Big Picture Agriculture

Kansas City Federal Reserve Bank’s Second Quarter Farmland Price Report Shows Slowing

In the second quarter of 2012, the Kansas City Federal Reserve Bank reports that farmland prices “rose less rapidly” at less than three percent or half the rate of the first quarter. Nebraska continued to lead District annual farmland value gains with cropland prices more than 35 percent above year-ago levels and ranchland values almost 27 percent higher. The wheat crop weighed in as a positive for the District’s farm income, while cattle feedlot operators and hog, dairy, and poultry enterprises struggled with rising feed costs.

Many bankers expect crop incomes to depend on crop insurance this year. After sluggish operating loan demand in the second quarter, rising fuel and feed expenses are expected to increase operating loan demand going forward. Bankers continue to report very healthy borrowing conditions with few nonperforming farm loans.

“Land values have increased in our area mostly due to oil and gas exploration and production putting a lot of money into our economy. Since investment returns are so low right now, people are buying land.” – Western Oklahoma

“Drought has limited irrigation to under half of normal. Mineral leasing has been strong.” – Eastern Colorado

“Oil lease money and crop insurance continue to help prop up the local economy.” – Western Kansas

“Severe drought conditions continue to reduce crop yields and are causing liquidation of livestock. Local sale barns are selling 10 times the number of cattle compared to last year.” – Eastern Wyoming

University of Florida scientist Dr. Kevin Folta tries to explain that GMO technology is not scary to scientists, that activists need to stop thinking that all GMO scientists are working for Monsanto, and he sees a huge potential future benefit from GMO transgenics for feeding more people higher quality food with less environmental impact.

Ken Caldeira (Stanford) wrote “The Great Climate Experiment – How far can we push the planet?” for the September 2012 issue of Scientific American. In my opinion this was an outstanding article and I liked his style of presentation from his huge picture outlook on the amount of carbon which humanity will most likely continue to extract from the Earth’s crust, to the maps, to his comments about food.

“In a high CO2 world, plants can grow more using the same amount of water. … The outlook may be for increased crop productivity overall, with increases in the north exceeding the reductions near the equator. Global warming may not decrease overall food supply, but it may give more to the rich and less to the poor.” (Statement based upon geography.) “Climate change may usher in a world of weeds.”

To learn more of Caldeira’s work on crop yields and climate change in a 2012 study, “Crop yields in a geoengineered climate” by Julia Pongratz, D.B. Lobell, L. Cao & K. Caldeira, follow this link which includes specific crop charts and videos.

High crop prices and unlimited crop insurance subsidies contributed to the loss of more than 23 million acres of grassland, shrub land and wetlands between 2008 and 2011, wiping out habitat that sustains many species of birds and other animals and threatening the diversity of North America’s wildlife, new research by Environmental Working Group and Defenders of Wildlife shows. Of the 23.7 million acres, more than 8.4 million were converted to plant corn, more than 5.6 million to raise soybeans and nearly 5.2 million to grow winter wheat.

What was going on prior to 2008? The USDA tells us that “between 1964 and 2007, cropland used for crops – the acreage devoted to crop production in any year, including cropland harvested, land on which crops failed, and cultivated summer fallow – increased by 11 million acres in the Corn Belt and decreased by a net 11 million acres in the remaining regions.”

This story is no doubt having some effect on land prices rising like they have recently, too.

In addition to the plowing in the U.S., Canada’s wetland laws are weak and today’s high crop prices have led to a lot of plowing there, too. This story is a direct result of our ethanol policy which has driven up commodity prices during the exact time period of this EWG study. Mainstream news needs to catch-up to this big story.

Raj Patel is working together with Steve James on a film titled “Generation Food” about how we will eat in the future. They are traveling the world —to Okinawa, to Cuba, to Cuzco— interviewing and observing what regional growers are doing. They conclude that the real and valuable wisdom about food growing comes from those out working in the fields each day, trying to innovate and problem solve. He calls the indigenous Inca scientists “but people think they’re backward”. He thinks that there is a lot of hope for the future (of food production) even against impossible odds and that it is coming from unlikely places.

Patel’s project is seeking donations. Better, SMARTER ways of growing food, and feeding the world are needed, now. That’s why we’re developing a new documentary, book and multimedia project, called Generation Food. Go here if you’d like to contribute to their movie project which is intended to help share the resilience and wisdom from global food growing communities.