Posts

More wet ahead

DTN’s senior ag meteorologist, Bryce Anderson, last week shared his latest expectations for the 2019 growing season. To jump to the bottom line, he sees the cool, wet weather lingering into the end of May through the entire central U.S.

Not only is it keeping farmers from the field but disrupting transit of grain exports and fertilizer movement north to farmers, many of whom already anticipated a crunch due to field work that didn’t get done last fall. The Mississippi River broke its 1993 record and is cresting a second time.

“Flooding will continue to be a problem through the entire season – especially in the Western Corn Belt- he said. “Some fields were too damaged to plant this year, for instance.” Comparing this year with analog years 2013 and 2015, Anderson expects prevented plantings to total in the 2-3 million area, well above the 1.5 million average. Virtually all spring crops could be affected.

The Climate Prediction Center’s map shows northeast Kansas is expected to receive almost 4” (100 mm) of more rain than normal between May 9 and May 16 , suggesting continued delays are possible.

predicted soil moisture anomaly may 2019

“However, once the crops are in the ground, growing conditions promise to be quite favorable,” he added. There is a weak El Niño (1o to 2.5o C above normal) in the Pacific Ocean, and it likely will remain in place through the growing season and possibly through the year. El Niño is associated with fewer than normal threats to U.S. summer crops, Anderson explained. On the downside, it could mean another wetter than usual harvest period, though “probably not as bad as last year.”

For more information, contact Bryce Anderson with DTN.

Again, the Climate Prediction Center’s outlook maps for the end of June (shown) and even August project 1.6”-2.4” (40 to 60 mm) more soil moisture than usual.

lagged averaged soil moisture outlook for end of June 2019

Kansas progress

In the week ended May 6, there we three days when some fieldwork could take place, according to USDA. Corn in the 18 reporting states was only 23% planted, compared with a five-year average of 46%, and 6% of so9ybeans were in the ground compared with 14% on average. Kansas corn planting was ahead of some states, but at 41% was behind its 51% average; soybeans came closer to average with 5% planted, one percentage point behind normal.

The eastern part of the state was well ahead of the total: northeast, 56%; east central, 55% and southeast, 56%.

On the plus side, winter wheat yields appear to be strong, based on crop tours ahead of harvest. The Kansas Wheat Quality Council pegged yields at 47.2 bu./acre, well above the five-year average crop tour estimate of 40.2 bu., and last year’s 38 bu.

But crop watchers worry that the crop is running late and prolonged excess moisture could cause problems before harvest is able to commence.

Late Plantings

A conservative estimate for national late corn planting this year is at least 5-10 percent above the long range (1980-2018) average of nearly 17%, according to University of Illinois ag economists Scott Irwin and Todd Hubbs.

They note that years with especially high late planting (2013, 2002, 2009, 1996, 1993, and 1995, in that order),

Impact on yield

Irwin reported five of the six years (19934, 1995, 1996, 2002, 2013) with 30% of the corn crop left to plant after May 20 resulted in about a 6 bu./acre drop in the national average yield versus trend. (2009 saw an above-trend yield.) Based on those analog years, their analysis suggests national yields well below the 175.4 bu. trend yield: 169.3 bu. based on all the years between 1980 and 2018 with 10 percent or more planted late, and to just 168 bu./acre based on years with very late planting (1995, 1996 and 2009).

Click for more analysis on how many acres may be involved and potential impacts on the crop.

Caveat: Fast planting

A recent Farm Journal Pulse poll released May 2 asked farmers how long it takes to plant their crops in perfect conditions. Forty-two percent said they can do it in less than 10 days. Mark Licht, an agronomist at Iowa State University, calculates corn planting peaks between 1 and 1.25 million acres a day (just over 13 days to plant this year’s Prospective Plantings) and about 14 days to plant all the soybeans.

But weather forecasts, including Anderson’s, don’t show that many good field days in the next few weeks. In addition, Anderson added that many fields are slow to dry out even when it isn’t raining, given the saturation and lack of sunshine.

Answers to questions

If you anticipate planting problems, contact your Frontier Farm Credit crop insurance officer for guidance on prevented planting, replanting, late planting, cover crops and related issues.

Crop Update: Markets are in Big Crop Mode

On the heels of last week’s annual Pro Farmer Crop Tour and stable to better condition ratings, the December corn futures contract has fallen below $3.50/bu. November soybeans also are well below the levels they attained early in the growing season, but at $9.39, are actually a bit above the $9.21 seen on August 16.

Pro Farmer’s tour stressed the more-than-usual variability in crop condition and yield estimates from field to field and even within fields. But in the end, a national corn yield of 167.1 bu./acre is estimated. That’s 1.5 percent below USDA’s August estimate of 169.5 bu. and down 4.3 percent from last year’s yield of 174.6 bu.

State crop tour results:

  2017 Crop Tour USDA August Difference (percent)
Iowa 183 188.0 -3
Nebraska 180.5 183.0 -1.4
South Dakota 138 140.0 1.4
Minnesota 184 183.0 0
Illinois 181 188.0 -3.7
Indiana 171 173.0 -1
Ohio 163 171.0 -4.7

 

These estimates are made with corn maturity still a little behind average: Eighty-six percent is in the dough stage, compared with an 87 percent average; 44 percent denting, compared with 51 percent average and 6 percent mature versus 10 percent average.

USDA’s Crop Progress report on Monday left the 18-state ratings unchanged, with 62 percent good/excellent and 12 percent poor/very poor. The Kansas crop worsened by 2 points at both the bottom and top ends, now totaling 16 percent and 55 percent, respectively, with 15 percent of the crop mature and 58 percent dented.

Soybeans

Pro Farmer put the national soybean yield at 48.5 bu./acre, 2.8 percent below USDA’s August estimate of 49.4 and down 7.1 percent from 52.2 in 2016.

  2017 Crop Tour USDA August Difference (percent)
Iowa 53.5 56 -4.5
Nebraska 56.5 58 -2.6
South Dakota 40.5 41 -1.2
Minnesota 48.5 49 -1
Illinois 55.5 58 -4.3
Indiana 54.5 55 -1
Ohio 53 53 0

 

With 93 percent of soybeans setting pods and 6 percent dropping leaves – each 1 percentage point ahead of average – USDA reported a slight improvement in the condition of the 18-state crop. The low end lost one point and the top end of the range gained one point, putting 11 percent poor/very poor and 61 percent good/excellent.

Soybean condition in Kansas is 11 percent poor/very poor and 53 percent good/excellent, down one and two points, respectively.

Grain Sorghum

Eighty-eight percent of the sorghum crop in Kansas is headed, right on average. This compares with 98 percent of the Nebraska crop, and 91 percent of the 11 reported states. Kansas is eight points behind average at 26 percent for coloring but ahead one point for maturity at 3 percent.

Condition has slipped: Last week, 62 percent was good/excellent and this week 60 percent; the low end of the scale worsened by one point to 8 percent.

The ratings for the 11 states dropped from 66 percent to 65 percent good/excellent but held steady at 7 percent in the bottom end of the range.

Wheat

Three-quarters of the spring wheat crop has been harvested, according to USDA. Its last rating – on August 20 – was 42 percent poor/very poor and 34 percent good/excellent. With weather uncertainty all but over, hard red spring wheat futures have faded from their high above $8 in July to well below $7 now.

At the same time, post-harvest hard red winter prices have collapsed. After exceeding $6 in July, the December contract has been trading in the $4.20 to $4.30 range for about a week.

U.S. wheat faces tough world competition. For instance, USDA’s Foreign Agricultural Service reported on August 22 that “evidence points toward another record Russian wheat harvest.” The Russian harvest is forecast to come in at 77.5 million metric tons, surpassing last year’s record by 5 million, with yields taking out last year’s record by 8 percent. Last week, the ag minister predicted that Russia could both hit a new record and regain its position as top wheat exporter.

Pasture

Overall, pasture condition and moisture levels are good, with 66 percent rated good/excellent and 11 percent poor/very poor. Topsoil moisture in Kansas is 69 percent adequate to surplus, while subsoil moisture is 69 percent in those categories.

Weather

Overall, long-range outlooks from the Climate Prediction Center offer little hope of notable improvement in the South Dakota crops. However, most of the Corn Belt has much greater than normal chances for below-average temperatures through September 11.

Precipitation appears likely to be dry into the Ohio River Valley, then neutral chances of higher or lower than normal rain as far as the Smokey and Appalachian mountains.

Three-month outlooks reflect warmer than usual temperatures for September to November and neutral precipitation outlook, except for the South, where odds favor rain and harvest of what promises to be bumper crops could run into delays.

All News

Frontier Farm Credit Reports Slight Softening of Farmland Values in Last Half of 2018

Farm real estate market remains stable overall

Farmland values in eastern Kansas softened slightly in the last half of 2018, but remained stable overall.

While benchmark farmland values in eastern Kansas improved throughout 2018, the gain was modest in the last six months of the year. Cropland in 2018 saw a 0.6 percent increase in value; pasture gained 5.8 percent in value.

In the neighboring state of Nebraska, farmland values as a whole declined 1.0 percent in the last half of 2018 and 0.9 for the year. Iowa, which generally is on the leading edge of changes in the real estate market, declined 1.4 percent in the last six months of 2018, but were largely unchanged for the year.

“The softening of the market in the latter half of 2018 wasn’t unexpected and, in fact, it better aligns farmland values to profitability in the grain sector,” said Tim Koch, chief credit officer for Frontier Farm Credit. “The industry continues to be challenged by compressed margins. For producers who rent farmland, softening in the market will help their bottom line.”

Continued pressure on profit margins could lead to additional softening in 2019. However, the same factors that have helped to stabilize the market for the past three years remain in place, including interest rates near historic lows and strong demand for quality land that is in tighter supply.

The chart below reflects changes in farmland values for the benchmark farms that Frontier Farm Credit tracks in eastern Kansas. The number of benchmark farms is noted in parentheses.

STATE Six Month One Year
Kansas (7) 0.7% 2.8%

Frontier Farm Credit appraises its benchmark farms twice a year, in January and July. In addition, the cooperative compiles records from farmland sales. The cooperative’s objective in using the benchmark farms is to track real estate values without the influence of changes in land quality on sale prices.

About Frontier Farm Credit

Frontier Farm Credit is a customer-owned financial cooperative proud to finance the growth of rural America, including the special needs of young and beginning producers. With $2.1 billion in assets and $461.4 million in members’ equity, Frontier Farm Credit is one of the leading providers of credit and insurance services to farmers, ranchers, agribusiness and rural residents in eastern Kansas. Learn more at www.frontierfarmcredit.com.

Frontier Farm Credit to Distribute 2018 Cash-Back Dividend of 90 basis points for total payout of approximately $15.5 Million

Cooperative has returned nearly $96.1 million to farmers, ranchers since 2004

OMAHA, NEBRASKA – At a time when agricultural producers face economic challenges, Frontier Farm Credit has approved its largest cash-back dividend to date. The financial cooperative’s eligible customer-owners will receive a 2018 cash-back dividend equal to 0.90 percent of a customer’s eligible daily loan balance for an estimated total payout of approximately $15.5 million.

Since 2004, Frontier Farm Credit has returned nearly $96.1 million to farmers, ranchers and agribusinesses in eastern Kansas.

“As a mission-driven cooperative, one of our key goals is to maintain the financial strength to serve agriculture and rural America through all economic cycles. We strive to be a dependable lender through every ag cycle, but especially through the tough ones,” said Mark Jensen, president and CEO of Frontier Farm Credit. “There is no better time than today to put our financial strength to work for our customer-owners.”

Earlier this year, the Board of Directors for Frontier Farm Credit announced that it was enhancing its patronage program to share more of the cooperative’s earnings with eligible customer-owners. It intends to target a cash-back dividend of 90 basis points for the foreseeable future, barring unforeseen events and significant changes in the environment. The earnings retained by Frontier Farm Credit are used to build the cooperative’s financial capacity to continue serving agriculture.

The 2018 dividend checks will be mailed to eligible customer-owners in March 2019. The Board of Directors has approved a cash-back dividend program for 2019, with the amount of the distribution to be decided in December 2019.

About Frontier Farm Credit

Frontier Farm Credit is a customer-owned financial cooperative proud to finance the growth of rural America, including the special needs of young and beginning producers. With $2.1 billion in assets and $461.4 million in members’ equity, Frontier Farm Credit is one of the leading providers of credit and insurance services to farmers, ranchers, agribusiness and rural residents in eastern Kansas. Learn more at www.frontierfarmcredit.com.

Frontier Farm Credit Announces Enhanced Patronage Program

The financial cooperative has returned $80.7 million to customer-owners since 2004

OMAHA, NEBRASKA – Frontier Farm Credit today announced enhancements to its patronage program to share more of the cooperative’s earnings with eligible customer-owners.

At its August meeting, the Frontier Farm Credit Board of Directors approved targeting a cash-back dividend equal to 0.90 percent of a customer’s eligible average daily loan balance, the highest payout since the patronage program’s inception in 2004. The enhancement will be effective for the 2018 fiscal year, and eligible customers should see the higher cash dividend payout in their March 2019 patronage distributions.

Jennifer Gehrt, Frontier Farm Credit board chair, said, “We assess the cooperative’s financial strength each year to ensure adequate capital levels. Once those are met, the board typically approves payment of a portion of net income back to our stockholders. Barring an unforeseen event or significant change in the environment, the outlook for our cooperative positions us to provide more certainty around our patronage intentions going forward. We think it is important that our customer-owners know they can count on their cooperative in these challenging times for agriculture.”

Frontier Farm Credit has returned $80.7 million since 2004 to its customer-owners in eastern Kansas. “It’s one of the most tangible benefits of our cooperative business model,” Gehrt said. “Those dividends flow to rural communities all across our service area.”

Craig Kinnison, chief financial officer at Frontier Farm Credit, said, “We’ve spent years building the association’s financial strength and operating efficiencies. Our capital base has never been stronger, and the ability to stress test our loan portfolio under a variety of scenarios gives us confidence to target a higher level of patronage for our current planning cycle.”

The Frontier Farm Credit board annually approves a capital plan for the association based on projected asset levels, earnings, economic conditions, possible loan losses and other contingencies. The board’s patronage payout assumes the association meets its financial goals and other factors do not adversely impact the cooperative.

About Frontier Farm Credit

Frontier Farm Credit is proud to finance the growth of rural America, including the special needs of young and beginning producers. With $2.0 billion in assets and $440.7 million in members’ equity, Frontier Farm Credit is one of the region’s leading providers of credit and insurance services to farmers, ranchers, agribusiness and rural residents in eastern Kansas. Learn more at www.frontierfarmcredit.com.

Frontier Farm Credit elects one to the Board of Directors

Frontier Farm Credit Customer-Owners elect one to the Board of Directors

OMAHA, NEBRASKA (March 23, 2018) – Bill Miller, of Council Grove, Kansas, has been re-elected to the Board of Directors of Frontier Farm Credit, a financial cooperative serving eastern Kansas.

Miller and his wife, Debbie, run commercial Angus and Charolais cattle on their ranch. Miller also does communication work for U.S. Premium Beef, LLC.

Frontier Farm Credit stockholders elected Miller a four-year term, April 1, 2018, to March 31, 2022. He has been a Frontier Farm Credit director since 2008.

Frontier Farm Credit is a financial cooperative with a board that reflects the diverse agricultural backgrounds and interests of its customer-owners. The board is comprised of six elected customer-owners and one appointed director.

For full Frontier Farm Credit election results, visit frontierfarmcredit.com.

About Frontier Farm Credit

Frontier Farm Credit is a customer-owned financial cooperative proud to finance the growth of rural America, including the special needs of young and beginning producers. With more than $2 billion in assets and $420.1 million in members’ equity, Frontier Farm Credit provides credit and insurance services to farmers, ranchers, agribusiness and rural residents in eastern Kansas. Learn more at www.frontierfarmcredit.com.

For media and communications inquiries, please contact Judith Nygren, Corporate Communications & Public Relations Specialist, at 402.348.3346.

Farmland Values Stabilize in 2017 in Grain Belt States

Frontier Farm Credit says risk remains for downward pressure in real estate market

OMAHA, NEBRASKA – (January 18, 2018) – Farmland values stabilized in 2017, a reflection of continued market demand for quality land in states served by Frontier Farm Credit and Farm Credit Services of America (FCSAmerica).

Sales of higher quality farm ground contributed to an uptick in average sale prices in 2017. Where prices dropped at local or regional levels, sales generally involved lower quality land. Average sale prices rose slightly in eastern Kansas, Iowa, Nebraska and South Dakota. Wyoming had too few sales to identify a trend.

FCSAmerica, in association with Frontier Farm Credit, compiles sales records and, twice a year, appraises 71 benchmark farms. The cooperatives’ objective is to track real estate values without the influence of changes in land quality on sale prices. Iowa and Wyoming saw modest overall increases in real estate values in 2017, while eastern Kansas, Nebraska and South Dakota declined.

Below is the average state-by-state change in benchmark farm values through 2017. The number of benchmark farms in each state is indicated by parentheses.

State Six Month One Year Five Year Ten Year
Iowa (21) 1.4% 1.8% -12.8% 82.1%
Kansas (7) -0.1% -3.2%
Nebraska (18) -​2.8% -2.8%​ -5.1%​ 130.2%​
South Dakota (23) -1.3% -3.1% 15.6% 123.3%
Wyoming (2) 2.5% 3.2% 38.5% 30.1%

“Overall real estate values have stabilized in the past year, but continued low profit margins and potential for an increase in sales activity could put downward pressure on real estate values,” said Tim Koch, chief credit officer for Frontier Farm Credit and FCSAmerica.

Farmland values remain well below the market’s peak of three to four years ago. Overall, values are off about 20 percent.

EASTERN KANSAS

One benchmark farm increased in value, four declined and two were unchanged. The 3.2 percent decline in overall value for 2017 was due largely to the sole irrigated cropland represented among the benchmark farms. The value on the irrigated ground dropped 21 percent. Frontier Farm Credit has been tracking farm values since January 2015, when it began operating in alliance with FCSAmerica.

Public land auctions declined 31 percent compared to 2016 and total sales were down 46 percent.

IOWA

Eleven benchmark farms saw an increase in value in the last six months of 2017, while 10 showed no change.

Overall farmland sales activity was down 20 percent. However, public land auctions increased 2 percent compared to the previous year. The percent of auction “no sales” fell to 2.7 percent, down from 3.2 percent in 2016.

NEBRASKA

Five benchmarks farms increased in value, while two showed no change. The remaining 11 declined an average of 6.1 percent.

Total sales declined in 2017, with dry cropland dropping 15 percent and irrigated 25 percent compared to 2016. Public land auctions dropped 16 percent and auction “no sales” increased to 5.2 percent, up from 2.2 percent in 2016.

SOUTH DAKOTA

Values were unchanged on 14 benchmark farms in second half of 2017. Three farms saw an increase and six declined.

Total sales were down 18 percent compared to 2016. Public land auctions were down 16 percent and “no sales” increased to 6.1 percent, up from 3.2 percent.

WYOMING

The one cropland benchmark farm increased in value by 5.1 percent. The pasture unit saw no change in value in the last six months of 2017.

Sales have been and continue to be very limited in Wyoming.