News Update
January 27, 2015
K-State Survey Indicates Lower Farmland Prices, More Non-performing Loans in the Short-term Outlook
The agricultural lender sentiment for the end of 2014 shows that lenders have decreased expectations for the short- and long-term outlook. Respondents of a Kansas State University (K-State) Agricultural Lender Survey expect farmland prices to decline and non-performing loans to increase.
The five areas surveyed include farm loan interest rates, spread over cost of funds, farm loan volumes, non-performing loans and farmland values. Brady Brewer, agricultural economics doctoral candidate, outlined the major themes and implications for the agricultural sector that were found.
“One of these themes is the continued expectations that farmland values will decrease; growing sentiment that farmland values will decrease in the short- and long-term,” Brewer said. “Additionally, only 2% more respondents indicated that land values in their service territory increased during the last quarter, indicating that values have already stagnated.”
Brewer pointed out that lenders expect interest rates to increase in the short- and long-term. Rising loan interest rates were expected on all loan types considered, operating, intermediate and farm real estate.
“However, more lenders felt these increases would occur in two to five years instead of the coming year,” added Brian Briggeman, associate professor and director of the Arthur Capper Cooperative Center.
Another theme Brewer discovered is that while the long-term expectation for non-performing loans saw little change from the spring 2014 survey to the fall 2014 survey, more lenders expect nonperforming loans to rise in the short term. Potentially, lenders are expecting tighter profit margins to strain loan repayment rates sooner than previously expected. However, it is important to recognize that non-performing loans are currently at a historically low level.
“The financial health of the livestock and crop sectors appears to be headed in different directions,” said Brewer. With lower commodity prices and higher farmland values, lenders expect nonperforming loans to increase in the short- and long-term for crop sectors, while the livestock sectors, bolstered by high market prices and lower feed costs, are expected to see a decrease in nonperforming loans.
For more information, please view the full release here.
AgriLife Extension Classes Tackle how to Profitably get Involved in the Family Ranch
The Texas A&M AgriLife Extension Service has arranged two-day schools this spring for adult children and grandchildren of landowners who want to get involved in the family ranch.
Generation Next: Our Turn to Ranch School will be hosted at three locations in the state beginning in early March, according to Megan Clayton, AgriLife Extension range management specialist, Corpus Christi.
“The schools are for anybody interested in starting an agricultural business,” Clayton said, “but we especially want to provide this opportunity for children and grandchildren of landowners. Staying connected to the family ranch is difficult, especially when there’s not an obvious way to make a profit.”
Many end up needing to find careers outside the property, making it difficult for them to return to the ranch when their parents or grandparents are ready to retire, she said.
“As a result, we’ve seen a decline in the number of agricultural properties staying in the family,” Clayton said. “So this school helps heirs explore profitable enterprises to supplement existing ranching operations. This two-day school is a great place to start for those wanting to get into or stay involved in the ranching business.”
The schools will take place March 5-6 in San Angelo, March 12-13 in Stephenville, and April 9-10 in Corpus Christi.
The registration fee is $100 per school until two weeks prior to the course; $175 thereafter. College students currently enrolled can attend for $75. The fee includes two days of classes from expert instructors, a resource notebook and a jump drive containing resource publications and materials, five meals and a certificate of completion at the end of the course.
Registration will be limited to the first 50 participants, so early signup is encouraged.
Topics to be addressed by expert speakers include:
- • How to start an agricultural business;
- Understanding business taxes;
- Marketing your products and yourself;
- Using technology to your benefit;
- How to set up grazing and wildlife management leases;
- Multi-generational ranching;
- Understanding market fluctuations;
- Land management techniques;
- Coping with invasive species; and
- Alternative operations to add to the business.
For more information, please view the Angus Journal Virtual Library calendar of upcoming events here.
Weed Control Topic of Feb. 5 Range Webinar
Best management practices for weed control will be the topic of a Feb. 5 webinar by the Texas A&M AgriLife Extension Service ecosystem science and management unit.
“To Spray or Not to Spray” is next in the Texas Range Webinar Series, scheduled on the first Thursday of each month from noon to 1 p.m., said Pete Flores, webinar coordinator in Corpus Christi.
“Weeds are a common problem among landowners and can be managed with some best management practices,” said Vanessa Corriher-Olson, Texas A&M AgriLife Extension Service forage specialist in Overton.
“This presentation will include discussion on effective weed control with weed identification, proper timing and herbicide selection,” she said. “Sandbur control with the use of products such as Pastora®, a postemergent, will also be discussed.”
For more information, please view the Angus Journal Virtual Library calendar of upcoming events here.
Ohio State Workshop Addresses Farmland Leasing Issues
As farmers and landowners consider options to include in new or renewed land leases, understanding how to use data in negotiations and how to apply legal information to leasing practices could help make the process easier for both sides, experts say.
To help provide guidance and understanding of the financial and legal issues surrounding farmland leasing, the Ohio State University (OSU) Extension Agricultural and Resource Law program and Production Business Management program will discuss the topic during workshops to be hosted in four sites around the state Feb. 4, Feb. 6, Feb. 11 and Feb. 20, said Peggy Hall, OSU Extension agricultural and resource law field specialist.
The workshop, which will focus on factors affecting leasing options, is intended both for landowners and farm operators, said Hall, who is also an assistant professor for OSU Extension.
A goal of the workshop, Hall said, is to share information with landowners and tenants to help them reduce both their financial and legal risks with farmland leasing.
“When it comes to farmland leases, we tend to think first about the economic side in agriculture and how that dictates how much we pay for land and how much profit we can make,” she said. “But there are also legal issues that come with that relationship. This workshop offers insight into how both sides can reduce legal and financial risks.”
Topics to be covered during the workshop include:
- Factors affecting leasing options and rates;
- Evaluating cash rent survey data;
- Farmland leasing options: Fixed and flexible cash leases;
- Creating a legally enforceable lease;
- Legal provisions in farmland leases; and
- Analyzing good and bad leasing practices.
The workshops last for three hours and are taught by Hall and Barry Ward, production business management leader with the college’s Department of Agricultural, Environmental and Development Economics.
For more information, please view the Angus Journal Virtual Library calendar of upcoming events here.
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