Early harvest in the crosshairs?

Corn

Corn continues to be ahead of schedule, with 91 percent silking and 38 percent in dough stage as of July 29, compared with 82 and 20 percent on average.

The condition is unchanged at 9 percent poor/very poor and 72 percent good/excellent, according to USDA. As the graph below shows, 2018 remains below 2014 and 2016 and if it follows their pattern, the top two categories could go either way from here. In 2014 and 2016, crop condition worsened a bit through August, while 2015 actually saw a modest improvement before sliding lower. In 2017, on the other hand, crop condition dropped and then recovered five points by harvesttime.

Soybeans

Beans in the 18 reporting states are still well ahead of normal in both blooming and setting pods, at 86 percent and 60 percent, respectively, compared with averages of 77 percent and 41 percent. All the states in our service area also are ahead of average.

Condition, right at 70 percent good/excellent in the 18 states, is a few points behind 2014 and 2016. But soybeans tend not to show large variations in condition from this point forward; based on the past four years, it is more likely to trend sideward. with small weekly adjustments, or even improve slightly.

Grain sorghum

Although the top categories of condition saw a three-point bump up this week to 52 percent, sorghum is faring poorly compared with other crops. Seventy-eight percent of Nebraska’s crop is rated good/excellent, with only 1 percent poor/very poor. South Dakota follows with 78 and 1 percent; and Kansas, 63 percent and 5 percent.

Sorghum is closer to average in progress: 4 percentage points more than  average are headed while coloring is one point behind average.

 

 

Wheat

Winter wheat harvest is over in Kansas, 89 percent complete in Nebraska and 79 percent complete in South Dakota (where, on average, it is only 57 percent complete by this time). The average for the 18 reporting states is 85 percent, one point short of average.

Spring wheat harvest already is 35 percent finished in South Dakota, against an average of 21 percent. In the six reporting states, it has reached its average level of 4 percent. Condition is rated at 78 percent good/excellent, down one point from a week ago but still well above 2014 to 2016. South Dakota’s crop is the worst listed, at 52 percent good/excellent and 10 percent poor/very poor.

 

Pasture

A look at USDA’s graph of grass condition shows continued long-term deterioration. Just 41 percent is measured as good/excellent while 29 percent falls into the bottom two categories. Kansas pasture/range is worse than the average for the 48 states, at 29 percent in the top categories and 35 in the bottom. South Dakota is rated 54 percent good/excellent and just 10 percent poor/very poor, while Nebraska continues to beat the averages by a wide margin, 71 percent good/excellent and just 8 percent poor/very poor.



Looking ahead

The Climate Prediction Center’s outlook for the remainder of the growing season is for above average temperatures. Precipitation favors below normal from the Texas Gulf through eastern Kansas and Missouri, while the remainder of the Corn Belt has equal chances for above or below normal rainfall.


house with ckecklist

How Much House Can You Really Afford?

From house hunting to financing, first-time homebuyers often have many questions about navigating the road to homeownership. It’s an undertaking that can seem even more overwhelming when moving to a farm, acreage or rural community.

Consumer lending officers with Frontier Farm Credit shares five tips on how to successfully finance a country home that fits both your lifestyle and budget.

Start the conversation early. Before falling in love with a property, our officers advise homebuyers to evaluate their financial situation and explore their mortgage options.

The first mistake homebuyers often make is not meeting with a lender prior to going out and shopping for their home, they said. Involving a lender early in the homebuying process allows them to determine what property price range their income qualifies them for.

Gather up-to-date financial records. To complete a loan application, Frontier Farm Credit requires the past two years’ tax returns, a most recent pay stub and an updated balance sheet. Our officers said it’s important for homebuyers to account for all assets and liabilities when preparing their balance sheet.

Listing liabilities is the easy part, but many applicants tend to overlook their assets, such as a car or checking account. Understanding the basics of how to fill out a loan application can reveal how debt-to-income ratios impact a homebuyer’s ability to borrow.

Avoid overextending finances. Our officers caution homebuyers against borrowing the maximum amount possible.

We don’t want to set up our borrowers to fail. We want to set them up to buy their dream home and still be successful — making their loan payments and having the flexibility to take on an unexpected car payment, for example, or being able to go out for pizza on Friday night.

As a general rule, we recommend the 28/36 standard, meaning a household should spend a maximum of 28 percent of its gross monthly income on total housing expenses and no more than 36 percent on total debt.

Consider the size of the property. Some lenders are hesitant to offer financing for farms and acreages they define as nonconforming properties. Frontier Farm Credit, however, can finance any sized lot.

Large properties over 40 acres sometimes require a higher down payment and shorter loan term. We treat a property under that threshold as a traditional home loan product. There is a lot of flexibility under the Frontier Farm Credit umbrella.

Seek out the right lender. Lenders stand out from the competition by the areas they specialize in. For example, do you need a lender that is attuned to the needs of self-employed borrowers?

We understand the unique financial situations of the self-employed market, including farmers, and have the expertise to use trends and averages to get approvals.

Click here for more information about rural home and acreage mortgages.

Crop development continues ahead of average; condition slips

The 2018 corn crop is rocketing toward completion.

Silking

Dough stage

Poor/very poor

Good/excellent

7/22

Average

7/22

Average

7/22

7/22

18 states

81

62

18

8

9

72

Iowa

88

61

7

5

6

72

Kansas

83

71

34

14

21

50

Nebraska

82

68

22

7

3

87

South Dakota

762

47

10

2

6

71

 

corn progress july 15 2018However, the following graph shows a notable decline in corn condition, which is now below 2014 and 2016.

 

Soybeans

soybeans progress july 15 2018Soybean condition has held up better and remains well above last year, though it also has dipped below 2014 and 2016.

Seventy-eight percent of the crop in the 18 states is blooming and 44 percent are setting pods, both well ahead of average (63 percent and 23 percent, respectively).


 

Blooming

Pod setting

Poor/very poor

Good/excellent

7/22

Average

7/22

Average

7/22

7/22

18 states

78

63

44

23

8

70

Iowa

81

66

40

24

6

86

Kansas

74

47

30

11

18

46

Nebraska

78

71

40

23

3

85

South Dakota

68

66

38

26

8

65

 

Grain Sorghum

Sorghum ranges from 21 percent to 42 percent heading in the states we are reporting here, again ahead of average. Its condition began the season at 50 percent, improved for a few weeks, then tumbled to 49 percent this week.

Heading 7/22

Heading average

Poor/very poor

Good/excellent

11 States

42

40

16

49

Kansas

21

11

6

63

Nebraska

36

19

1

84

South Dakota

32

30

1

77

 

Wheat

Winter wheat in the 18 reported states is 80 percent complete, one point ahead of average. Kansas harvest is wrapped up, Nebraska stands at 82 percent and South Dakota at 47 percent, well ahead of its 38 percent average.

Ninety-six percent of the spring wheat is headed, three points ahead of average. South Dakota’s crop is right on its 99 percent average. Condition in the reporting states is at 4 percent in the lowest two categories and 49 percent in the top two. South Dakota’s crop is rated 14 percent poor/very poor and 49 percent good/excellent.

Pasture/range

A slight worsening is reported in the 48 states — now 26 percent poor/very poor and 45 percent good/excellent, compared with 25 and 47 percent respectively a week ago.

State Poor/very poor Good/excellent
Iowa 15 58
Kansas 34 28
Nebraska 8 73
South Dakota 10 63
Farmland photo

Farmland Values Hold Steady

Farmland values appear to have adjusted to a new normal. Even with seasonal fluctuations, farmland values have remained generally consistent since 2015.

“Farmland values are largely dependent on geography and have adjusted to reflect their market’s current supply and demand,” said Tim Koch, chief credit officer for Frontier Farm Credit, which tracks the values of 71 benchmark farms in association with Farm Credit Services of America (FCSAmerica).

Farmland values in FCSAmerica’s four states of Iowa, Nebraska, South Dakota and Wyoming peaked in the last half of 2013. Long-term data for eastern Kansas is not available because the alliance between Frontier Farm Credit and FCSAmerica dates only to 2015.

Nearly five years later, Iowa has seen the largest drop in values at 17.8 percent, followed by Nebraska at 17.6 percent. South Dakota’s farmland is off 10.8 percent since it peaked in the fourth quarter of 2013. (The five-year mark in the chart below reflects changes in farmland values since the first half of 2013, prior to the market peak. The number of benchmark farms in each state is noted in parentheses.)

STATE Six Month One Year Five Year 10 Year
Kansas (7) 2.1% 2.1% N/A N/A
Iowa (21) 2.1 3.5 -16.3 71.4
Nebraska (18) 0.1 -2.8 -12.0 109.3
South Dakota (23) -1.4 -2.6 4.2 98.6
Wyoming (2) 2.5 3.2 38.5 30.1

In the first half of 2018, four of the seven benchmark farms in eastern Kansas increased in value, two declined and one showed no change.

Frontier Farm Credit and FCSAmerica appraise benchmark farms twice a year, in January and July. In addition, the cooperatives compile records from farmland sale. The cooperatives’ objective in using the benchmark farms is to track real estate values without the influence of changes in land quality on sale prices. Below are quarter-by-quarter changes in sale prices for eastern Kansas:Kansas Cropland Values

Double the Usual Corn Silking

USDA reports that as of July 8, 37 percent of the corn crop was silking, more than double the average of 18 percent. And the crop is entering its critical period in better shape than last year, with 75 percent rated good/excellent and only 7 percent poor/very poor, compared with 65 percent and 10 percent last year.

The 18-state rating was within one point of the prior week, shown on the chart below.

corn progress July 2018

A look at the states in our area shows:

Silking July 8 Silking average Good/excellent Poor/very poor
Iowa

35

9

78

6

Kansas

48

34

52

16

Nebraska

31

13

86

3

South Dakota

10

5

74

6

 

Soybeans

Soybean progress also is well ahead of average, with 47 percent blooming and 11 percent setting pods in the 18 reported states, compared with 27 percent and 4 percent on average. Soybean condition also is quite good thus far – comparable to 2014 and 2016.

soybeans progress July 2018

Blooming July 8 Blooming average Pod setting Pod setting average Good/
excellent
Poor/
very poor
Iowa

46

25

7

2

76

6

Kansas

38

15

5

1

51

11

Nebraska

50

34

1

2

83

4

South Dakota

30

31

1

2

68

8

 

Grain Sorghum

The 11-state sorghum crop is running closer to average, with 25 percent heading, two percentage points behind average. However, the Kansas crop is at 6 percent, compared with 3 percent and Nebraska has reached 13 percent, far ahead of its usual 2 percent. South Dakota is slightly behind its 8 percent average, at 5 percent.

The 11 states are rated 51 percent good/excellent, down from 53 percent last week while the bottom range is unchanged at 15 percent. All of the states where we do business are well above average, led by Nebraska’s 81 percent good/excellent, followed by South Dakota’s 80 percent and Kansas at 60 percent.

Wheat

Winter wheat harvest is 63 percent complete, 2 points ahead of average, in the 18 reported states. Kansas, at 92 percent is 7 points ahead of average; Nebraska is at 25 percent, 2 points short of average and South Dakota is at 2 percent, 5 behind average.

With 81 percent of the spring wheat headed (well ahead of the 69 percent average) in the six states, 80 percent is rated good/excellent. South Dakota’s crop falls short of that, at only 51 percent and 14 percent poor/very poor.

Pasture and Range

Pasture and range condition in the 48 states is unchanged from a week earlier at 51 percent good/excellent and lagging last year’s 54 percent. Southwestern states show the largest percentage in the poor/very poor categories. In our service area, Kansas’ ratings are the lowest with 33 percent in the top two categories and 29 percent in the bottom two.

The persistent drought is relatively stable, covering between 40% to 50% of the country for 16 weeks, according to the latest U.S. Drought Monitor. That trend appears likely to hold moving forward, with NOAA’s outlook for July/August/September calling for seasonally warm weather and not many regional precipitation anomalies predicted for the three-month period.