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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.

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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.

Frontier Farm Credit to Distribute $11.5 Million Cash-Back Dividend for 2017

Frontier Farm Credit to Distribute $11.5 Million Cash-Back Dividend for 2017

Cooperative has returned $80.7 million to farmers, ranchers since 2004

OMAHA, NEBRASKA – Frontier Farm Credit, a financial cooperative owned by farmers and ranchers, approved a 2017 cash-back dividend of $11.5 million for its eligible customer-owners.

Frontier Farm Credit has returned more than $80.7 million to producers in eastern Kansas since 2004.

“Cash-back dividends demonstrate the value of our unique cooperative business model,” said Mark Jensen, president and CEO of Frontier Farm Credit. “As agriculture works through a tough economic cycle, our customer-owners are sharing in the cooperative’s success, and can invest the dividends in their operations and local communities.”

The Board of Directors considers a number of business and economic factors in determining the amount of each year’s cash-back dividends, including the cooperative’s financial strength. The earnings retained by Frontier Farm Credit are used to build the cooperative’s financial capacity to continue serving agriculture.

The 2017 dividend checks will be mailed to eligible customer-owners in March 2018. The Board of Directors has approved a cash-back dividend for 2018, with the amount of the distribution to be decided in December 2018.

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 nearly $2 billion in assets and $405.1 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. For more information, visit frontierfarmcredit.com.

Farm Credit Services of America and Frontier Farm Credit Announce President and Chief Executive Officer

OMAHA, NEBRASKA (September 19, 2017) – Farm Credit Services of America (FCSAmerica) and Frontier Farm Credit today named Mark Jensen as incoming president and chief executive officer of the customer-owned financial cooperatives. Jensen, the Associations’ chief risk officer, will assume his new role on November 1, 2017. He succeeds Doug Stark, who is retiring.

Jensen joined FCSAmerica in 1992 and has held senior vice president positions with the Association for the past 16 years. He was named senior vice president – chief risk officer in 2013. Jensen was instrumental in modernizing FCSAmerica’s credit process and implementing an enterprise risk management framework, and today provides executive leadership of the Associations’ risk management, credit and appraisal teams. He graduated from the University of Nebraska-Lincoln with a degree in agricultural economics.

About Farm Credit Services of America and Frontier Farm Credit

FCSAmerica and Frontier Farm Credit are customer-owned financial cooperatives proud to finance the growth of rural America, including the special needs of young and beginning producers. FCSAmerica provides credit and insurance services to farmers, ranchers, agribusiness and rural residents in Iowa, Nebraska, South Dakota and Wyoming. Frontier Farm Credit serves eastern Kansas. Learn more at www.fcsamerica.com and www.frontierfarmcredit.com.

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

Frontier Farm Credit Survey Provides Insight into Farmer Grain Marketing Practices

OMAHA, NEBRASKA (June 1, 2017) – Frontier Farm Credit today announced results of a survey it commissioned in association with Farm Credit Services of America (FCSAmerica) on the marketing practices of farmers across the Corn Belt. The results shed light on the practices used by grain producers who say they are satisfied with their marketing results, and offer an opportunity for farmers to compare themselves to their peers and examine their own approach to marketing.

Nearly 650 producers in nine states answered questions about how and when they price their crops. At a time when many farmers have worked to lower their operating costs, the survey offers insights about how to optimize the income side of the farm balance sheet.

“The survey results highlight that knowing cost of production is the foundation of sound marketing,” said Doug Stark, president and CEO at Frontier Farm Credit. “They also highlight the important role that crop insurance plays in supporting both risk management and marketing, not just when there is a crop failure.”

Among the findings:

  • One-third of producers are mostly or completely satisfied with their marketing practices and results.
  • Satisfied marketers are more likely to price as soon as the market offers a profit and to price multiple crop years. They are less likely to sell most of their crop right after harvest or to price based on market fear or cash flow needs.
  • More satisfied than dissatisfied marketers report that they have a good understanding of their cost of production and use it to set an initial price goal. Satisfied marketers are more likely to have written marketing plans.
  • On average, producers use four to five marketing tools, the most popular being storage. Eighty-two percent store grain at least occasionally; one in five always stores.
  • Operations of 1,000 or more acres and growers with higher levels of crop insurance employ a fuller range of marketing tools. Producers with Revenue Protection of at least 80 percent also are more likely to price prior to harvest.
  • More than two-thirds use cash forward contracts and spot cash sales, while only a quarter of respondents use futures or options.
  • Those 35 and younger are more likely to use hedge-to-arrive contracts and lock in the carry when they store. Younger and larger operators are more likely to use their cost of production to set a marketing price. Ted Schroeder, an agricultural economist and director of the Center for Risk Management Education at Kansas State University, assisted with survey design and interpretation of results.
  • Frontier Farm Credit provides credit and crop insurance services for nearly 7,400 customer-owners in eastern Kansas. “We don’t advise producers on their marketing strategies, but as a farmer-owned cooperative, we continually invest in helping our customers enhance their financial acumen to benefit their operations,” Stark said.
  • USDA reports on grain sales are focused on deliveries to elevators. The FCSAmerica survey focused directly on producers with 350 acres or more of corn, soybeans and/or wheat to learn how they actually price their grain. The results reveal how farmers view risk, the pricing strategies they employ, and the factors that influence their marketing attitudes and practices.

To view the full survey report, visit frontierfarmcredit.com/GrainMarketingInsights.

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 nearly $2 billion in assets and nearly $395 million in members’ equity, Frontier Farm Credit provides credit and crop insurance services to farmers, ranchers, agribusiness and rural residents in eastern Kansas. Learn more at frontierfarmcredit.com.