DTN Ag Policy Editor Chris Clayton reported yesterday that, “The National Farmers Union is calling on Congress to pass disaster aid and consider starting work early on a new farm bill as they and other ag leaders seek to draw more attention to the state of the farm economy.

“Roger Johnson, president of the National Farmers Union, said in a phone interview on Wednesday that NFU and the leaders of Farm Aid want some emergency disaster aid to help producers weather the current downturn.”

Mr. Clayton explained that, “NFU brought in 275 farmers from around the country for their fall fly-in. Johnson said some of them were a little taken aback on Monday when they met with Agriculture Secretary Tom Vilsack. The secretary said he understood that some farmers are having a difficult time.”

The DTN article noted that, “Vilsack also reminded NFU members that farm income levels over the past five years have been some of the best in recent history. ‘They needed to understand when they talk about tough times, there are a whole lot of people out there who are not doing as well as many farm families are doing,’ Vilsack said.

“The secretary said he told NFU members to consider where they stand relative to the average American family, Vilsack said. The average American farm family has a median income of about $76,282, according to USDA, which is $19,782 higher than average U.S. household.”

Recall that Sec. Vilsack made similar points in a conference call with agricultural reporters last week.

The DTN item also pointed out that, “Johnson added that Sen. Charles Grassley, R-Iowa, and House Agriculture Committee Ranking Member Collin Peterson, D-Minn., have indicated support for writing the next farm bill early. ‘So those conversations are happening up here and they are happening in particular because ARC [Agriculture Risk Coverage] has been real problematic,’ Johnson said.”

However, while speaking at an agricultural forum at the Kansas State Fair on Saturday, Senate Ag Committee Chairman Pat Roberts (R., Kans.) and House Ag Committee Chairman Mike Conaway (R., Tex.) indicted no desire to open the Farm Bill early.

Chairman Conaway noted that low prices have spurred calls for re-opening the Farm Bill and for consideration of ad hoc disaster assistance; he indicated that “we are going to be very resistant to that.” Similarly, Chairman Roberts pointed out there could be a risk of losing more than could potentially be gained if the Farm Bill was opened back up.

In his DTN article, Mr. Clayton added that, “The Senate Agriculture Committee has scheduled a hearing for Sept. 21 with Vilsack specifically to look at USDA and the state of the farm economy.”

Donnelle Eller reported on the front page of the business section in today’s Des Moines Register that, “Iowa’s farmland values dropped 8.7 percent over the past year and have fallen about 25 percent from peaks in 2013, a new survey shows.

“The state’s average farmland value through September was $6,486 an acre, according to a survey from the Iowa Chapter of Realtors Land Institute. The average value in September 2013 was $8,750 an acre.”

The Register article noted that, “The report echoes other surveys. For example, the Chicago Federal Reserve reported in August that farmland values in Iowa had dropped 6 percent over the past year.”

Ms. Eller added that, “Land values are expected to continue to fall, due to declining corn and soybean prices, which are at least 45 percent below peaks in 2012, a drought year…U.S. farm income this year is expected to be 42 percent lower than the peak in 2013, according to the U.S. Department of Agriculture.”

A news release today from the U.S. Department of Agriculture indicated that, “Today, the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) released the results of the 2015 Certified Organic Survey, which show that 12,818 certified organic farms in the United States sold a total of $6.2 billion in organic products in 2015, up 13 percent from $5.5 billion in 2014. California and Wisconsin had the largest number of certified organic farms with 2,637 and 1,205 respectively.

“The top 10 states in terms of sales accounted for 78 percent of total U.S. certified organic sales in 2014 and in 2015, showing continued national leadership by California with $2.4 billion, up $205 million since 2014. Additionally, the industry shows potential for growth in production as existing organic producers are transitioning another 151,000 acres nationally to organic production.”

Graph From USDA’s 2015 Certified Organic Survey

The USDA release added that, “The vast majority of certified organic agricultural products sold in 2015 were sold close to the farm or ranch, with many growers having multiple outlets. The first point of sale for 75 percent of all U.S. organic farms and ranches was within 100 miles from the farm and 35 percent was 100-499 miles away, virtually unchanged since 2014.

“Additionally, 71 percent of U.S. certified organic farms and ranches reported selling products to wholesale markets. Wholesale markets, such as buyers for supermarkets, processors, distributors, packers and cooperatives, were serving as the marketing channel of choice for U.S. organic farmers and ranchers to get their products to customers. Thirty-six percent sold directly to consumers and 22 percent sold directly to retail markets and institutions.”

A two-page overview of today’s USDA report is available here.

Rick Barrett reported on Monday at the Milwaukee Journal Sentinel Online that, “Some of Wisconsin’s largest farm groups are worried that federal regulators will increase restrictions on atrazine, a weed killer sprayed on corn fields and other crops.

“This summer, the U.S. Environmental Protection Agency issued a draft ecological risk assessment of atrazine and recommended reducing the allowable levels.

“Farm groups, including the Wisconsin Corn Growers Association, the Cooperative Network, Wisconsin Pork Association, Midwest Food Processors, the Dairy Business Association, Wisconsin Farm Bureau Federation and the Wisconsin Soybean Association, have asked farmers to contact the EPA and urge the agency to reconsider its position.”

Mr. Barrett indicated that, “The farm groups say the plan represents a ‘terrible precedent‘ and could harm the environment.

“‘Atrazine plays an important role in conservation tillage, a farming practice that reduces soil erosion and runoff. An atrazine ban would require more soil tillage to control profit-robbing weeds and will be a net-negative for the environment,’ said Tom Liebe, president and CEO of Cooperative Network.”

DTN writer Todd Neeley reported on Monday that, “Personal information about the owners of concentrated animal feeding operations should never have been released by EPA back in 2014, a federal appeals court ruled unanimously Friday. Furthermore, a district court erred in not exempting the release through the Freedom of Information Act, the court ruled.

“In its ruling, a three-judge panel of the U.S. Court of Appeals for the Eighth Circuit in St. Louis ordered the case be sent back to a district court in Minnesota. That is where the American Farm Bureau Federation and the National Pork Producers Council had sought injunctive relief, which included requiring a number of environmental groups that were given the information to return it to EPA.”

8th Cir says EPA disclosure of personal info re: CAFO owners would be “unwarranted invasion of personal privacy.” https://t.co/6sSw0rqZ3j

— Center for AgLaw&Tax (@CALT_IowaState) September 12, 2016

Mr. Neeley explained that, “EPA already has released CAFO information from 29 states. The agency has collected similar information from seven other states it had intended to release, as well. The information includes GPS coordinates, financial statuses, addresses and telephone numbers of CAFO owners.

“In its ruling, the court provides examples of how environmental groups use the information. On one occasion, the court said, environmental groups entered a private property to take photos they had planned to post online.”

The DTN article added that, “The information released involved tens of thousands of farmers and ranchers, according to the American Farm Bureau Federation.

“‘This was an unwarranted invasion of personal privacy by a federal agency in violation of law,’ AFBF General Counsel Ellen Steen said in a statement.”

Jesse Newman reported yesterday at The Wall Street Journal Online that, “Federal forecasters anticipate record corn and soybeans harvests this year, likely extending a yearslong downdraft in agricultural prices and farm profits.

“The U.S. Department of Agriculture on Monday projected farmers this fall will collect a record 15.09 billion bushels of corn and 4.2 billion bushels of soybeans, topping analyst expectations and pressuring futures prices for the crops.

“The record haul could spell more trouble for farmers straining to cut costs and bunker grain amid a third straight year of falling prices for some crops.”

Graph From USDA’s Crop Production Report

Ms. Newman noted that, “The estimate for a massive soybean crop comes as farmers face their lowest average income levels since 2009, according to data released last month by the USDA, with net farm income projected to drop 11.5% to $71.5 billion this year.”

Christopher Doering reported on the front page of the business section in today’s Des Moines Register that, “The bumper crops, however, are expected to do little to help farmers battling low commodity prices that have left many struggling to post a profit.”

Mr. Doering stated that, “The prolonged downturn in commodity prices has spread beyond the farm and also is affecting banks, equipment companies and seed and chemical manufacturers, including DuPont-Pioneer in Johnston.”

And Associated Press writer David Pitt reported today that, “Aside from a sense of pride in breaking the previous record by nearly a billion bushels, farmers won’t benefit. They’ll lose money on virtually every cob.

“It’ll be the third consecutive year in which most corn farmers will spend more than they’ll earn. The growing has been too good and the resulting glut of corn depressed prices to a decade-low. It’s a similar story for soybeans, the second most common Midwest crop.”

Mr. Pitt noted that, “As a result, farmers are cutting costs, dipping into savings or going further into debt. Federal crop insurance and payments that help protect farmers when prices fall too low offer some protection, yet many farmers and their spouses supplement income with off-the-farm jobs. The drop in farm profits raises questions about agriculture’s boom-and-bust cycles and why people adhere to what at times is seemingly not a sustainable business model.”

Today’s AP article added that, “To get by, nearly a third of U.S. farms have to borrow money, and borrowing has increased because farmers need to finance operating costs and near-historic low interest rates make borrowing inexpensive. But banks are reporting an increase of past-due loans, an indication that borrowers are struggling to repay in a time of tight profit margins.”

Meanwhile, Bloomberg writers Megan Durisin and Jeff Wilson reported yesterday that, “The big crop could leave farmers and grain elevators squeezed on space to store excess supplies. U.S. soybean inventories before the 2017 harvest will rise 87 percent to 9.95 million tons, the highest in a decade, the USDA estimates. Stockpiles are climbing as the USDA lowered its outlook for imports by China, the No. 1 consumer, to 86 million tons, down from 87 million forecast a month earlier.”

As surplus crops pressure grain and soybean prices this year, Corn Belt farmers who rent land for production have taken a keen interest in analyzing the level of potential break-even rates of rent that can be paid to landlords.

Reports from the U.S. Department of Agriculture in August indicated that land values in 2016 did decrease nationally, and the overall cash rental rate in Iowa was $235/acre, down 6% from 2015.

With respect to Illinois cash rental rates, Todd Gleason recently tweeted the graph below that contained USDA data for the 2016 per acre county average rental rates in Illinois.

DTN Executive Editor Marcia Taylor reported yesterday that, “Farmland Partners Inc. CEO Paul Pittman created shockwaves with the purchase of 22,300 acres of Illinois farmland earlier this year, the state’s largest single purchase ever. The institutional investor’s spree in U.S. farmland continued Monday, as Pittman’s company announced it was merging rival American Farmland Company (NYSE: AFCO) into its cropland kingdom.

“While still modest in size for a New York Stock Exchange-traded REIT, the merger will create the largest U.S. farmland real estate investment trust (REIT) ‘by miles,’ Pittman told DTN in an interview.”

Ms. Taylor added that, “Investor interest in farmland soared during grain market highs over the past decade. But American Farmland’s stock has been undervalued since its public launch, trading about $6 per share when its underlying assets were worth $9 per share, Pittman said. He said the firm’s assets were sound, but the company was too small and carried too much overhead.

“Until now, Farmland Partners (NYSE: FPI) concentrated on acquiring row-crop farms that raised corn, soybeans, wheat and cotton, largely in the Midwest, Plains and Delta. American Farmland’s smaller portfolio specialized in permanent crops such as almonds and oranges. The combined entity will consist of approximately 75% row-crop farmland and 25% specialty crops by value. Farmland Partners expects to consolidate American Farmland’s operations into its existing Denver-based headquarters and realize significant cost savings by trimming administrative and overhead costs.”

Pat Westhoff, the Director of the Food and Agricultural Policy Research Institute at the University of Missouri, indicated in a column last week that, “Recent reports by the U.S. Department of Agriculture and our institute mostly confirm bad news for the farm sector: Commodity prices and farm income are down, and a quick recovery appears unlikely.

“Grain prices for crops harvested in 2016 are projected to drop to the lowest level in a decade. Corn and wheat prices for this marketing year might be less than half the levels of just four years ago.”

Dr. Westhoff noted that, “For farmers, about the only piece of good news was that net farm income for 2015 and 2016 was not quite as low as previously estimated.

“Much of the reason for the ‘less bad‘ outcome was that farmers had managed to reduce production expenses more than previously estimated. Farmers are doing what they can to reduce input purchases and investments in land and machinery.

“Land prices and rental rates have stopped increasing in much of the country. National average cropland rental rates fell this year for the first time since 2007, USDA reports, and average farmland real estate values declined for the first time since the recession year of 2009.”

Dr. Westhoff added that, “Prospects for a quick rebound in the farm economy are not bright. FAPRI projects average corn prices below $4 per bushel and soybean prices below $10 per bushel for the next five years. Fuel prices might eventually increase, and farmers cannot count on interest rates remaining as low as they have been…[S]till, after years of concern about tight food supplies and high food prices, the pendulum has swung. At least for now, the problem is more one of surplus than shortage.”