Season’s Greetings! We want to wish you and your family a happy holiday season and successful upcoming year. Below are some of our thoughts looking back at the year and forward to the next.
Production: Agriculture entered its fifth year of declining commodity prices. Going into the year most rice producers were pessimistic due to low yields and prices in 2016. Corn, cotton, peanut, and soybean producers in the Mid-South were in slightly better position but nothing to brag about. Planting started earlier in most areas but mother nature threw on the breaks with large amounts of precipitation causing major flooding on most river throughout Arkansas. After the floods receded, planting continued.
The growing season was wetter than normal which helped reduce irrigation expenses and improve yields. Dicamba… You can’t talk about the 2017 growing season without mentioning dicamba. The Arkansas Plant Board had more damage claims this year than ever before which led to an in-season ban. Against the odds, crop yields turned out to be well above last year and better than expectations. Rice prices are up roughly 20%, cotton is up 5% while corn and soybeans are down 5% and 7% respectively since this time last year. As we approach the new year, we expect most prices to stay fairly stable (+/- 5%) although in agriculture, we are one drought or major economic/political event away and prices can drastically swing. Bottom line is economic profits have diminished and producers/landowners must continue finding ways to minimize cost but not at the expense of yield and profit.
Land: Mid-south land prices are holding from all sources and data we see. Most sources estimate Mid-south land values increased somewhere between 2-3% since this time last year. In most areas, there appears to be enough active demand to keep cropland prices from sliding. Like most assets, farmland cash returns to asset value have been driven down by monetary policy. Currently we do not see any major increase in cash returns nor increased appreciation. Although returns are low this year compared with stocks and some bonds, over the long-term farmland has generated greater returns with less risk than almost any other asset class. This trend is expected to continue in the long term.
Technology: With every passing day a new technology company seems to launch in the ag spectrum although consolidation of companies has picked up. GFM continues to review new technologies that can improve our capabilities and enhance decision making. This may be from a platform like Farmer Business Network that is pushing to make pricing of inputs more transparent to Farm Logs or Climate that provide in season crop health imagery, precipitation, and heat units to other mapping programs such as Surety that help us develop information for real estate brokerage and farm management.
Professional Development: Every year, we take time to attend conferences and continuing education courses in order to better serve clients. Ted and Jeffrey attended the Realtor Land Institute meeting in the Spring. In the Fall they attended the American Society of Farm Manager and Rural Appraiser meeting. Some of the topics covered were economic transitions challenging US agriculture, estate planning and tax implications, title issues, and negotiations in natural resources. Houston also attended the ASFMRA conference and other appraisal education courses.
GFM In The News:
- Drifting crop chemical deals 'double whammy' to U.S. farmers - Reuters
- Got Chicken Litter? Pot of Soil Health in Poultry Waste
- Inside Land Sales Secrets
- Rice Land Prices Stay Strong
- A-State’s 24th annual Agribusiness Conference set for Feb. 14
Personal Note: GFM has had many successes this year. Samuel King, our intern, continues to excel at ASU and is showing us how to use new tools. He recently obtained his UAS pilot license and has started developing videos for our real estate and auction listings. Ashley Cheney obtained an Arkansas real estate salesperson license this year. She also rescued and nursed back to life three kittens that were abandoned. Michelle Womack’s family added one grand baby to her family which was the first girl in 30 years.
Laverne, Michelle’s mother, and Ted added two great grandchildren. Houston Matthews continues to build the appraisal business and recently found out his wife and him are expecting an addition their family. Jeffrey Hignight was recognized at the annual Realtor Land Institute (RLI) conference for obtaining the Accredited Land Consultant designation. He also was elected to the Executive Council of the American Society of Farm Managers and Rural Appraisers (ASFMRA) as the YPN Vice President. Last but not least Jeffrey married his sweetheart this fall after courting her for four years. Ted Glaub continues to serve on many committees through professional organizations such as RLI, ASFMRA and the Arkansas Soybean Association.
Safe Travels and Best Wishes During this Holiday Season! See you in 2018!