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Posts Tagged ‘ethanol’
Sunday, January 1st, 2012
The recent rise in farm values has many farmers across the country ecstatic. While the past year has seen repeated bouts of poor weather that have been difficult for many farmers, the overall picture of American agriculture is exceedingly positive. While some regions are still struggling due to weather concerns, (Texas and the Southwest, for example, have seen land values drop because of the ongoing drought) they are exceptions rather than the rule.
Nationwide, the rise in ethanol production and international demand for major American commodities has led to increased land value, benefiting farmers across the country. 2011 saw farm values rise 17 percent in value from last year.
This increase has led some credit administrators to worry about the future of farm lending. According to the chair of the Farm Credit Administration Leland Strom, high land values warrant extreme caution on the part of lending agencies.
“Our job as a regulator, because the system loans to agriculture, is to ensure that proper underwriting standards are taken and there’s not an access of leverage being taken on by system institutions and lending into the ag sector.”
Despite these concerns, Strom remains committed to ensuring that struggling farmers have access to credit.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: ethanol, farm credit, land values
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Saturday, December 17th, 2011
Year-end estimates for 2011 seem to reaffirm that farm profits have reached record highs. According to U.S. Department of Agriculture estimates, farm profits are expected to rise nearly 30 percent to over $100 billion. In addition, the USDA estimates that farmers will have about $100 billion cash on hand to pay bills, a first in agricultural history.
The causes of these remarkable profits are primarily increased demand for staple crops like corn and soybeans. Increased demand from overseas buyers, such as rapidly developing China and India, has caused crop prices to skyrocket. In addition, increased demand for corn due to recent increases in ethanol production has further fueled this rapid growth.
That’s not to say that the picture remains rosy for everyone. Many farmers across the country are still recovering from a seemingly unending string of poor weather, which has brought some farmers to the brink of bankruptcy. In addition, American consumers are grumbling at the farm profits, largely due to increased food prices they are experiencing at grocery stores.
Finally, these record profits could serve as a double-edged sword, simultaneously enriching farmers while undermining public support for federally funded farm programs. In the midst of an austerity fever sweeping Congress, agricultural spending has been a frequent target of politicians looking to reduce the deficit. High farm profit only serves to fuel, however unjustly, efforts to defund vital farm subsidies.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: ethanol, farm profits, farm subsidies, usda
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Monday, December 12th, 2011
The past several months have seen a remarkable increase in commodity prices and in farm profits. In part driven by ethanol production and in part driven by increased foreign consumption, corn prices have gone through the roof, dramatically increasing the profits of farms across the country.
These increased prices have been a double-edged sword. While the increased profits have helped stimulate local economies and have been a major boon to farmers, they have come at the cost of increased prices for consumers at grocery stores across the country.
However, another cost of these increased land values has appeared in the form of higher property taxes. Particularly in states where agricultural property taxes are determined by examining the economic productivity of farmland, such Ohio, which sits in the middle of the Corn Belt, small farmers are expected to be hit hard.
In Ohio, property values are determined by Current Agricultural Use Valuation, which examines crop yields, crop patterns, and crop prices to determine the value of farmland. Given the sharp increase in the price of corn and the higher than average yields seen across the Midwest, many economists are predicting a significant increase in agricultural property taxes.
While the increased taxes are not likely to drive farmers out of business, they can pose a serious burden to small farmers who, unlike their corporate cousins, do not have the ready capital to absorb increased operational costs.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: commodity prices, ethanol, property taxes
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Sunday, November 27th, 2011
Across the Midwest, Conservation Reserve Program contracts are set to expire. The CRP was originally begun in the 1950s in order to combat erosion and improve water and soil quality by removing endangered land from agricultural production. Since then, the program has been a mainstay of the conservation movement.
The influence of the CRP, however, may be tested in the next year. In 2012, hundreds of thousands of acres of CRP land across the Upper Midwest may be planted again. Current CRP contracts are set to expire, and farmers are questioning the utility of keeping their land in reserve.
Part of the problem stems from the steady defunding of conservation programs. While the CRP still receives federal money, its conservation subsides have gradually shrunk, offering farmers less and less to leave their land fallow.
In addition, the increasing price of corn, largely due to the ethanol boom occurring across the Midwest, has tempted many farmers to plant new crops when their CRP contracts expire.
The CRP has greatly improved the quality of the environment in the Midwest and across the Mississippi River. According to U.S. Department of Agriculture estimates, wildlife, particularly migratory waterfowl like ducks, along the Upper Midwest has increased in number.
In addition, nationally, CRP lands have retained over 1.8 billion pounds of nitrogen and 400 million pounds of phosphorus, much of which would have leeched into the Mississippi River, creating and expanding dead zones across the Gulf of Mexico.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: Conservation, conservation reserve program, ethanol, midwest
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Sunday, November 27th, 2011
Deere & Co, the world’s largest farm equipment manufacturer, reported record fourth quarter profits, with predictions for equally high 2012 profits. The equipment company, along with many other American businesses, has been profiting heavily from record farm prices.
Farm profits across the country have been steadily increasing for the past several years, primarily driven by high crop prices. Corn and feed crops, for example, have risen in value largely due to increased ethanol production and increased international demand for American agricultural products. Recent free trade agreements in Asia and Latin American are likely to increase American farm exports and increase American farmers’ bottom line.
Overall, American farm incomes are expected to increase to a record $103.6 billion, a 31 percent jump.
Deere & Co incomes have skyrocketed, and estimated 2012 profits are expected to hit $3.2 billion. These record profits are being driven by increased equipment sales, which themselves are driven by increased crop prices. Prediction for the 2012 fiscal year place equipment sales up by 15 percent.
Deere & Co is not the only American enterprise enjoying the high crop prices. Local businesses that cater to farmers are benefitting from the increased cash flow. In addition, increased agricultural activity often translates into job creation, a major boon to economically depressed regions across the country.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: crop prices, ethanol, John Deere
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Sunday, August 21st, 2011
According to recent estimates by University of Missouri economists, more corn grown in the United States is being used for ethanol production than for livestock feed. Using U.S. Department of Agriculture Production and Supply/Demand Reports, Missouri economist Ron Plain estimates that 200 million more bushels of corn will end up in gas tanks than in livestock farms.
This is a major change for American agriculture. For generations, animal feed, primarily cattle and poultry, was the largest use of corn in the United States. The abundance of corn helped fuel the development of American livestock farms and created the meat-heavy diets that many Americans have today.
However, ever-increasing fuel costs over the last several decades have persuaded many policy makers to shift corn supplies to fuel production. The rise of global terrorism and the recent instability in the Middle East have only intensified calls for American to become fuel independent.
This new pressure on U.S. corn supplies and the rising price of corn has spurred some farmers to reduce their livestock and poultry stocks, hoping that fewer animals will help lower their maintenance costs given the high price of corn. However, that reduction could result in higher prices for consumers at the supermarket. Already faced by high food costs due to the increased demands of ethanol production, a dip in livestock supplies could result in even higher food prices across the country.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: corn production, ethanol, usda
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Sunday, June 26th, 2011
According to recent reports by the United Nation’s Food and Agriculture Organization (FAO) and the Organization for Economic Co-operation and Development (OECD), global food prices are likely to remain high throughout the rest of the decade and potentially beyond. While both organizations agree that prices will drop from their recent highs, overall, consumers worldwide can expect little relief from high costs.
The causes of higher food prices are many. One of the largest, and most controversial, is the continued emphasis on biofuels. Ethanol, in particular, has diverted a significant amount of the global food supply away from dinner tables. With supplies remaining stable, the increased fuel demands have driven prices up, threatening many developing nations, which often have difficulty feeding their populations. Both the FAO and the OECD have urged the G20 to end support for ethanol programs.
Another major cause of rising food prices is the increased use of maize crops (like corn) for animal feed. The continued economic advancement of formerly developing nations (such as China and India) has led to increased meat consumption by the growing middle class. With many farmers finding higher profits in selling grains as animal feed, it further decreases supply.
While both the FAO and the OECD have suggested ways to ease the impending food crisis, prices will likely remain volatile until food stocks have increased. With production remaining flat and supplies being diverted to non-food sources, consumers should brace themselves for continued shock when they enter the grocery store.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: ethanol, food prices, United Nations
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Sunday, June 19th, 2011
Earlier this week, the U.S. Department of Agriculture announced projects that will pay farmers to grow energy crops. States that are a part of this biofuel program include Missouri, Ohio, and Arkansas. The announcement of the Biomass Crop Assistance Project (BCAP) is part of a larger goal of the USDA to promote renewable, affordable energy. One of Tom Vilsack’s major goals since becoming head of the USDA has been to promote funding for ethanol research. This latest announcement furthers the commitment of the USDA to the production of ethanol.
In Missouri, for example, the BCAP is focused on the production of miscanthus, a warm season grass that can produce yields as high as 15 tons per acre. The ethanol project is receiving remarkable bipartisan support. In Missouri, Senators Claire McCaskill (Democrat) and Roy Blunt (Republican) have both announced their support for the project, citing its ability to wean the United States off of foreign oil.
Arkansas politicians have also expressed their support for the project, with Senator Mark Pryor (Democrat) praising Arkansas’ soil and climate as ideal for the production of ethanol producing crops.
The bipartisan support for the BCAP will be important in upcoming months. Given debate over the increasing federal deficits, Congress has recently been looking for ways to trim the budget, with agricultural funding often in their crosshairs. If Republican and Democratic politicians can come together to support ethanol production, then perhaps funding for these USDA projects can be continued.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: biofuel, ethanol, tom vilsack
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Sunday, April 24th, 2011
Christie Vilsack, wife of Secretary of Agriculture Tom Vilsack, is currently considering running for Iowa’s newly redrawn 4th Congressional District in the upcoming 2012 election. The seat, currently held by Republican Steve King, will encompass all of Northwest Iowa.
Christie’s run raises important ethical questions for Secretary Vilsack’s role in a potential election campaign. Tom Vilsack, former Iowa governor and current Secretary of Agriculture, has had an important role in the lives of Iowans and is currently responsible for many of the subsidies that flow to Northwestern Iowa. While Christie Vilsack certainly hopes to capitalize on name-recognition, both he and she must avoid major conflicts of interest. Ethics officers at the USDA have briefed Secretary Vilsack that he must treat his wife like any other candidate, and would be prohibited from using his official title at campaign events.
The scrutiny of the upcoming campaign could potentially complicate Secretary Vilsack’s official duties. With a new Farm Bill under consideration for 2012, Vilsack has stepped up his efforts to promote ethanol and renewable energy sources for agricultural production. In a rally earlier this week, Vilsack expressed his confidence that U.S. corn producers could meet the demand for both ethanol production and livestock feed.
Christie Vilsack has yet to officially declare her candidacy, but if she does, only time will tell what the relationship between Mr. and Mrs. Vilsack will be on the campaign trail.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: Christie Vilsack, ethanol, tom vilsack
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Friday, April 22nd, 2011
Earlier this week, the Department of Agriculture released a report detailing several vital measures needed to increase renewable energy consumption in rural America. Rising fuel prices over the last year have hurt farmers across the country. As fuel prices appear likely to increase, many fear potentially disastrous consequences as the costs of agricultural production continue to rise, forcing many farmers out of business.
Outside of the obvious problems of harvesting crops with diesel powered machinery, high fuel prices have made electrical energy consumption costly for many farmers, particularly small, rural farmers who do not possess their own turbines capable of providing energy to their farms. As such, rural communities and farmers would be better served by a more direct investment in renewable energy technology.
The report identified three major avenues of renewable energy research. The Great Plains have ample wind and biomass resources available. Last week, an ethanol plant specializing in the production of algae used in the creation of biofuels opened, raising optimism for the future of ethanol. Outside of the Great Plains, the East and West coasts both have great potential for wind farms, and the Southwest is ideally located for the production of solar and geothermal energy.
However, these energy sources are largely untapped. High research and investment costs frequently help stifle technological development and investment. However, as the USDA report points out, state and federal investment in these projects could be the deciding factor in the ultimate development of green energy in the agricultural section.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmplusfinancial.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: ethanol, renewable energy, usda
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