Tag Archives: cash
Can Crop Prices Keep Pace With The Cost Of Ag Land?
By John Fitzgerald | 08/27/13 REUTERS/Adrees Latif High corn and soybean prices have farmers plowing their cash back into land, which is driving land prices up. There’s an interesting quote in Julie Buntjer’s story in the Worthington Daily Globe about some Nobles County farm land that sold for a county-record $13,000 per acre. The land is good farm land and there were a lot of bidders, said Steve Prins of Prins-Sliver Auction Services. A Sibley, Iowa, buyer got the 156.8-acre parcel for a total of $2,038,400, which went to the heirs of Ella Mae Sall. Prins said high corn and soybean prices have farmers plowing their cash back into land, which is driving land prices up. Prins says he has a long list of people willing to pay almost any price for land. Ag prices have “been good for the past few years and that’s the reason they can afford to pay these prices,” Prins said. Here’s the interesting quote: “W e hope that the farming industry continues to be good.” Yup, that’s the key because when the prices aren’t so good … Per Peterson at the Marshall Independent picks up on some state Department of Natural Resources statistics about last year’s pheasant and duck harvests. The number of pheasant and duck hunters increased 8 percent, he reported — in 2012, an estimated 84,000 people hunted pheasants, and 90,400 hunted ducks. “Although ruffed grouse are on the downward side of their 10-year population cycle, the number of grouse hunters increased 6 percent in 2012 to 97,200, the DNR said. Statewide estimates show that hunters harvested 264,000 pheasants, 835,000 ducks and 355,000 ruffed grouse,” Peterson wrote. Here’s the first paragraph in a story in the Fargo Forum : “A Moorhead man was sentenced to almost a year in jail after pleading guilty to child endangerment and drunken driving charges after police say he drove his daughters at speeds up to 100 mph, drinking beers he had them open for him .” When a deputy stopped Thomas Eugene Iverson, 48, his 12-year-old twin daughters said their father had been driving between 90 and 100 mph, that Iverson had been having them open his beers for him, and one of the girls told the deputy she’d pretended to throw up to try to get her father to slow down. Meanwhile, down in Worthington, eighth-graders are all being kitted out with iPads. So reports the Globe’s Ryan McGaughey . Seventh-graders will get them today. Fifth-and sixth-graders get them next week, third- and fourth-graders a day or two after that. While students and teachers take to the devices intuitively, simply inventorying each iPad and getting them up on a network that will filter web pages was a monumental task , said the district’s technology director, Amy Ernst. No detail in the story about how much the iPads cost, where the money came from or why the district felt the need to outfit students as young as 8 with iPads. No doubt they felt it was one of those “21st century” things to do. The Willmar city utility company is warning of a phone scam where customers are told their electricity will be cut off unless they wire money to the scammer, reports David Little of the West Central Tribune . The utility does not use money wiring or disconnect power without going through the proper process. Call Willmar Municipal Utilities at 320-235-4422 to verify any call made about disconnection. OK, here we go down the rabbit hole in a story by Tom Olsen of the Duluth News Tribune : Marcus Michael Linky, 22, is a felon – convicted of third-degree burglary in 2011 – which means he can’t own a gun. Police were called to a house near his residence on a report of a fight. They didn’t find a fight, but they did see a long-haired man step outside an apartment building holding a rifle. Police drew their weapons and ordered the man to drop the rifle, which the man did and then ran back into the building. Police found the rifle and, with the help of another resident, identified the rifle as belonging to Linky. Officers got permission to enter Linky’s apartment and found him in bed with a bad haircut and remnants of hair on his chest and back. They also found clothing similar to the clothes worn by the long-haired man who was seen throwing the rifle. Later, Linky said he cut his hair about a week earlier but had not showered since, which is why he had hair on his shoulders and chest. He admitted to handling the firearm but said he knew he could not purchase it because he is prohibited from handling or possessing firearms, according to the complaint. Linky’s next court appearance is scheduled for Sept. 18. Continue reading
Upbeat Deere Farm Takings Number Puzzles Investors
14 th Aug 2013, by Agrimoney.com US farmers’ cash takings are to remain at an “excellent level” despite tumbling in crop values, Deere & Co said, remaining sanguine on European farm finances too – but acknowledging some setbacks to former Soviet Union customers. Deere & Co, at an investor meeting after announcing better-than-expected quarterly profits, faced a barrage of questions over forecasts that US farmers’ cash receipts will fall by only $10.1bn, or 2.6%, in 2014 to $379.7bn, remaining “historically high”. Deere forecasts for US 2014 cash receipts, and (change on year) 2014 receipts: $379.7bn, (-$10.1bn) Comprising – Crops: $198.3bn, (-$6.5bn) Livestock: $170.3bn, (-$1.4bn) Gov. payouts: $11.1bn, (-$0.2bn) 2013 receipts: $389.8bn 2012 receipts: $402.1bn 2011 receipts: $384.7bn Barclays analyst Andrew Kaplowitz said that while Deere was “usually pretty conservative” with forecasts, “if I talked to bears out there on ag, they would say that your forecast looks not conservative at all”. Larry de Maria at William Blair asked why Deere, while utilising larger crop estimates than the USDA, was using similar price forecasts, when a large crop might imply weaker values, with Bank of America, Credit Suisse and JP Morgan analysts also questioning the receipts forecast. The cash receipts number is particularly important for agricultural machinery investors, in being closely correlated with equipment demand. Susan Karlix, Deere’s manager of investor communications, saying that cash receipts “are expected to remain at an excellent level, helping keep farmers in a financially sound position”, termed them “the number one predictor of farm equipment sales”. Volume and price However, Marie Ziegler, Deere’s deputy financial officer, strongly defended the estimate, saying that “at this stage of the game this is our best forecast”, flagging the role of strong crops in making up for lower prices. “Remember that cash receipts is a function of quantity, which will be very good this year, in addition to price,” she said. “Cash receipts doesn’t discriminate between the commodity price and the quantity.” Tony Huegel, Deere investor relations director, said that the Deere estimates had been put together before the USDA’s numbers on Monday. And while $4.90 a bushel was historically “very strong pricing” for corn, even with prices in the low-$4s a bushel, “farmers are still making good money”. Arable vs dairy Deere was sanguine over the impact of lower crop prices on European Union agricultural finances too, saying that while “arable farm income is weakening”, it “remains at supportive levels”. Furthermore, “improving milk prices will support dairy farmers”, with prices in the UK hitting a record 30.77p per litre in June and, in the EU as a whole, butter values last month standing 57% higher than a year before, with skim milk powder up by more than 40%. However, Deere acknowledged some dent to prospects in the growing former Soviet Union market from tight credit and some crop setbacks. “Hot, dry weather has impacted crop prospects in southern Russia and Ukraine, and credit availability is also hurting equipment demand,” Ms Karlix said. With import duties also weighing on combine demand, Deere nudged down to “moderately lower”, from “down slightly”, its forecast for farm machinery industry demand in the former Soviet Union this year. Continue reading
Global Investment Falters But Tax Havens Prosper, U.N. Finds
By Tom Miles GENEVA | Wed Jun 26, 2013 6:05pm BST (Reuters) – Efforts to stop companies syphoning money through tax havens are failing and offshore centres increased their share of foreign direct investment (FDI) again last year, according to a U.N. report. “Tackling offshore financial centres alone is clearly not enough, and is not addressing the main problem,” said the annual World Investment Report, published on Wednesday by economic thinktank UNCTAD. While investment sinks in many economies, one country is enjoying above all is enjoying a boom: the British Virgin Islands, with a population of 30,000, is now the fifth biggest recipient of FDI in the world, the report said. The Caribbean archipelago welcomed almost $65 billion (42.4 billion pounds) of inward investment flows in 2012, just less than fourth-ranked Brazil , and 10 times the amount of FDI it received in 2006. FDI flows to such offshore tax havens have soared in the past five years, rising from an average of $15 billion in 2000-2006 to $75 billion per year in 2007-2012, the report said. “Tax haven economies now account for a non-negligible and increasing share of global FDI flows, at about 6 percent,” the United Nations thinktank said. Meanwhile, traditional FDI – cross-border corporate acquisitions and overseas expansions – has slumped. Among the worst hit are rich euro zone countries such as Belgium, which attracted $103 billion in 2011 but lost money in 2012 as existing investors sold up. The Netherlands saw a similar but smaller reversal, while Germany ‘s $49 billion haul of FDI in 2011 shrivelled to less than $7 billion in 2012. Global foreign direct investment shrank by 18 percent to $1.35 trillion in 2012 and is likely to remain at a similar level this year, the report said. UNCTAD forecasts global flows of $1.6 trillion next year and $1.8 trillion in 2015. In tax havens, the vast majority of FDI flows do not go into projects based in the country. Instead they are redirected back to the source country, a process known as “round tripping”. “For example, the top three destinations of FDI flows from the Russia n Federation – Cyprus, the Netherlands and the British Virgin Islands – coincide with the top three investors in the Russian Federation,” the report said. That could mean that global FDI is actually even weaker than it appears, since a growing proportion is simply round-tripping. Even more money is channelled through “special purpose entities” (SPEs). Firms set up these foreign affiliates for specific purposes such as managing foreign exchange risk or facilitating the financing of an investment. Money flowing to SPEs in just three countries – Hungary, Luxembourg and the Netherlands – amounted to $600 billion in 2011, dwarfing the $90 billion of flows to tax havens. Those countries’ SPE flows were not counted as FDI in the report. However, the report said SPEs were gaining importance relative to FDI flows and anecdotal evidence showed that most of the money sent to SPEs was invested in third countries. Still more tax is avoided through cross-border transfer pricing schemes, which companies can use to shift profits into low-tax jurisdictions and show apparent losses in high-tax markets, the report said. Despite the OECD trying to stem the flow of FDI to tax havens, the overall flows to tax havens overall “do not appear to be decreasing”, the report said, partly because big companies still needed somewhere to park their cash mountains. “Efforts since 2008 to reduce flows to OFCs (offshore financial centres) have coincided with record increases in retained earnings and cash holdings,” the report said. Also, although big investors such as Japan and the United States had succeeded in cutting the amount of flows to tax havens, many non-OECD members had now taken their place, ensuring the flows to tax havens continued and grew. The report called for a discussion of corporate tax rate differentials between countries, extraterritorial tax regimes and tax levied on repatriated earnings . “Without parallel action on these fronts, efforts to reduce tax avoidance through OFCs and SPEs remain akin to swimming against the tide,” the report said. (Reporting by Tom Miles; Editing by Ruth Pitchford) Continue reading
