A recent news update from University of Missouri Extension indicated that, “Renters and property owners are negotiating new farmland leases in response to lower farm commodity prices, says University of Missouri Extension agriculture business specialist Joe Koenen.

“Communication helps landlords and tenants find a middle ground for new leases, Koenen says. Landlords in tune with lower farm prices recognize that tenants will request rent adjustments. ‘I know of renters who are negotiating leases. Several are being successful,’ he says. ‘Overall, so far it seems relatively smooth.'”

The Missouri Extension item noted that, “Some owners, however, resist the change. Landowners who invested in land with expectations of a set return seem most reluctant to renegotiate new terms, Koenen says.

“Open communication between landlord and tenant throughout the term of the lease—not just when down markets hit—is key.

“‘Communicate every year, not just when prices go down,’ Koenen says. Talk to landlords about income and expenses and how that affects your bottom line.”

The update added that, “Tenants who are good stewards of rental property should remind landowners of this. Loyalty and tradition still matter in rural areas, Koenen says.”

Associated Press writer Roxana Hegeman reported yesterday that, “U.S. farmers drained all available government agricultural loan money this past fiscal year to get through one of the worst agricultural downturns in recent years, but no one who qualifies for a farm loan will be denied in the next four months due to an unusual provision passed this month by Congress.

“The budget patch gives the Agriculture Department’s Farm Service Agency authority to meet the spike in loan demand by using future funding, according to U.S. Sen. Jerry Moran, a Kansas Republican who chairs an agricultural appropriations panel. There is no limit to how much the USDA can lend through April 28 — a victory for farm groups who pressed Washington for the fix to avert a looming loan crisis.

“Already, corn and wheat prices have pushed farmers to the limit, and beef prices are hurting ranchers. They turned to lenders, leading the FSA to fall short $137 million short of needed direct and guaranteed loan funds in the fiscal year ending Sept. 30.”

Ms. Hegeman indicated that, “Operating loans for 2016 are coming due at a time of widespread downturn. Farmers in Georgia, the Carolinas and Alabama have gotten a double whammy of drought and flooding. Midwest states are reeling from a glut in global grain markets that has slashed crop prices, and cotton growers in Georgia and Texas also are suffering due to low prices. Consumer demand for milk is down. Cattle prices are falling.

“Not as many people are able to pay off their 2016 operating loans, and the next 60 to 90 days will be telling, said Steve Apodaca, vice president for the Washington, D.C.-based The American Bankers Association’s Center for Agricultural and Rural Banking.

“Most borrowers will be able to sustain themselves another year, and bankers will be able to help restructure their loans and add federal guarantees to commercial loans, Apodaca said. He is not expecting a repeat of the farm crisis of the 1980s, when land values tanked and interest rates were high.”

Yesterday’s AP article added that, “This year’s bountiful yields and low interest rates on loans helped many growers. But many commercial lenders are now demanding farmers whose operations are under stress to get government guarantees that any money lent for next year’s crops will be repaid.

“‘When a farmer goes under, it affects that rural community,’ Apodaca said. ‘He is no longer buying seed, he is no longer buying equipment. His family is no longer going to the local Main Street and buying goods and services.'”

DTN writer Todd Neeley reported yesterday that, “The U.S. Supreme Court on Jan. 6 may decide whether it will hear a legal challenge to USDA’s wetlands determination system filed by a South Dakota farmer last fall.

“Miner County, South Dakota, farmer Arlen Foster petitioned the high court to consider whether a USDA procedure to determine wetlands on his 0.8 acre of land in the Prairie Pothole region is ‘arbitrary and capricious.’

“Last week, Foster’s petition was distributed for review by the court at its Jan. 6 conference. Every year, the court holds multiple conferences to look at filed petitions. Typically, the court doesn’t discuss every petition during those conferences. Those cases not discussed are considered to be denied.”

Mr. Neeley noted that, “Foster, who is represented by the Pacific Legal Foundation, told DTN in September that winter dumps piles of snow nearly every year along a tree belt near a 0.8-acre tract of land on his farm in the southeastern part of the state. Spring melt drains onto his field, often making it impossible to farm.

“As a result, the 0.8 acre tract was declared a wetland based on a USDA process Foster asked the court to review. That process uses so-called reference sites when a tract of land being reviewed has been farmed, making it difficult to determine the presence of wetlands.

“This month, USDA and attorneys for Foster filed briefs with the court on whether it should hear the case.”

The DTN article explained that, “In the brief filed with the Supreme Court, USDA said it followed procedure in selecting the reference site when examining Foster’s land…[T]he Natural Resources Conservation Service, or NRCS, has faced a backlog of requests for wetlands determinations. As a result, many landowners have been left waiting for years.

“In Foster’s situation, he said NRCS instead used a comparison site to make a determination. This deprives him of his rights, he contends in his appeal. Such comparisons are allowed by NRCS procedures.”

More background on the case can be found here.

Meghan Grebner reported yesterday at Brownfield Online that, “The Chairman of the House Agriculture committee says he is confident that the House and Senate Ag Committees will be able to get a Farm Bill passed before the current bill expires.”

Rep. Mike Conaway (R, Tex.) was quoted in the Brownfield update as saying, “Certainly no – no need for the normal drama that you have of extensions and expirations and all the things you go with that. There’s no reason to do that. So, I’m hopeful that (Senate Ag Chairman) Pat Roberts and I can get this on President Trump’s desk in time – you know, before the current (farm) bill expires.”

Yesterday’s update added that, “The debate on the 2018 Farm Bill is likely to take a different tone from the 2014 Farm Bill since this Farm Bill will be written in a down farm economy.”

A “down” farm economy makes a timely conclusion to the 2018 Farm Bill all the more important for Illinois farmers.