The latest farmland survey by the Iowa State University Extension department showed a third straight year where land values dropped. Some people are worried the quarter-point increase in the interest rate announced Wednesday by the Federal Reserve could hurt land values even more. Economist Wendong Zhang conducts the I-S-U survey and says interest rates are an important part of land values. “Land value can be thought of simply as net income divided by interest rates. So when interest rates rise, land values tend to fall down,” Zhang says.

But Zhang says this increase shouldn’t have much impact. “What we are talking about will be a shift from an historically low environment to a low interest rate environment. So, it will have some impact, but probably not as much as some people are worried about,” He says.

The use of ethanol and its impact on corn prices led to an increase in farm land prices that saw them peak in 2013. But Zhang says the impact of ethanol on land prices is not as strong as it once was. “Comparing the current and future growth to what we experienced in the late 2000’s, the growth is much slower,” Zhang says. “Back in the 2000’s ethanol had been one of the primary factors in driving up the corn prices. I don’t think the factor is that strong (now) — at least compared to a few years ago.”

Zhang expects the drop in land prices to slow and eventually turn around, but he says it could take a few years.

(Radio Iowa)

(Update 12:10-p.m.: Resolution of Intent approved)

The Cass County Board of Supervisors today approved a Resolution of Intent to enter into an agreement with Elite Octane, LLC, with regard to the proposed ethanol plant for the northern side of Atlantic. The action follows a public hearing held in the courtroom at the Cass County Courthouse, during which mostly favorable support was heard.

During the hearing Board Chair Gaylord Schelling said from the County’s perspective the process of working with lawyers and ethanol plant officials, was a “Learning curve.”

(He said both sides had to come to terms on an agreement they could live with. Initially, Elite Octane wanted money up front, but the Board couldn’t agree with that. A TIF District was set up, with the tax amounting to about $900,000, depending on the levy. The agreement would mean Elite with rebate 50% back to the County to pay off the TIF.)

The TIF (Tax Increment Financing) is there to help the County pay off the infrastructure the plant needs (Gray water supply, a paved road from Echo to Olive Street. The funds are also to be used for Attorney’s fees to set up the agreement. Other facets of the agreement would include a guarantee to the County of payment in the event of a catastrophe.

Cass County Auditor Dale Sunderman explained the TIF will only work if there is a minimum assessment, which the Development Agreement would stipulate is $32-million dollars.

The property is currently assessed at approximately $1.5-million, which means a guaranteed assessment of $33.5-million. The agreement is 50-50, which means it would guarantee $900,000 per year in taxes would be paid by the company to the County for the infrastructure improvements and debt service, regardless of whether the plant fails or succeeds. The investors would be on the hook to pay those funds.

Developer Don Sonntag said in addition to the promised jobs and tax benefit to the County, Atlantic Community Development, LLC has purchased 14 acres of land from CADCO on the south side of the highway near the plant, for manufacturing space and valuable added-commodities. An announcement on more specifics will come in the next week or so. Cass County Supervisor Mark Wedemeyer said they have spoken with other counties with an ethanol plant, and the deal Cass County was working out with Elite Octane, was incomparable, because of the scope of the agreement.

The County can also hope to recoup some of the infrastructure costs at the onset, through a RISE (Revitalize Iowa’s Sound Economy) grant.

Here is the Resolution of Intent:

RESOLUTION NO. 2016-040  Resolution expressing intent to provide economic development support to the Elite Octane, LLC ethanol plant development project

WHEREAS, Elite Octane, LLC (the “Company”) has undertaken the development of  an ethanol plant (the “Project”) on certain real property (the “Property”) described on Exhibit A hereto and proposed to be situated in the Amaizing Energy Urban Renewal Area (the “Urban Renewal Area”) in Cass County, Iowa (the “County”); and

WHEREAS, the Company has requested that the County provide financial support to help to defray the costs of the Project, through a series of incremental property tax payments (the “Payments”) to be derived from the Property for a period of fifteen (15) years; and

WHEREAS, the Company has requested that the County undertake the planning, design and construction of certain road and grey water sewer system improvements (the “Public Improvements Project”) necessary for the development of the Project; and

WHEREAS, the County intends to support the Company in the undertaking of the Project by entering into a development agreement (the “Development Agreement”) and making provision for the funding of the Payments; and

WHEREAS, the Board of Supervisors will need to undertake the statutory processes for (1) approving the support to the Company and including the entirety of the Property under the plan for the Urban Renewal Area, (2) authorizing the Development Agreement and the Payments; (3) undertaking the contract bid letting process set forth in Chapter 26 of the Code of Iowa for the award of construction contracts for the Public Improvements Project; and (4) authorizing the issuance of General Obligation Bonds (the “Bonds”) in order to pay the costs of constructing the Public Improvements Project; and

WHEREAS, the County now desires to convey its intent to pursue these actions to the Company in order to facilitate progress on the development of the Property through the adoption of this Resolution;

NOW, THEREFORE, Be It Resolved by the Board of Supervisors of Cass County, Iowa, as follows:

Section 1. The County hereby expresses its intent to support the Project in the future.  The County will in good faith negotiate the Development Agreement with respect to the development of the Property and the undertaking of the Project, such proposed agreement to minimally include the following terms:

1. A) The Company will commit to constructing the Project on the Property; and
2. B) The Company will agree to maintain ownership of the Property and operate the ethanol plant thereon during the term of the Development Agreement; and
3. C) The Company will commit to timely payment of all property taxes as they come due with respect to the Property; and
4. D) The Company will enter into a minimum assessment agreement pursuant to Section 403.6 of the Code of Iowa establishing a minimum increased assessed valuation for the Property of $32,000,000 resulting from the Property; and
5. E) The Development Agreement will establish a minimum amount of annual incremental property tax revenues to be received by the County for the payment of debt service on the Bonds.  To the extent that the incremental property tax revenues derived from the Property are not sufficient for the County to pay the debt service requirements on the Bonds, the Company will agree to make payments in lieu of property taxes (the “PILOTS”) to the County to make up for any shortfalls in this annual minimum.  The Developer will provide a subordinate mortgage in the Property and/or such other reasonable assets as security on the PILOTS; and
6. F) The County will agree to fund the Payments over a period of fifteen (15) years of incremental property tax collections.  The Payments will be funded with incremental property tax revenues to be derived from the Property, and each payment will be in an amount which represents 50% of the incremental property tax revenues available to the County on the first $32,000,000 of incremental value with respect to the Property during the six months immediately preceding each Payment date.  In addition, in the event that the assessed valuation of the Project exceeds $32,000,000, the County will agree to fund Payments to the Company in an amount which represents 100% of the incremental property tax revenues available to the County with respect the portion of taxable incremental value in excess of $32,000,000; and
7. G) The County will cause the planning, design and construction of the Public Improvements Project, and the County will undertake the contract bid letting process set forth in Chapter 26 of the Code of Iowa for the award of construction contracts for the Public Improvements Project.  Further the County will issue the Bonds in order to pay the costs of the Public Improvements Project.

Section 2. The County hereby agrees to use its best efforts to complete the statutory requirements of Chapter 403 of the Code of Iowa in order to amend its urban renewal plan and to authorize the Development Agreement.  Both the County and the Company acknowledge that the County’s commitment in this Section is merely a present statement of intent and that the Board of Supervisors must exercise their ordinary political discretion in the completion of the statutory processes referenced herein.  The County will not be held liable in the event that the Board of Supervisors, through the exercise of their ordinary political discretion, determines to not approve any of the actions outlined herein.

Section 3. Nothing in this Resolution shall prevent the parties from negotiating additional terms, not set forth herein, for inclusion in the Development Agreement.

Section 4. All resolutions and orders or parts thereof in conflict with the provisions of this resolution, to the extent of such conflict, are hereby repealed.

w/Kate Olson.

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The president of a research firm devoted to agriculture says while the number of millennial farmers is small, their impact on farming operations is surprisingly large. Jan Johnson of Millennium Research says producers between the ages of 18 and 34 aren’t always recognized for the important decisions they’re making “Even though they’re young and might actually still have a job off the farm, they’re making a lot of the decisions regarding seed, feed, fertilizer, crop protection, technology and all those sort of day-to-day or seasonal decisions that farmers make,” Johnson says.

With the majority of U.S. farmers over the age of 55, Johnson predicts fewer farmers will control more land. “From the work that we do, which tends to concentrate on commercial-sized operations, we find that farmers under 44 years old tend to control farming operations of almost twice the size of older farmers,” Johnson said.

Johnson’s research also finds “technology adoption” high on the list of priorities for millennial farmers, and most are extremely well-educated.

(Reporting by Mark Dorenkamp, Brownfield Ag News)

The downturn in the agriculture economy continues to impact the state with the latest evidence another drop in the price of farmland in the annual Iowa State University Extension survey. Wendong Zhang conducts the survey. “Essentially a five-point-nine percent decline. It’s the first time that the Iowa farmland values have been declining for three years in a row since the 1980’s farm crisis,” Zhang says.

The average price of an acre of farmland fell to $7,183. The three years of falling prices come after the peak in 2013 when it took $8,713 to buy an acre of land. Zhang says one key factor is driving the downward trend. “Mainly the weak commodity prices, the low corn and soybean prices. And this time the livestock margins are no longer that strong either,” Zhang explains. He says none of the 99 counties were exempt from the drop.

“No county saw an increase this time– all counties dropped — ranging from a two percent decline in the southern-central to a nine percent in western-central,” Zhang says. Zhang says the drop in farmland prices will likely slow, but won’t end immediately. “The next year or two we will probably see modest declines at the state level — although we’re already seeing some promising signs that south-central and north-central Iowa, are seeing some growth in land values over the last quarter. So, there might be some bounce back, ” Zhang says. But he says it could take three years for the whole state to turn things back around.

The three-year drop in value causes some to think history might be repeating itself. “A lot of people are now concerned about whether we will see a replay of the 1980s farm crisis,” Zhang says. “I think the probability is probably low.” He says landowners were saw some very good earning years between 2003 and 2013 to help their bottom line, which puts them in better position to handle the latest declines. And he says greater lending restrictions have also kept landowners from getting in over their heads.

“And you have much greater and hopefully stronger coverage from crop insurance. So I think overall the factors are better suited to weather the storm. I think people who are over-leveraged or bought too much machinery, they need to watch the working capita,” Zhang says.

The most expensive farmland was in eastern Iowa’s Scott County at $10,335 dollars an acre. Two counties in northwest Iowa were right behind, with O’Brien County at $10, 194 dollars and Sioux County at $10,066 dollars an acre. The least expensive farmland was in Decatur County in south-central Iowa at $3,443 dollars.

Find out more at: www.card.iastate.edu/farmland/

(Radio Iowa)

WATERLOO, Iowa (AP) – A John Deere plant in Waterloo is celebrating the milestone of building 2 million engines. The Waterloo-Cedar Falls Courier reports the plant built engine number 2 million last month and marked the achievement Monday as it completed the assembly of a tractor powered by the engine. Deere’s Waterloo engine plant began production 40 years ago.

Kenny Hager, a Cedar Falls resident who has worked at Deere for 20 years, says the milestone is as important to his union, the United Auto Workers Local 838, as it is to the company. Hager called it “a really neat thing, because it’s big for the community.”

The Cass County Extension office is reminding commercial pesticide applicators that this week is the deadline to call to make sure they can view their required continuing instructional courses (C-CICs) by the end of the year. Cass County Extension is once again hosting these required trainings for local commercial pesticide applicators, but wants to remind anyone who has yet to attend the training that all CIC training must be completed by the end of December. To avoid conflicts with year-end scheduling, Cass County Extension is requiring that all training dates be on the schedule by Thursday, December 15^th in order to be honored.

“We know year end is a busy time for all, but we don’t want anyone to miss the opportunity to attend their annual required training, as time to meet those annual requirements is getting short.” shared Kate Olson, Extension Program Coordinator in Cass County. “We do offer trainings on a first-come, first-served basis, and our hours will be slightly different during the holidays, so we’d like to remind folks to call and get their classes scheduled before our year-end calendar fills up!”

According to Olson, reshow dates can occur after December 15^th, but they must be on the calendar before then to be honored. To ensure a spot on the training schedule, applicators needing to complete CIC for the year are asked to call prior to December 15^th. Applicators calling after this date will NOT be placed on the training schedule. Training dates can be scheduled locally by calling the Cass County Extension office at 712-243-1132 or emailing lander@iastate.edu. For more information on the Commercial Pesticide Applicator program or the CIC classes, please visit www.extension.iastate.edu/psep/ComAp.html. If you plan to attend the training in a different county Extension Office, please call ahead, and do so as soon as possible, because many other counties in the area have similar cut-off dates, but these will vary by office.

Sales of farm equipment have been lagging for the past couple of years, but there seems to be a bit more optimism heading into 2017. Tom Junge of the Iowa-Nebraska Equipment Dealers Association says this fall’s record or near-record crop yields have improved the outlook. “Generally, there’s some optimism that maybe we’ve hit our low and we’re going to be bouncing back,” Junge said. “There has been some good activity after harvest because a lot of people had better-than-expected crops. So the bushels are going to help offset some of the lower commodity prices.”

Equipment dealer Steve Kayton, with Nebraska Equipment Inc. of Seward, Nebraska, says sales of big ticket items are still slow. “It seems like anything under $50,000, we’re getting a lot of interest in. But once you get over that 50-thousand dollar mark, people are kind of thinking about it,” Kayton said.

One of the challenges for dealers is the large number of equipment auctions in the country, according to Kayton. “There are so many auctions out there. People come in (to a dealership) and price a lot of things, but then they wait for that auction,” Kayton said. “It’s tough to compete against the auctions.”

But Kayton says their parts and service business has been excellent. Junge and Kayton made their comments at last week’s Nebraska Power Farming Show in Lincoln.

(Reporting by Ken Anderson, Brownfield Ag News)

Licenses will soon go on sale for one of the more unique animals you can fish for in Iowa. D-N-R fisheries biologist, Ryan Hupfeld says the licenses for the Missouri and Big Sioux River paddlefish seasons go on sale December 15th. “Each angler can receive one paddlefish license and tag. There’s 950 resident tags available and 50 non-residents available,” Hupfeld days.

The season opens March 1st and runs through April 15th. The paddlefish season was closed in 1986 after the numbers got to low, but was reopened in 2015 when surveys found the fish population had increased. Hupfeld says they have size limits that help protect the population. He says the 35 to 45 inch limit protects the primary breeding fish, so he says the season does not have a negative impact on the population.

You can’t just put a worm on a hook and drop it in to catch a paddlefish. “They feed on plankton…so you have to use a snagging hook to do that. So, it can be more difficult, ” Hupfeld says. “If the water temperature is colder they may be stacked in these overwintering holes, so you may be able to target them in those areas and have more success.”

He says most of the people who get Iowa licenses to snag the paddlefish come from Iowa and Nebraska, with some from the Dakotas. They usually eat their catch. “They’re a very good fish to eat, very healthy, it’s a white flesh,” Hupfeld. He says one thing you need to do to prepare the fish is remove the red meat from their along their skin that is there to help them migrate. “If you remove that red meat it kind of removes the fishy or pungent taste. So, be sure to remove the red meat and they are very good to eat.”

Hupfeld expects good conditions when the season opens. He says the river system is fairly low right now and the Corps may release some more water, but that would only raise the levels to near normal. Hupfeld is in his first year of managing the paddlefish and is excited by the opportunity. “It’s a very unusual looking fish — a prehistoric fish — it’s a very neat fish to study and work on and to catch as an angler,” Hupfeld says.

The paddlefish have a long flat paddle on their front. You can get a license for paddlefishing through the Iowa Department of Natural Resources. The licenses will be sold from December 15th through January 31st.

(Radio Iowa)

The Iowa Department of Agriculture has confirmed that the vote to institute a state beef checkoff passed with 56 percent of producers voting in favor. Iowa Cattlemen’s Association president Phil Reemtsma, says they did a lot of work to explain the referendum to producers. “I’ve always said a successful referendum for the I-C-A is one where we have a lot of participation and then let the people decide the outcome, “Reemtsma says. “Obviously I’m happy with the outcome as well. I believe we did our job in getting it to a vote and trying to get the word out there as best we can.”

Beginning on March 1st of 2017, producers will pay the 50 cent checkoff for every head of cattle sold. “The work is really just beginning. Now it’s the Iowa Beef Industry Council’s responsibility and job to oversee the fund and make sure that those funds are utilized correctly according to what the producers would like to see happen,” Reemtsma says.

There’s been a national effort to promote beef for many years, but Reemtsma says they felt the need to do something in Iowa. He says will be run through the Iowa Treasury and then back to the Iowa Beef Industry Council and will be a separate fund from that national fund and give them more flexibility in using it. “And that’s one of the benefits of a state fund, we have a little more flexibility in how we spend those dollars,” Reemtsma says.

He says it will be state dollars helping promote the industry, and he says it could also have some impact on the choices for those who eat beef. “There may be opportunities for us to develop new products that the consumer wants and the consumer needs within beef,” according to Reemtsma. “And so we are always looking at trying to enhance the marketing to our consumers and having some additional funding to bring new products to the market that they may want is always beneficial.”

Reemtsma says anything the checkoff dollars can do to support the industry is important. “The cattle industry in the last 18 months has been through quite a roller coaster — from record highs in 2014 to record lows in ’15 and part of ’16,” Reemtsma says, “so we have to view this as a long-term investment in our industry. We are hopeful that the funding will help us in Iowa stay in business.”

The checkoff referendum was the last big item on Reemstra’s list of things to do as his term as I-C-A president comes to an end. He runs a cattle operation in Dewitt in eastern Iowa.

(Radio Iowa)