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Tips To Handle Today’s Farmland Market

http://www.agricultu….jpg&type=admin Jeff Caldwell 09/23/2013 Looking for proof the farmland market is starting to plateau? Look no further than the fields of Iowa, where the often-foreshadowed plateau in land values seems to be reaching fruition, at least in parts of that state, new information shows. Iowa has seen a meteoric rise in land values in the last few years, some say more so than other Corn Belt states. Now as the costs and returns for a crop start to converge and factors like taxes start to compel landowners to keep their hands on their land, prices are starting to hit the plateau experts say has been on its way for months. “The dynamics of the farm market, specifically inputs, have rocketed. Cash rents have not kept pace with the profits farmers have gotten. People are wondering what will happen with cash rents,” says Randy Hertz, accredited farm manager and land consultant with Hertz Farm Management, Inc. “There are just fewer farms on the market now. The reason for that is when you’ve got a land market that increases in value, people don’t want to pay taxes on that increase. And you’ve got low interest rates. They say ‘I’m earning 3% to 3 1/2% on rented land. What would I do if I sold? I’d have to pay tax on $9,000 an acre in capital gains. You’re going to pay one-third of that in taxes, plus the privilege of 1% on a CD. So, you’ve seen a lot fewer farms for sale.” Recent data show that three crop-reporting districts of Iowa — the Corn Belt state that’s seen the greatest volatility in land price shifts in the last few years, Hertz says — saw a tapering-off in their climb in value: Northeastern, southwest, and west-central Iowa. Much of that slump has come as a result of commodity prices slipping, interest rates, taxes, and a continued lack of “stable alternative investments.” This is compelling landowners to hold tighter onto their land in many cases, says Kyle Hansen of the Iowa Land Realtors Institute, leader of a statewide survey of farm managers, rural appraisers, and ag lenders. The leveling off in land values isn’t quite yet reaching every corner of the Corn Belt, though. Even if prices stay in the black for the coming few months, that doesn’t mean the reversal in Iowa won’t spread to other major corn- and soybean-growing parts of the nation’s center. “These prices are not at the level of increases we’ve seen in recent years, but they are still upward,” says Dale Aupperle, a farm manager with Heartland Ag Group in Forsyth, Illinois, and chairman of the Illinois Land Values and Lease Trends project, which recently conducted a similar survey of land values in that state that showed values are still climbing, but leveling off in their rise. If the boat does tip, and values do dip into the red, how far might things go? “While most bankers expected farmland values to remain at current levels, an increasing number of respondents felt farmland values may have peaked. Compared with previous surveys, fewer bankers expected farmland values to keep rising. More bankers also expected farmland values to drop after harvest likely due, at least partially, to expectations of lower farm income,” says Nathan Kauffman, economist with the Federal Reserve Bank of Kansas City. “Among bankers anticipating a decline, though, a majority of estimated farmland values would fall less than 10% during the next year. Very few bankers expected that farmland prices would drop more than 10%.” So, what should you do? Hertz recommends three things to help navigate a shaky farmland market: Maintain a buying position. “As people get panicky, they may be willing to take a lower price or offer lower than the general public really would anticipate. It’s an emotional decision,” he says. Continue making cash grain sales. Doing so will help you keep a consistent income streaming in, regardless of where the land market is going and how those sales may affect your ability to secure more land. “How could you ever look a gift horse in the mouth? We can sell new-crop soybeans for over $13/bushel cash. Those are phenomenal prices. Yes, we’re going to get kicked in the shorts with our soybean yield, but you still have to sell the stuff,” Hertz adds. “You’ve still got to make a decision.” Look again at land rents. “If you had not increased along with where it should’ve been, you probably should’ve gotten an increase. If you were pretty good but not at top of the market, rent will probably be pretty good next year. If you were at the high for cash rent last year, probably adjust downward,” Hertz says. Continue reading

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Eco-Watches: Groups Attain Mixed Results In The Alternative Market

http://www.ft.com/cms/s/0/4befe99c-eee3-11e2-b8ec-00144feabdc0.html#ixzz2fKiu01ri By Syl Tang It was just a matter of time before ecology touched the watch industry. With nearly 15m watches sold in the US alone in 2012, several new companies are trying to make the business a bit greener with biodegradable and natural material watches. In 2008, Marcella Maselli became troubled by the plastic watch trend. Michael Kors had entered the marketplace with plastic bracelet timepieces, and the Italian company Toywatch was experiencing enormous success. Ms Maselli, director of product development for E Gluck, the company in charge of the Armitron and Anne Klein licences, says: “Everywhere I looked, I saw plastic. I wanted to make something with the look but not the environmental impact.” She started working on a line called Sprout, which would be based in New York, and be biodegradable. But it was not quite as easy as she had hoped. Traditional plastics are oil-based, and therefore not biodegradable. Finally the company used polymer polylactide, extracting starch from corn, converting the sugar into lactic acid, and turning it into pellet form, which then became mouldable and injectable corn resin. Made entirely of plant-based feed, corn resin watch bracelets break down naturally over time. Sprout could not figure out some of the elements: the hands, the crown and movement had to be traditionally made. However, the crystal was replaced with one that a biodegradable mineral, and the traditional watch battery with a mercury- and lead-free option. The result was a watch that would biodegrade by 80-93 per cent in a landfill in an estimated three years, with decomposition speeding up in a compost environment. During the process, the watch would not leak toxins or chemicals, which is the biggest problem with traditional plastics. There are some style limitations to the Sprout eco-friendly watches. “Because of the nature of the materials, you cannot do everything with corn resin,” says Ms Maselli. You can’t make a gold watch or a silver-plated watch.” Not being able to take on every trend has not hampered the company. Sprout has expanded to 80 styles carried in 1,000 sales outlets, including the US department store Nordstrom, where new models such as cork and bamboo variations are introduced five times a year. Also chasing the alternative material option is WeWood, a company that started making watches in 2010 with wooden bands, and cases that had not been treated with chemicals, ideally using already harvested scraps. Historically, wooden watches have not fared well. If the wood had not been treated with chemicals, insects consumed the material. With other watches, wearers discovered the wood would simply deteriorate over time. And some cost thousands of dollars. Based in Florence and Los Angeles, WeWood makes no secret of the difficulties. Neither of the two founders, Daniele Guidi, an accessories distributor, and Alessandro Rosano, a shoe designer, had any experience. “From when we made the first sample, to understand what was going wrong, to make things work well together, [was] a work in progress. [From] that first watch to today, the failure [rate] has been reduced drastically,” says Mr Guidi. The company found its test groups by tracking the way the watches they sold fared in an increasing number of climates and locations. Wooden watches had existed for some time through other companies such as Tense, Martin & MacArthur, AB Aeterno, and SpringBreak, but WeWood’s reclaimed message, wide variety of styles and modest prices seemed to resonate. Made primarily in Indonesia and China from maple, black wood, recycled teak and rosewood, WeWood’s pieces, which retail for between $120 and $140, and weigh just 1.5 ounces, became popular with consumers. Singers Rihanna and Ke$ha, and pop group the Black Eyed Peas, are fans and the company ships to more than 30 countries. WeWood plans to make a watch with entirely ecological movements. Only the springs would be metal. But to make this a reality, the cost would be astronomical, at $20,000-$30,000 each. “This sort of thing appeals to the 20- to 25-year-olds, says Katie Nadler, chief executive of the fashion recommendation engine, TopShelf. “The ‘millennials’ became aware from a young age of the potential long-term environmental damage of everyday actions. It’s a thoughtful approach on what they wear.” However, TopShelf, which makes about 100,000 monthly purchase recommendations to its subscribers, says that, despite a growing number of requests, eco watches are still a very small percentage of the 10,000 to 15,000 watch purchases that it recommends. “The major catalyst for volume growth in eco-friendly watches will come when industry giants such as Fossil start to focus on it,” says Ms Nadler. An industry analyst who asked not to be named noted: “There’s just 11 brands that surpass $100m in sales each. It’s absurd for a start-up watch company to try to take them on.” WeWood admits it struggled initially with low production numbers and a lack of resources. Some feel that ecologically focused watch companies are simply riding a larger trend for anything green. According to LGI Network – an NPD Group company that tracks 72 watch brands – although 90 per cent of the market is battery-driven watches, the trend is just a matter of marketing. Fred Levin, president of LGI, says: “When you look at how much energy we use elsewhere in our daily lives, your watch is such a small part – the battery even smaller. It lasts for three years and is one of the most efficient sources of energy … This is a non-event. It’s just that marketers always focus on ways to appeal to consumers.” Continue reading

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Emerging Economies Poised to Increase Renewables Market Share

August 23, 2013 by Energy Manager Today Staff There is clear evidence that emerging economies will gradually take a larger share of the renewable energy market, according to research by Frost & Sullivan . Economic development and revised energy priorities in the regions of Asia, Latin America, the Middle East, and Africa will drive a more sustained increase in the adoption of wind, solar and biofuel generation technologies, according to Frost & Sullivan’s Annual Renewable Energy Outlook 2013 . For example, from 2010 to 2015 EU countries will account for 27.3 percent of global renewable energy capacity additions. From 2015 to 2020 EU countries will account for just 20.7 percent of such additions, the report says. In contrast, from 2010 to 2015 India will account for 6.2 percent of global renewable energy capacity additions. That figure will rise to 9.9 percent from 2015 to 2020, the report says. The Middle East’s share of global renewable energy capacity additions will rise from 3.6 percent to 5.2 percent in the same time period, the report says. As a result of technological innovation and mass deployment leading to scale economies, the cost of renewable energy has declined dramatically in recent years, the report says. Solar photovoltaic module prices declined by up to 75 percent between 2008 and 2012 and the price of wind turbines has declined by 25 percent during the past three years. Such falls, combined with the need to diversify away from a high reliance on fossil fuels, enable developing countries to accelerate the adoption of new energy sources, the report says. Urbanization, population growth, and energy security concerns are other key drivers for the rise of renewable energy capacity in emerging regions, according to Frost & Sullivan. By 2014, 55 percent of energy decision-makers at large firms operating in emerging economies believe there will be significant to transformative changes in the way their firm manages energy, according to a Verdantix report released in September . This figure is eight percent higher than energy leaders in developed economies. Global Energy Leaders Survey 2012: Emerging Economies also found firms from emerging economies move energy management up the corporate ladder, with 75 percent of executives surveyed saying they make energy-management decisions at a global, national or divisional level — 4 percent higher than those from developed nations. Continue reading

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