Illinois farmland values decrease again

Illinois farmland values decrease again

February 16 – The Midwest has seen a third consecutive year of decreasing farmland values.

 

The Federal Reserve Bank of Chicago stated in its quarterly newsletter that a zone that includes parts of Illinois, Michigan, Indiana and Iowa saw another decrease in land value for 2016, making this three years in a row.

 

Land values in central Illinois have dropped by 5 percent in the last year, according to a survey of almost 200 district banks.

 

University of Illinois Agricultural Economics professor Todd Kuethe said this goes hand in hand with leased land rates.

 

“Potentially, we’ll see land rental rates following land values down if they haven’t already led them down a little bit,” he said.

 

The decreased land value also results in less collateral to get operating loans.

 

“We can start to see some secondary effects, potentially, in credit market because of the reduced asset values,” Kuethe said. “I tell farmers to make sure you have all of your statements in order so you can show your lender exactly where your strengths and your weaknesses are and how you plan to finance any debt.”

 

Kuethe warns farmers that 2017 is not a time to panic, but definitely one to approach cautiously.

 

“We’re going to again see low margins next year,” he said. “Maybe even decreasing margins from what we saw the year before.”

 

Land values in Southern Illinois weren’t part of the survey as they belong to a different federal reserve district.

 

Kuethe said that the lower-quality recreational soils there also saw decreases in value, but are prone to more swings as land values there isn’t tied to a set yield standard as are high-quality soils in central Illinois.

 

Source: IRN News

Legislation seeks to boost Illinois’ bio-based economy

Legislation seeks to boost Illinois’ bio-based economy

February 10 – State Senators Chapin Rose and Andy Manar are sponsoring legislation that would grow Illinois’ bio-based economy by offering incentives to companies to produce and sell renewable products.

 

Senate Bill 1656 would provide tax credits to businesses that invest in new renewable products made from biomass and other renewable sources.  Universities and private companies are research and development to bring these products to the marketplace.  Rose says Illinois’ strong agricultural base makes us perfect for this industry.

 

“This legislation is all about the jobs that will be created in this potential $20 billion new industry,” Rose says.  “Central Illinois is perfectly suited to be the center of this new industry with the production and shipping capacity in Decatur on one side, the Integrated Bioprocessing Research Lab (IBRL) in Urbana on the other side, and the best corn and beans in the world in between.  The potential for jobs is here – we have something no one else has to offer.”

 

The legislation follows Rose’s leadership in securing a $26 million research investment in the University of Illinois’ IBRL to work with the biotechnology sector.  Manar, too, believes Illinois can be a leading state in this sector.

 

“Illinois is strategically positioned to lead in the development of these new renewable products,” he explains.  “We have leading biotechnology companies, large and small, that are leading research and development efforts on these innovative products and we have critical mass in infrastructure to produce and transport these renewables around the world.”

 

Industrial Biotechnology is enabling the production of a new generation of renewable chemicals, biobased materials, and bioplastics.  These materials can serve as a replacement or supplement to traditional fossil fuel-based chemicals and products.

 

Iowa and Minnesota have already established similar incentives and legislation is pending in Congress to establish a similar credit at the federal level.

ADM Reports 4th Quarter Earnings

ADM Reports 4th Quarter Earnings

February 7 – Archer Daniels Midland Company today reported Fourth Quarter financial results for 2016.

 

“We capitalized on an improved environment, delivering stronger fourth quarter performance after working through difficult market conditions earlier in the year,” said ADM Chairman and CEO Juan Luciano. “Ag Services saw strong results in North America and weak results from the global trade desk. The Corn business delivered a good quarter, led by sweeteners and starches, and saw solid results from bioproducts. Oilseeds results were comparable to last year despite lower global crush margins. In WFSI, WILD Flavors continued to deliver earnings growth, while some of our specialty ingredients businesses faced challenges, which we are addressing.

 

Luciano also says “We have continued to take important steps to advance our strategic plan by completing additional acquisitions, organic growth projects and portfolio management actions; exceeding our 2016 target for run-rate cost savings; and progressing in our efforts to reduce capital intensity. In line with our balanced capital allocation framework, we returned $1.7 billion to shareholders in dividends and share buybacks during the year.

 

“With expected improvements across all of our businesses throughout the year and additional contributions from recent projects and new facilities as they ramp up, we are optimistic about improving results throughout 2017.”

 

ADM reported adjusted earnings per share at $0.75 for 4Q 2016, up from $0.65 per share in 4Q 2015.  Total net earnings for the 4Q were $424 million, a sharp drop from $718 million in 2015.

 

During 2016, the company returned $1.7 billion to shareholders through dividends and share repurchases.

 

Source: Business Wire

ADM to sell Crop Risk Services business

ADM to sell Crop Risk Services business

January 30 – Archer Daniels Midland Company (NYSE: ADM) announced today that it has reached an agreement to sell its Crop Risk Services (CRS) business to Validus Holdings, Ltd. (Validus) (NYSE: VR) for $127.5 million, subject to certain working capital and balance sheet adjustments.

 

The deal includes a marketing services agreement under which ADM and Validus will work together to continue to offer a full range of insurance and farmer marketing products and services to CRS customers.

 

“We regularly evaluate our portfolio to ensure that our businesses and assets best fit our strategy to maximize long-term returns,” said Joe Taets, president of ADM’s Agricultural Services business unit. “As a result of that ongoing process, we have identified a better strategic fit for the Crop Risk Services business. In the years since we purchased ADM CRS, that team has built it out to become a significant market participant. Equally as important, ADM CRS has become a platform through which our Grain business is able to offer our farmer partners a wide array of services that benefit both them and ADM.

 

“Now, we’re pleased to have reached an agreement that benefits ADM on two fronts: it includes a marketing services agreement that will allow ADM and Validus to work together to continue to offer customers a full array of crop insurance products as well as ADM’s grain marketing services, while the sale of the business gives us the opportunity to redeploy capital as part of our balanced capital-allocation framework. We are pleased to have found a buyer in Validus that is committed to running—and growing—the business, and we look forward to continuing to work with Validus and the CRS sales team and their customers across the country. This is a good solution for ADM, our shareholders, the CRS team, and the farmers who are the foundation of our business.”

 

Validus—a leading global provider of insurance, reinsurance and investment services, with over 800 employees and offices in all major regions worldwide—has committed to keeping the CRS business intact, including maintaining its operations in Decatur.

 

The move will affect some employees in Decatur, ADM Spokesperson Jackie Anderson said.

 

“Nearly all ADM CRS employees will transfer with the CRS business at closing. It is important to emphasize that Validus is buying the CRS business to run it, and in fact to grow it,” Anderson said.  “They plan to keep the CRS operations in Decatur and have also committed to no layoffs as a result of the transaction. In addition, the ADM and Validus teams will work together to continue to offer customers a full array of crop insurance products as well as ADM’s grain marketing services.

 

“Validus—with their vast expertise and experience in the reinsurance and insurance industries—is a great partner to bring the CRS business to the next level, and we look forward to working with them to collectively bring more value to producers than we could bring individually.”

 

Ed Noonan, Validus’ chairman and chief executive officer, stated, “I’m very pleased to welcome CRS to Validus. CRS is a high quality crop insurance provider that has achieved excellent growth in recent years. Validus will benefit from CRS’s commitment to provide superior customer service to agents and farmers via their leading technology capabilities. The addition of CRS complements Validus’ existing agriculture book and participation in this market is a logical step as Validus continues to expand our presence in U.S. primary specialty lines. We are excited by the long-term partnership with ADM as this transaction further provides the unique opportunity of a marketing services agreement with one of the largest agricultural processors in the world.”

 

The sale, which is subject to regulatory review, is expected to close in the first half of 2017. ADM expects to record a book gain upon closing.

 

Source: Business Wire

Illinois Farm Bureau hopeful for Trump’s USDA nominee

Illinois Farm Bureau hopeful for Trump’s USDA nominee

January 20 – Illinois’ agriculture community is hopeful President Donald Trump’s pick to lead the U.S. Department of Agriculture will help cut back regulations and lower taxes for farmers.

 

Illinois Farm Bureau President Rich Guebert said he and others in the agriculture community were a little worried. They thought the announcement was going to happen last week.

 

“I think all of agriculture was wondering if we were ever going to get a secretary appointed,” he said. “It was kind of down to the wire.”

 

News trickled out late Wednesday that former Georgia Gov. Sonny Perdue would be Trump’s pick for USDA.

 

Guebert said he is confident Perdue will help work on issues important to farmers like dealing overly burdensome regulations “and bring some common sense back to regulations, whether it has to do with the Clean Water Act or anything else that regulates Illinois agriculture — from water to air.”

 

Guebert said farmers want clean water and air so they can pass quality land to the next generation. They also want Perdue to work with lawmakers to repeal the estate tax.

 

“A death tax, you might say, is to pay taxes on that land again,” he said. “We pay taxes throughout our lifetime, property taxes on that land, and we just feel it’s a double taxation.”

 

Earlier this week, Rep. Peter Roskam, R-Wheaton, told the Illinois News Network he’s been appointed to the subcommittee that will begin the process of repealing the federal estate, gift and generation-skipping transfer taxes.

 

Perdue will have to be approved by the U.S. Senate.

 

Source: IRN

Macon County Farm Forum is this Friday

Macon County Farm Forum is this Friday

December 6 – The University of Illinois Extension has been helping farmers for over 100 years and now they need your help deciding what is needed in the next 100 years.

 

Macon County Extension, in conjunction with the Macon County Farm Bureau, is hosting a farm forum titled “Help Extension Help You” this Friday, December 9.  U of I Extension has helped farmers by offering programs and classes about new techniques and agricultural innovations for years.  Central Illinois farmers are encouraged to attend the forum and share ideas about what kinds of programs farmers will need to succeed the next 100 years.

 

Extension officials say no topic is too small or too big.  This is your chance to ask for a course in global market fluctuations, government mandates, bio-based fuels, or anything else.

 

The forum will be held from 7-8 a.m. Friday at the Macon County Extension Office, located at 3351 N. President Howard Brown Blvd. in Decatur.  Another forum will be held at the DeWitt County Extension Office in Clinton on December 8, and one will be at the Piatt County Farm Bureau in Monticello on January 5.

 

The deadline to register for the Macon County forum is December 7.  You can register by clicking here, or by calling (217) 877-6042.

Dixon educates Millikin on Ag trends and issues

Dixon educates Millikin on Ag trends and issues

November 16 – With a growing world population and a shortage of land for agricultural production, ADM Director of Economic Research Parry Dixon is encouraging Millikin students to be a part of the solution.

 

Dixon was Tuesday night’s featured speaker for Millikin’s Science for Entrepreneurship Series.  Dixon titled his presentation the “Macroeconomic Trends in Agriculture.”  Dixon was tasked with speaking about the next 25 years of agriculture, something he says will be dictated by growing populations and their diets.

 

“We are at 7.4 billion people today and expect to be above 9 million in 25 years,” Dixon says.  “The question arises ‘how do we feed ourselves?’  It’s really important to look at population, where does it grow, and what kind of food they are going to be eating.”

 

With population trending upward, meat consumption has risen with it.  That has created a challenge, Dixon says, because there are strains on land use that can produce enough feed for livestock.  Millikin President Dr. Patrick White summed up the importance of agriculture.

 

“This isn’t about creating a new emoji or a new app, it’s about feeding the world that’s continually growing,” White explains.  “Decatur’s expertise in food processing is going to be needed.”

 

Soy consumption has gone up in Asia and Dixon believes the U.S. will soon ship more meats around the world.  That creates a challenge for producers to find more efficient ways to grow products.

 

Dixon challenged students and the crowd to take on opportunities and broaden their minds.  He believes there is a big opportunity in Africa and India, which are the two largest-growing populations.

 

“Africa is the major challenge moving forward and it’s a major opportunity,” Dixon told the crowd.  “I really think Africa will be the real test of humanity in the next 25 years.”

Ag Café highlights future of drone usage

Ag Café highlights future of drone usage

October 27 – Drone and UAV technology is rapidly improving and Ag Technologist Chad Colby is encouraging Macon County farmers and agribusinesses to get on board.

 

Colby was the featured speaker at today’s Greater Decatur Chamber of Commerce Ag Café at the Beach House.  He’s the founder of Colby AgTech , the General Manager of Central Illinois Ag, and a farmer.  Colby has dove into the Ag technology scene and now he travels the Midwest sharing what he’s learned.

 

“When you talk about drones it just opens up a whole hornet’s nest of questions,” Colby says.  “For the last four or five years, I’ve been flying drones all over the country and talking about it.  Today was about sharing what I’ve learned.”

 

Colby is a licensed UAV pilot and tries to get his hands on all the new drone technology.  Drone tech continues to improve.  During his presentation Thursday, Colby went over different types of drones and attachments.  New cameras coming out allow for thermal imaging and up to 180-times zoom capability.

 

Drones have become popular in the Ag world for crop risk assessment and many more applications.  Colby says drones can really improve your crop by finding where problems are.

 

“As farmers we are trying to track performance; we want find a problem and see if it is an issue that a farmer can fix or not,” he says.  “There’s so much [drones can do] from the basics of scouting to advanced imagery and all of it is coming so fast.  It’s exciting for farmers because of all the challenges agriculture always faces.”

 

Colby says drones allow you to pinpoint where a problem is and the accuracy will continue to rise in the future.

 

Drone use goes beyond agricultural applications.  Colby says they are used for insurance, search and rescue, roof and bridge inspections, etc.

 

“There’s just all kinds of uses for the technology but it’s expanding and will continue to do so for several years.”

Senator Kirk calls for repeal of “death tax”

Senator Kirk calls for repeal of “death tax”

October 13 – U.S. Senator Mark Kirk is joining Macon County farmers in asking for a repeal of the “death tax.”

 

The death tax, also known as estate or inheritance tax, is a tax on the transfer of the estate of a deceased person.  If a person were to die in 2016 and their estate is worth more than $5.45 million, the inheritor would be taxed 40 percent federally.  Illinois joins 14 other states in imposing a statewide tax, which is at 16 percent.  Joining farmers at the Macon County Farm Bureau Thursday, Kirk says he’ll fight the tax.

 

“When you add Hillary’s [Clinton] death tax to the current Illinois death tax, it means on the death of someone who owns a substantial amount of property, the government gets 81 percent,” Kirk says.  “That’s way too much for America’s family farmers.  I want to make sure farmers keep their farms and I want to get that federal tax down to zero percent.”

 

Kirk says Hillary is proposing a 25 percent increase on the federal tax, which would burden Illinois farmers and land owners even more.

 

With 98 percent of America’s farms owned by individuals, partnerships, and family corporations, the Macon County Farm Bureau and farmers around the state are calling for a repeal of the death tax.

 

“If land has been in someone’s family for, say, one hundred years, it’s highly unfair that the government could take that much tax money from them and force them to sell land to pay the tax,” Farm Bureau Board President Mike Stacey says.  “That’s just not right.”

 

Stacey says this tax forces many family farms to have to sell equipment or land to pay the tax and it’s hard for them to gain that land back once sold.

 

Kirk says there is bipartisan support to reduce or repeal the death tax.  He also feels Democrats aren’t in a strong position to fight for the tax.

 

“I want to make sure the cut that the government gets is not 81 percent.”

ADM establishes science grant for Macon County teachers

ADM establishes science grant for Macon County teachers

October 11 – Archer Daniels Midland Company is helping to boost STEM education in Macon County by establishing the ADM Next Generation Science Standards (NGSS) grant.

 

The NGS Standards are being fully implemented this year in Illinois schools.  However, many Macon County teachers are finding that funding for special studies has been scarce.  Macon County middle and high school teachers who have gone through an iBIO Institute session will now be eligible to apply for the NGSS grant.  ADM Vice President of Process & Chemical Research Paul Bloom says the teachers were excited to bring what they learned to their students, but found it difficult to implement programs without funding.

 

“We’ve had great feedback from all the teachers who have gone through the iBIO program,” Bloom says.  “After that, it was basically what do we do next to keep this going.  That’s where this extra funding should help by giving teachers some extra resources.”

 

So far, about 66 teachers have taken advantage of the professional development course.  ADM even paid for the substitute teachers so the teachers could attend the sessions.  ADM is teaming up with the Education Coalition of Macon County to help get the word out that grants are available.

 

“Teachers get this great training often, but they don’t always get to see it all the way through,” EdCo Executive Director Dani Craft says.  “The freedom that this [grant] offers to our local teachers, especially in a science classroom – the sky’s the limit for them.  We can’t wait to see the impact on the students when their eyes light up at the different things they get to do in the classroom.”

 

Teachers can apply for up to $750 for purchase of school supplies to support NGSS lesson implementation.  Supplies that may be purchased include: consumables, science lab kits, software programs, or science equipment.  The money must be used for NGSS programs in the 2016/17 school year.

 

Science, Technology, Engineering and Mathematics (STEM) programming has become a big focus in recent years throughout the U.S.  With the world needing to double food production in the next 40 years, Bloom says we need to invest in the next generation of scientists.

 

“We need to help the next generation of problem solvers hit the ground running,” he says.  “NGSS is important because it takes it from a lecture-style of learning to a much more hands-on learning style.  When you get to a real environment, you have to innovate and develop real solutions.”

 

If you know a teacher who qualifies for this grant, you should have them call the Education Coalition at (217) 429-3000.