missouri, have been able to do much more to improve my farm because of our parks and soils program.

    As farmers, we’re under more scrutiny to be good stewards of the soil and water. For the first time ever, we’re being asked to meet conservation goals in order to qualify for crop insurance. Missouri farmers have a huge advantage in meeting those regulations because Missouri voters are our partner in soil conservation. As citizens, as farmers, as stewards of the land, we can continue this valuable partnership by voting yes on Amendment #1 on Nov. 8.

  • After an extended run of impressive financial performances, retailers are adjusting to a tougher economic environment accompanying the down-phase of the current ag commodity cycle, according to a new report from CoBank.

    “The drop in farm income over the past three years is the steepest decrease since the Depression,” says Tanner Ehmke, CoBank senior economist covering, the grains, oilseeds and ethanol, and farm supply sectors. “Producer incomes have fallen more than 50 percent from 2013 to today and their debt-to-income ratio is on the rise. Not surprisingly, total accounts receivable for ag retailers posted an 11 percent gain for 2015, and that’s expected to grow in the year ahead due to ongoing farmer cash flow challenges.”

    Meanwhile, seed and crop protection companies are experiencing a new wave of consolidation, creating ambiguity and insecurity about product offerings, prices and competition in the industry.

    Furthermore, many ag retailers face rising operating expenses—including payrolls and benefits—and higher depreciation costs following years of infrastructure investment. While these upgrades were necessary, they now contribute to a drag on profits.

    “On a positive note, it appears the drop in net farm income is slowing,” noted Ehmke. USDA projections for 2016 call for a 2 percent reduction in net farm income year-over-year, compared to 2015 when net farm income dropped 38 percent year-over-year and 2014 when it dropped 27 percent.

    “When we do get through this cycle, those businesses that have been able to adapt stand to benefit from a significant payout on the other side,” Ehmke said.

  • A new disease, bacterial leaf streak, has made its way into corn crops throughout the heartland.

    The U.S. Department of Agriculture-Animal and Plant Health Inspection Service confirmed the presence of the new disease on Aug. 26, 2016. According to its announcement, the bacteria that causes bacterial leaf streak disease is Xanthomonas vasicola pv. vasculorum. APHIS does not consider it to be of quarantine significance and will treat it as other bacterial diseases of corn such as Goss’s bacterial blight, said K-State plant pathologist Doug Jardine.

    The disease is thought to have occurred on corn in South Africa, but it has been most notably associated with gumming disease of sugarcane. It is unclear how it made its way to the United States or how long it has been here. It was first observed in samples submitted to the University of Nebraska Plant and Pest Diagnostic Clinic in 2014, but a lack of historical information and the appropriate diagnostic methods delayed its identification until APHIS positively identified the bacteria from a sample collected in Nebraska in August 2016.

    Bacterial leaf streak disease has now been identified in nine states including Nebraska, Kansas, Colorado, Iowa, Illinois, Minnesota, South Dakota, Texas and Oklahoma, Jardine said. Missouri has returned no positive tests for the disease.

    Infected corn leaves exhibit narrow tan to brown streaks that range from less than an inch to several inches long.

    “To the untrained eye, the disease can look very similar to the common fungal foliar disease, gray leaf spot,” Jardine said. “One diagnostic key is that bacterial leaf streak has narrow, wavy-edged lesions compared to gray leaf spot, which has very sharp, straight-edged lesions that follow the veins in the leaf. Sometimes the lesions occur close to the midrib; in other cases, they occur across the leaf blade.”

    It is not currently known how the disease has spread to so many states, Jardine said, but a current hypothesis is that it is seed-transmitted. Movement within a field or from field to field may be by the bacteria blowing in the wind created by thunderstorms. Unlike Goss’s blight, it does not appear that it needs a wound to aid it in getting into the plant. Disease management options are currently limited. Since it is a bacterial disease, fungicides are not effective.

  • Driving in straight rows used to be a sign of skill on the farm. When the corn came up, it was a point of pride to have the straightest rows in the neighborhood. In the past two decades, that skill has become less important. Nowadays it’s more important to know how to download the latest software driver for the GPS gear to make the guidance system work. And that’s a skill set that looks to remain important in the coming years, because in the not-too-distant future, farmers might not climb onto their tractors to plant. The robot future is closer than you think.

    At the 2016 Farm Progress Show, CNH Industrial announced its latest concept tractors, the Concept Case IH Magnum and New Holland T8 NHDrive Autonomous. The former needs no onboard fleshy pilot to do its work. The latter gives its human interface the nod by providing a cab so that farmers won’t feel completely useless and might be needed to handle less routine jobs such as road transport.

    In either format, the company claims the machines can be seamlessly integrated into existing fleets. Aside from the driverless technology, they use a conventional engine, transmission, chassis and implement couplings. According to CNH Industrial, the process of operating either tractor begins with inputting field boundary maps into the system, and then using the integrated path planning software to plot the most efficient field paths for machines. Autonomous technology is most suited to jobs that make this possible, and which require minimal complex operator intervention, such as cultivation, planting, spraying and mowing. This system automatically accounts for implement widths and plots the most efficient paths when working with multiple machines, including those operating with different implement widths and with varying operating requirements. Manual path plotting can also be carried out for refueling or when custom paths are required.

    Once path plotting has finished, the user can choose a job from a pre-programmed menu by selecting the vehicle, choosing the field and then setting the tractor out on its task.

    Subsequently, the machine and implement can be monitored and controlled either via a desktop computer or via a portable tablet interface, which can both display three operating screens.

    Both designs use LiDAR (range finding lasers) and video cameras to ensure obstacles or obstructions in the tractor’s path or that of the implement are detected and avoided. CNH Industrial has worked with Autonomous Solutions Incorporated, a Utah-based company to develop and refine this concept autonomous technology.

    According to CNH Industrial’s crystal ball, the skills farmers will need in the future will be less about straight rows and more about the cash flow management needed to buy the best robot.

  • Editor’s note: Fox won the FFA speaking contest at the 2016 Missouri Institute of Cooperatives. Here we print the speech she delivered for the contest, and as winner, to the institute’s member banquet. Fox is the daughter of Phillip and Kristie Fox. She is currently a senior member of the Trenton, Mo., FFA chapter. Her advisors are Kabel Oaks and Brook Kreatz. Fox intends to purse a degree in agriculture.

    “BEEP, BEEP, BEEP!” It’s six am and your alarm tells you it is time for you to start your day. You’re tired, but there is a lot to be done before you have to take off for the morning. You may start by turning on a light, going to the bathroom, brushing your teeth, washing your face and getting dressed to have breakfast. For me, before I eat my breakfast I have to go and feed my animals. Either way, you might end up in the kitchen for your first steaming cup of coffee and your breakfast. After this, you head out to begin your day. Many of these activities you just performed are supported by one common thing, an American cooperative. Whether for electricity, feed for livestock, or even having running water in your house, all of these different tasks could not be possible without American cooperatives, and if all of these various cooperatives weren’t working together, we couldn’t live as comfortably as we do.

    Cooperatives began as a simple idea. It originally was defined as people working together for a common purpose. Today we all have cooperatives in our communities, but at one time, many did not. My grandpa, who was born in 1929, is a good example of that. My grandpa didn’t receive rural electricity at his home until he was six years old. Considering that he lived on a small Iowa farm, 10 miles out of town, how were any of those cooperatives supposed to get to him? Well, that’s the beauty of cooperatives. They are here to build a better world through their technology and different forms of ingenuity.

    Cooperatives are not only our basic utilities; it’s also our fuel sources, feed and other agricultural products. Cooperatives such as the Trenton People’s Co-op gas station or MFA Agri Services provide these resources to everyone. Those few sectors make up one huge group in Missouri. This group is called the Missouri Institute of Cooperatives, commonly referred to as MIC. This institute brings cooperatives from all over Missouri together to achieve their goal of informing everyone on the impact cooperatives have on our community and state.

    Cooperatives have seven guiding principles they abide by to be successful. These seven principles are what build a strong cooperative enterprise in a rural town and all around the world.

    The first of the seven principles is voluntary and open membership. This means that anyone can join a cooperative. Anyone within the surrounding area has an opportunity to receive the service of a cooperative, such as electricity or water.

    The next principle is democratic member control. Every member of that single cooperative has a chance to make decisions. Cooperatives give their members a chance to vote on policies that will affect all members.

    The third principle is members’ economic participation. Members of that cooperative have democratic control and can receive an allocation. For instance, when Grundy Electric has surplus profits for that year, they offer their members a capital credit allocation for being a member of their cooperative.

    The fourth principle is autonomy and independence. A cooperative is independent and controlled by its members. Members of a cooperative can be elected to their board and can be selected by other members. This gives equal representation to all members so that each person within their cooperative may help to make decisions. Cooperatives pride themselves in allowing members to make decisions.

    The fifth principle is education, training and information. Cooperatives are here to contribute to our everyday lives. They perform this act through the training of members, informing their users and keeping the youth involved.

    The sixth principle is cooperation among cooperatives. This means that cooperatives from all over Missouri and the United States work together to serve their members effectively and efficiently. On May 22, 2011, a massive tornado left Joplin, Mo., in ruins and without many utilities. They needed an extra hand to get the job done. This is where my friend and fellow FFA member Karli’s father came to help. He spent over two weeks in Joplin assisting the local cooperatives to help them restore electricity.

    The seventh and final principle of cooperatives is the concern for community. While cooperatives are formed to serve their member’s needs, they are also there to serve the community’s needs. Members can set policies for the community to help in its development.

    Out of the seven principles, the seventh is the most critical for each of our communities.

    I thought to myself, does the People’s Co-op gas station have a concern for my school? Does Grundy Electric set money aside for my town’s parks and recreation areas? I knew that to get a better understanding of the impact cooperatives have in my town, I had to track down a representative of my local cooperative to speak with.

    Cathy McKay, the head office manager at Grundy Electric, spoke about the benefits of cooperatives. She said, “A cooperative is the coming together to form a group for one common purpose,” and that “cooperatives don’t have to be for water or power or even gasoline, they simply provide a sense of community.” As she described the seven principles of a cooperative, I wanted to know more about the aspect of community development. I asked her if Grundy Electric has a concern for our parks and recreation centers in Trenton. She responded with, “At Grundy Electric they set funding aside for different projects and programs in our community.” She mentioned that “Grundy Electric cares about city parks and employee involvement in the community. They provide lights to keep parks lit at night, and they have employees of Grundy Electric serve on school boards or hold office in the city council.” She went on the record stating that, “We want to serve our community and volunteer for our members.” No matter if you are from a small community of 195 people or a large community of 195,000, cooperatives serve every person in many ways.

    My hometown is Laredo, and we are a small community of 195 people. Even as small as we are, we still possess a cooperative. Although it only stands 4 feet tall, it serves a large purpose. That’s the MFA gas pump. This old pump is one of the last standing pumps that are only operated by a key, but as simple as that seems, MFA still provides us with the fuel that we need. Not only is MFA providing us with fuel, but with growing opportunities as well. From sponsoring softball shirts for the community softball teams to giving scholarships to seniors, MFA is lending a hand. They influence future opportunities for all of their members.

    Cooperatives have impacted my family and my community in countless ways. I went from not knowing what MIC even stood for to realizing that the cooperatives in my community help make each of my mornings better. They may serve a town like Laredo or a place as large as Kansas City. Wherever they are, they are making an impact for us now and in the future. So next time that you hear the beep, beep, beep of your alarm, be sure to appreciate your local cooperatives. If we didn’t have them, we would be like my grandpa, who always said, “Running water is one of the greatest inventions ever!"


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