November 28, 2014

FCS of America CEO on Farmland Trends

With crop prices approaching multiyear lows, some folks believe the sprint higher in farmland values may have run its course.  Corn and soybean prices have been volatile and choppy following a tailspin to their lowest levels in five years on expectations for record yields and  hefty global supplies.  While commodity prices have an impact on farmland values, they’re not the only factor.  Many experts agree that whatever happens with interest rates in the near future will also help determine the likely path of farmland values.

We recently caught up with Doug Stark, President and CEO of Farm Credit Services of America, on the sidelines of Trade Talk in Kansas City…

Doug Stark

 

 

 

 

 

Doug Stark

 

Interest rates have been held in check for the past few years by a slumping overall economy.  With the national economy beginning to show signs of recovery, some pundits think a short-term rate hike is likely sometime next year.  Higher interest rates typically mean lower demand for farmland.  Earlier this month, the Federal Reserve Banks in Chicago and Kansas City reported that farmland values declined in those districts in the third quarter from the prior period, continuing a slowdown driven by back-to-back years of large U.S. corn and soybean crops and declining crop prices.

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BNSF Addressing Safety in Casselton

North Dakota Governor Jack Dalrymple said he is pleased with actions taken by BNSF in response to the company’s comprehensive review and analysis of rail operations and infrastructure around Casselton following a November 13 train derailment, the second derailment in the area within the last year.

In a letter to Dalrymple and Casselton Mayor Lee Anderson, BNSF executive Vice President of Operations Gregory Fox listed several actions the company will take immediately to address rail safety in the area.

Following this month’s derailment, Dalrymple spoke with BNSF Railway Chairman and CEO Matt Rose, urging the state’s largest rail carrier to perform an exhaustive inspection of the track system around Casselton. The Governor suggested the company perform a complete analysis of rail track both east and west of Casselton and thoroughly inspect rail, base, ties, crossing areas and other infrastructure.

In the letter to Dalrymple and Anderson, BNSF provided an update on its progress to perform a “deep review and analysis of BNSF rail operations and infrastructure in the vicinity of Casselton.” The company outlined further steps it will take to ensure a safe operation and “provide additional confidence for the community that we are committed to their safety.”

Some of the actions BNSF is taking immediately to address rail safety in the Casselton area include Increasing the frequency for testing rail from five times per year to 12 per year.The railroad will also install equipment detectors on all routes leading into Casselton to flag issues before an incident occurs.

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Beekeepers See Bulk of ELAP Funding

USDA on Monday announced that nearly 2,500 applicants will receive disaster assistance through the Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP) for losses suffered from Oct. 1, 2011, through Sept. 30, 2013. The program, re-authorized by the 2014 Farm Bill, provides disaster relief to producers not covered by other agricultural disaster assistance programs.

Eligible losses may include excessive heat or winds, flooding, blizzards, hail, wildfires, lightning strikes, volcanic eruptions, and diseases, or in the case of honeybees, losses due to colony collapse disorder. Beekeepers, most of whom suffered honeybee colony losses, represent more than half of ELAP recipients.

Agriculture Secretary Tom Vilsack says, “As promised, we’re making sure that thousands of producers who suffered through two and a half difficult years without Farm Bill assistance, are getting some relief.  Once the Farm Bill was restored, not only did we implement the disaster assistance programs in record time, we’re issuing payments less than three months after the enrollment deadline. The funds will hopefully help producers with some of the financial losses they sustained during that time.”

The Farm Bill caps ELAP disaster funding at $20 million per federal fiscal year. To accommodate the number of requests, which exceeded funds available for each of the affected years, payments will be reduced to ensure that all eligible applicants receive a prorated share of assistance.

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