Browse Tag: agriculture

REALTORS® Land Institute Honors 2013 Award Winners

 

farm land

 

Accredited Land Consultants (ALCs) are more than just land professionals, they are the most accomplished, experienced, and highest performing land experts across the country. They specialize in agricultural land, timberland, ranch, and recreational properties, or vacant land for developments. More information.

 

The REALTORS® Land Institute named the award winners for the 2013 Outstanding Chapter of the Year,  the 2013 Excellence in Instruction awards, and the 2013 ALC-to-ALC Networking awards, at the 2014 National Land Conference in Charleston, SC, on March 12-14. The awards are an honor among the REALTORS® Land Institute and prestigious Accredited Land Consultant (ALC) professional community.

 

And The Award For Outstanding Chapter Of The Year Goes To…

 

The Institute recognized the Iowa Chapter #2 of the REALTORS® Land Institute as the recipient of the 2013 Outstanding Chapter of the Year award. This honor recognizes a chapter that has demonstrated excellence and creativity in member retention, education, volunteering, technology, outreach, and collaboration. The Iowa Chapter is known for “doing it all” and “doing it well.”  The award was accepted by Kyle Hansen, ALC, 2013 Chapter President; Terry Pauling, 2014 Chapter President, and Molly Suarez, Chapter Administrator.

 

The Excellence In Instruction Award Goes To…

 

The 2013 Excellence in Instruction awards honored Randy Hertz, ALC Advanced, and Jim Miller, Esq. Both LANDU instructors bring quality, timely, and accurate information to their students. By updating courses and providing up-to-date technology and discussion on current industry laws, they capture the true spirit of businessmen who share and believe in the importance of knowledge and professional development.

 

The ALC-To-ALC Networking Awards Go To….

 

The ALC-to-ALC Networking awards recognized Accredited Land Consultants (ALCs) with the most lucrative peer collaboration during 2013. The deals are a clear indication of increased productivity and business expansion from networking among ALCs. Murray Wise, ALC, and Ben Crosby, ALC, won both the 2013 Largest In-State ALC-to-ALC Transaction by Sales Volume, and the 2013 Largest In-State ALC-to-ALC Transaction by Total Acreage.  The Largest National Referral for an ALC-to-ALC Transaction by Sales Volume was awarded to Randy Hertz, ALC Advanced; Terry Rupp, ALC, and Troy Louwagie, ALC. The final award, the ALC-to-ALC Networking Award for Overall Collaboration, was presented to Ben Crosby, ALC; Squire Smith, ALC; Clay Taylor, ALC; and David Hitchcock, ALC Advanced.

We offer congratulations to the winners and look forward to coming years of top-notch work from the RLI members.

(Photo credit: wangkai)

 

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Is A Farmland Bubble Forming?

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The story so far: the Federal Reserve in Kansas City mid-2013 published that irrigated cropland in its district rose 30% in 2012, while the Chicago Fed reported a 16% increase. Last year’s drought in Iowa last year notwithstanding, farmland prices have nearly doubled since 2009 to an average of $8,296 an acre. Prices in Nebraska, says the Fed, have also doubled during the same period.

There’s a complicated set of factors joining together to drive up farmland prices. Drought, institutional buying, ethanol mandates from the federal government, rising food prices and population concerns are all having their say in a steadily rising price for irrigated cropland. Some are saying the trend is unsustainable and shows all the signs of a classic market bubble. Troublingly, different looks at the market come to similar conclusions about a coming price collapse even if there’s disagreement about cause.

Institutional Players

As Reuters reported recently, a report by The Oakland Institute documents a “global land rush of unprecedented scale” and estimates $10 billion in institutional dollars is chasing the fixed amount of US cropland.  Pension giant TIAA-CREF, Hancock Agricultural Investment Group and UBS Agrivest were singled out as key drivers of a surge in farmland prices.  This financialization of food-producing land is identified as “speculative” by the report.

Generational Turnover And Tight Credit For Small Farmers

Another trend feeding the charge toward institutionalized demand for land is the plight of the young farmer. A 2011 survey published by the National Young Farmers Coalition found that 78% of young farmers cited lack of capital as their biggest challenge.  Depending on off-farm income to make ends meet only further sweetens the deal to a young farmer when an institutional player comes calling to pad its asset holdings.

Biofuel Mandates

In 2005, Congress passed the Energy Policy Act of 2005, setting the stage for later mandates by the Environmental Protection Agency to compel an increase in the production of ethanol, the corn-based fuel. The EPA’s RFS and later RFS2 programs sought to almost quadruple ethanol production. The effect of government policy into land prices is highlighted by one analyst at Seeking Alpha when he points to a spike in land prices that occurred in the 2005 quarter the bill passed.

While that price move explanation seems valid, what’s less clear is any similar ongoing related effect of ethanol mandate on corn-producing land prices in the intervening nine years. As per usual, when it comes to explanations of prices from institutional sources, only some actors get attention. The Wall Street spin evident in the above-linked piece focuses only on Washington and ignores totally the fact or any possible effect of $10 billion Wall Street dollars wading into the market, as well as the plight of the farmer strapped for credit and capital.

Prices Stabilizing For Now

The Fed reports that land prices in late 2013 only gained 3%, but also touched on the farmer’s plight, indicating cash rents (and food exports) were in fact up:

Cash rents, another key indicator of farmland value, were also steady to higher as farmers negotiated contracts in the fourth quarter that will cover the 2014 season, according to the St. Louis Fed. Values were buoyed by a gain in farm incomes in the quarter, including crop insurance payments and much larger harvest supplies even at lower prices.

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In recent years, both crop and farmland prices have set records as the boom in biofuels and food exports fueled demand. But the sharp drop in second-half 2013 grain prices ahead of the record corn harvest had bankers fretting that farmland prices could also plunge.

With land acting as security on most loans to farmers for equipment, and a persistent credit crunch facing farmers quarter after quarter, signs are piling up that the value of mortgaged food-producing land is headed for a slip. When, as WSJ reports, tractor company John Deere revises its farm equipment sales projections to 5% from the 10% thought a year ago, that’s only one of a set of signals that a land boom driven by Wall Street may be coming to a close.