Tag Archives: expected
Expected Cash Rents in 2014 on Professionally Managed Farmland
SEPTEMBER 3, 2013 By: University News Release By Gary Schnitkey , University of Illinois Courtesty of farmdocdaily Last week, the Illinois Society of Professional Farm Managers and Rural Appraisers released results of its mid-year survey concerning farmland prices and cash rents. Results from this survey suggest that cash rents in 2014 will be slightly below 2013 levels. Survey The Illinois Society of Professional Farm Managers and Rural Appraisers conducts a mid-year survey of its membership concerning land values and rental outlook. The Illinois Society is a professional organization whose members manage farms, appraise farmland and other agricultural property, and broker farm real estate. Society members are knowledgeable about the farmland and cash rental market. More information on the Illinois Society and its members can be found on its website ( www.ispfmra.org ). Several questions on this year’s survey dealt with cash rents in 2013 and expected cash rents in 2014. Cash rent questions were asked for four different land productivity classes: Excellent quality farmland has expected yields over 190 bushels per acre, Good quality farmland has expected yields between 170 and 190 bushels per acre, Average quality farmland has expected yields between 150 and 170 bushels per acre, and Fair quality farmland has expected yields less than 150 bushels per acre. Survey respondents were asked what “average” cash rent levels were in 2013 and what average levels will be for 2014. Note that these are average levels. There is a considerable range in cash rents even within a productivity class for a specific farm manager. Landowners have different goals with their farmland, leading to large differences in cash rent levels. Also professionally farm managed farmland has higher cash rent levels than average. A number of reasons why this occurs have been given, usually revolving around the market knowledge of professional farm managers and the return desires of professional farm management clients. Cash Rents in 2013 and Expected Cash Rents in 2014 For excellent quality farmland, the 2013 cash rent averaged $388 per and the 2014 cash rent is expected to be $374 per acre, a decline of $14 per acre (see Table 1). For good quality farmland, the 2013 cash rent averaged $332 per acre and the 2014 cash rent is expected to be $318 per acre, a decline of $14 per acre. For average quality farmland, the 2013 cash rent averaged $278 per acre and the 2014 cash rent is expected to be $263 per acre, a decline of $15 per acre. For fair quality farmland, the 2013 cash rent averaged $224 per acre and the 2014 cash rent is expected to be $212 per acre, a decline of $12 per acre. Continue reading
Agriculture Is Expected To Remain Strong In The Coming Decade
Mark Seamon, Michigan State University Extension | May 14, 2013 It can be tricky to predict the future, especially when this future includes factors of weather and world economies. By using specific assumptions, the USDA has developed a “conditional scenario” of the future of agriculture in the next decade, according to “ USDA Agricultural Projections to 2022 .” Overall, this report indicates an optimistic future that includes some bumps along the way. A couple of these bumps include the short-term softening of commodity prices which are affected by increased production encouraged by high prices from the drought induced short crops of 2012 and increasing crude oil prices. The prediction of an optimistic future is formed by the consideration of many factors both domestically and internationally. According to the USDA report: Global developments of strengthening economies in many countries around the world support demand of agricultural products. Improved economies indicate an increase in demand for diversified food products (like processed foods, meat and poultry) as well as increased demand for biofuels. World economic growth is projected to occur at 3.3 percent annually while the U.S. economy is projected to grow at a rate of 2.6 percent. The U.S. dollar is expected to continue to depreciate, which can be positive for encouraging exports. The USDA report further explains how energy is expected to continue to be an important factor for agriculture due to these factors: Crude oil prices are expected to increase over the next decade. Domestic corn-based ethanol and biodiesel production will continue at current, or slightly increased, levels. Global biofuel production is expected to expand steadily. The European Union will remain the largest importer of biofuels, increasing the utilization of feedstocks (wheat and corn). Argentina and Brazil will remain the dominant biofuels exporters, increasing the utilization of feedstocks (soybeans for biodiesel and sugarcane for ethanol). An effect of improving global economies is the demand for processed foods and meat products. In the short term, meat prices may rise due to reduced production but as feed costs moderate and meat demand strengthens this sector should realize improved profits. While the factors that were used in developing these projections are critical to the accuracy of the future outcomes, unpredictable factors can have significant impacts on actual performance. One clear example of this is the sharply reduced crop production of 2012 that was a result of a drought. Michigan State University Extension will continue to use this type of information to help plan programs to meet the needs of Michigan farmers, citizens and businesses. Continue reading
