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Spring Pest Update

John Ball, Forest Health Specialist SD Department of Agriculture, Extension Forester SD Cooperative Extension

How cold is too cold for woody trees and shrubs? While it has been very cold for a longer period then most of us have seen for a while (or wish to see again), it has not been that tough on our plants. Most of our woody plants that we use in the state can tolerate temperatures to -30F or even -40F by mid-winter. Most of the “winter” injury we see in this state is not the result of long periods of very cold temperatures but widely fluctuating temperature in late autumn and late winter. If we have winters where the temperatures warm into the 50s F for a week or so in late winter and then drop to the subzero that is when we see injury. Most of the state it has stayed consistently cold so far this winter so there has been little injury yet, however we still have another month to go. The Black Hills region which has been some wide temperature swings this winter is probably the only place where marginally hardy plants may be experiencing some winter injury.

How about insect pests? The cold winter is not having much of an impact on mountain pine beetle larvae. Our inspections of infested trees a couple of weeks ago found very few dead larvae. The majority appeared very healthy and will no doubt survive this winter to continue their development to adults and emerge in July and August to infest new trees. Emerald ash borer, which has not been found in the state, may have been impacted by the cold that has occurred in much of the northeastern and north central United States. Several days of sustained cold (-20 F) can kill the majority of larvae beneath the bark, however, it may not have been cold enough, long enough to kill many and even if 95 percent of the larvae are killed by the cold, the population can rebound very quickly.

Great Lodging Option In The Heart Of The Glacial Lakes

Visitors to Northeast South Dakota have a great lodging option at Hidden Hill Lodge, located southwest of Eden.

Constructed in 2007, this beautiful lodge is located on 316 acres near superb waterfowl, pheasant, deer and turkey hunting. World class walleye and northern pike lakes are within minutes of the lodge. The property overlooks approximately 150 acres of land under water which we call “Hidden Hill Lake.” This custom built lodge is approximately 5,808 sq ft with vaulted ceilings, 2 fireplaces, 2 full kitchens, 11 bedrooms, 7.5 bathrooms, game room, 2 decks and a hot tub. Many more amenities too numerous to mention. A must see for private, community, or corporate use in a very private and serene setting.

See their website www.hiddenhilllodge.com for more information about lodging options and availability.

OUTDOORS – Hunting Lands Still Worth Investing In

by John Woods  – Published 9/6/13

What is it they say about land? “Better get you some, because they are not going to make any more of it.” Landfills not withstanding. When I talk to hunters of all ages, regardless of the game species they like to pursue, everybody dreams about owning their own place one day.

As it turns out these days, making a long-term investment in land whether to produce a commodity to generate revenue like agricultural land or timber, buying land is one of the smartest investments one can make. If that property also happens to offer recreational values for hunting, fishing, camping or whatever that is added value to the owner.

In fact, most recreational land buyers these days are also shopping for collateral values from the same property. Hunters buy deer hunting land thinking the timber might produce residual value one day. Maybe some row crop land on the place could be leased to a nearby farmer looking for additional soybean acreage. Perhaps a hay field could be utilized to produce high value hay for livestock producers. The options can be endless.

Why Land Makes a Good Investment

According to Jacob Sartain, vice president of Sartains Heritage Properties, LLC of Madison (www.sartainsheritage.com), “Land has been and always will be the best and strongest long-term investment strategy for several reasons. Most all land has the ability to produce some type of commodity such as timber, grain crops, and minerals such as oil, gas, and gravel.”

“All investment strategies end up pointing in the direction of land as the most stable and safest investment when factored on a +/- 30-year investment. Land hedges against inflation and is a hard asset that be borrowed against,” says Sartain.

Sartain advises that land is always a buyer’s market when like now there is high interest in agricultural and commodities property making them very attractive to buyers. Right now these lands can offer a good return on the investment.

“Other types of land investments are the same such as timber investment. Today timber prices are somewhat moderate creating a situation where certain investors are interested in purchasing timber lands because of a reduced value on the timber asset. Buyers know that this will change in the future. By purchasing at the bottom of the curve will allow for capitalization when the prices of timber rise,” Sartain noted.

Meanwhile as the timber continues to mature toward a future harvest, the owners can build a weekend retreat and develop the land for hunting deer, turkey and small game. They can build a lake for fishing with a long dock for watching sunsets. Land ownership presents many opportunities for outdoors family recreation. This becomes even more added value to the long-term land investment.

Levels of Investment

For my money land has never been priced at what one would call “cheap”, but then that is a relative term. When I tell young people today (anybody under the age of 60) that I remember paying 15-cents for a gallon of gasoline, a nickel for a bottle of Coke-A-Cola, and 25-cents for the local movie theatre and that cost included a soft drink and a candy bar, they look at me like I am crazy.

Likewise when I tell folks I paid $275 per acre for hunting land with a mile frontage on the Big Black River, they are sure I am pulling their leg. I’m not. That was back in 1991. Wonder what it is worth today? For sure it is worth a lot more than if I had put that same money into a bank savings account or in a CD at today’s rates.

“Hunting land values today vary across a wide range depending on the area the property is located in and what’s on the property as far as habitat for wildlife. Most all investors when buying hunting land want to be located within an area that consistently produces quality game, whether it is ducks in the Delta or deer in the hills or perhaps a combination of both,” stated Sartain.

“In Mississippi across the board hunting lands can range from a low end value of $1000 per acre to a high end of $3,000 per acre. It is all about quality and location.” Shopping for such recreational lands also means assessing the infrastructure already built into the property. Are there roads, building structures, established food plots, ATV trails, electric power, water and other amenities? Buyers either have to pay for these features up front with the land purchase or spend considerable out-of-pocket dollars to create them.

Bank Lending for Hunting Land

“Lending for land is not as difficult as some may think. There are several options when it comes to financing and there are lots of lenders out there. In today’s market we find a fiscally sound individual can obtain financing around 80/20 or in other words, 20 percent cash invested while financing 80 percent of the amount. Interest rates are very low in the 4-5 percent range with flexible terms out to 30 years (this is as of end of April),” Sartain counsels. Indeed conditions are very favorable these days for land ownership.

In summary, “Land is easy to recognize as a most sound investment. Just look at America’s 100 wealthiest individuals and you will find overwhelmingly the majority are invested in land,” Sartain reports.

Sounds like a good time to look into land ownership for outdoors recreation, hunting or just enjoying a get away place of your own. It may well prove to be the best investment you ever made.

Farm Income Expected to Outpace the Prior 10-Year Average

Net farm income is forecasted to be $95.8 billion, $8 billion above the previous 10-year average. Although the expected net farm income is healthy, it is a 26.6% decrease from 2013′s record forecast of $130.5 billion. Production expenses expected to fall for only the second time in the last 10 years.

Income Forecast Remain Above 10-year Watermark

The 2014 forecast of $95.8 billion is the lowest since 2010, but still 8.35% above the prior 10-year average of $87 billion. Net cash income is forecasted at $101.9 billion, down 21.45% from 2013. Net cash income is expected to decline less than net farm income because it reflected the sale of more than $6 billion in carryover stocks from 2013.

Farm Income 1

 

 

 

 

 

 

 

 

 

 

Crop Production Value Struggle to Keep Pace With 2013

Value of crop production in 2014 is expected to decline after large gains in 2013. All major crop categories are expected to be effected as a result. Sales receipts and value inventory changes for corn are expected to fall due to large increases in production, suggesting a significant decline in the average price of corn. US wheat’s annual price is expected to drop because of large global yield forecasts and declines in other feed grain prices which have reduced domestic demand. Soybean receipts and value of production are also expected to be down in 2014 due to an expected 19.3% decline in the annual price. The soybean-to-corn-calendar-year price ratio is predicted to be 2.7, suggesting that farmers will shift a considerable number of acres to soybeans in 2014.

Farm Income 2

 

 

 

 

 

 

 

 

 

 

Production Expenses Expected to Fall

Production expenses are expected to fall in 2014 for the first time since 2009. Though expenses remain well above what they were in 2012, the decline interrupts what has been a rapid upward movement in expenses increasing 84% in the last 10 years. The three major crop expenses are seeds, fertilizer, and pesticides, are expected to fall a combined $2.9 billion or 4.7%. Fertilizer was the driving force behind the decline. Expected expenses for fertilizer use in 2014 fell $3.1 billion or 12%.

Outlook

Farmer income remains healthy moving into the 2014 planting season, even amid drastic reductions in crop prices. The volatility of demand and weather play a key role in the development of a crop year, making it difficult to forecast. The USDA makes their forecasts based off of optimal weather conditions; over the past two years, the U.S. has experienced anything but optimal weather.

Posted by http://farmlandforecast.colvin-co.com on February 12, 2014.

10 Factors That Drive Farmland Value

 

Here are the big-picture issues that affect the worth of your farm.

Soil type, drainage and location all play into the dollar value of your farmland. But as the agricultural industry becomes more global, so do the factors impacting your farm.

“In agricultural economics, a lot of issues are linked together,” says David Kohl, professor emeritus of agricultural economics at Virginia Tech. “Sometimes you have to take step back, think strategically and connect the dots.”

“People have an intuitive sense of what their land is worth,” says Tim Hopper, chief economist at TIAA-CREF, a financial services and investing organization. Yet to stay ahead of the curve, he says, farmers should think beyond their farm gates. Here is some food for thought on the macro issues that affect your farm’s value.

1. Global population growth 

The world’s population is forecast to reach 9 billion by 2050. While that is a significant increase from the current 7 billion people, Hopper says the key issue is population distribution.

“The areas of the world that have growing populations and caloric needs also have increasing incomes,” he says. But in many of those places, agriculture cannot expand to meet this growing demand. Therefore, productive land in other areas of the world increases in value.

2. Water

Like population, water is not dispersed evenly around the world. Hopper says trade allows us to move products from where we have water to where we need water. “Trade in crops is basically trade in water,” he says.

While water issues are more pronounced in other areas of the world, recent prolonged U.S. drought conditions have made water supply a national hot topic. Kohl says water availability, either through irrigation or drainage, will factor into farmland value. “Top-quality farm ground, with water under it or near it, is a premium,” he says.

3. Wall Street

High farmland returns have attracted the interest of investors, landowners, lenders and operators, adding more competitors at farmland auctions. After 2008, several funds realized a lot of their diversified portfolios weren’t as stable as originally thought, says Bruce Sherrick, University of Illinois professor of agricultural and applied finance.

While Wall Street types like several aspects of the farmland and ag markets, it’s not an easy industry for outsiders. “There’s not a ticker symbol for farmland,” he says. “A parcel of land requires some specific knowledge to operate.” He says farmland investments have historically added return and have reduced risk, though the risk impacts are often more important”.

4. Interest rates

For the past few years, many farmers have been able to purchase land with loans at extremely low interest rates. Long-term, Hopper says interest rates average around 4.5%. Today, he says, interest rates average around 2.5%, and recently they were closer to 1%.

Any major change in monetary policy could alter farmers’ and investors’ attitudes about future land purchases. When considering changes in policy, Kohl likes to factor in the 320/260/60 rule. “Around 320 million people live in America, with 260 million of those living in urban areas,” he says. “Only 60 million are left in rural America. A lot of our economic policy will be based toward the 260, instead of the 60.”

5. Shale energy

Like water, the potential of what’s under your land might become more important than the soil on top. Vast shale plays in many areas of the country are now accessible through horizontal drilling and hydraulic fracturing.

“The shale energy revolution is tremendous in the U.S.,” Hopper says. “The U.S. is now the largest producer of oil and gas in the world. We are still importing, but our trade deficit is starting to shrink.”

6. Foreign exchange rates

A strong U.S. dollar equals more value for U.S. products, but it also means U.S. products are more expensive to foreign buyers. Hopper says since capital is scattered in the world, currency exchange rates greatly impact land values.

A falling dollar equals high commodity prices, which raise farmer profits and increases rent and land values. On the flip side, he says, a rising-dollar environment lessens farmland values.

7. Regulation

Whether dealing with banking, ethanol mandates or animal welfare, regulations are an invisible threat for U.S. farms, Kohl says. As a dairy producer, he has seen how quickly a new rule or regulation can cause major problems – even with his own operation. He says producers must be proactive.

Hopper agrees and says staying up-to-date on U.S. regulations is vital, as they can easily create a domino effect. “There are many countries that take U.S. regulations, put their own stamp on it and enact it into law,” he says.

8. Wine

Why would wine make this list? “I call it the $4.99 box of Gallo revolution,” Hopper says. “Wine consumption in the U.S. is going up about 14% per year, and in the world it is going up about 4% a year.”

Demand drives change and now the U.S. is the largest wine consumer in the world. “This is a tremendous shift that has led to a change in the dynamics of the price of land,” Hopper says. By comparison, he says, an acre of corn valued at $12,000 in the Midwest translates into an acre of grapes valued at $100,000 in the heart of Napa.

Don’t expect to see corn fields converted to grapes any time soon, but when you consider wine is now produced in all 50 states, there is potential. “Land value is determined by the value of what you can produce off that land,” Hopper says.

9. The rise of China

China as a population center, buyer of U.S. goods and global player is top-of-mind for the ag industry. Hopper says one of China’s biggest problems is lack of rainfall. China encompasses 20% of the earth’s population and 7% of the earth’s water resources.

“How do you feed 20% of the world’s population on 7% of the world’s rainfall?” Hopper asks. “You don’t; you import.” He says the country is becoming more urbanized, which equals more food demand and fewer resources to produce food. “Now China is trying to buy areas that can produce food,” he says.

10. Global trade

As incomes around the world have increased, especially in China and other emerging nations, Hopper says trade with the U.S. has also increased. While more demand is positive for ag markets, Hopper says this shift has led to stresses on agriculture. “We’ve seen increased commodity price swings and more volatility,” he says.

Written by Sara Schafer, AgWeb.com Business and Crops Online Editor (December 13, 2013)

HOW TO SURVIVE A LONG DAKOTA WINTER

As all of us residents in South Dakota, North Dakota and probably the whole Midwest and even eastern Seacoast would agree, it feels as though this winter has dragged on and we still have at least 4-8 weeks to go.  If you like being outdoors during the late fall and early winter months and the milder days of the entire winter like I do then I would like to recommend some of the following pictured diversions I have utilized to help moderate the current season:

DEER & PHEASANT HUNTING

Hunting #2Hunting #3Hunting #4Hunting

 

 

 

 

 

 

 

 

 

TRAPPING

Traping #2Traping #3Traping #5Traping #6Traping #7Traping

 

 

 

 

 

 

 

 

 

ICE FISHING

Ice FishingIce Fishing #2

 

 

Land Trends in Central South Dakota

What will be the trend for land in the next couple of years for Central South Dakota? Looking back at the land values the past 5 years will give us some insight as to what to expect in the next 3-5 years.

In central South Dakota, cropland values in 2004 for Sully County land were $550-$650 per acre. In 2009 we saw values climb to just over $1450 per acre. In the latter part of the season of 2013 land values in Sully County were as high as $4000 -$4500 per acre. The land in the Hayes, SD area went from $350-$400 per acre in 2004, to $650-$700 per acre in 2009, and finally settling in at $1600 per acre in 2013. During the latter part of 2013 some cropland brought upwards of $2000 per acre south of Hayes. In the Lyman County area, where pheasant hunters pushed the land to record highs in the 80′s and 90′s was bringing $550-$750 per acre in 2004, $1100 per acre in 2009, and to $2450 and higher in 2013.

Remember from previous posts most of the land market was driven to record highs during this time due to the high commodity prices and high yields in central South Dakota. There was a tremendous amount of cash on hand for the agricultural producer to expand his or her operation. Quality land has tripled in value in the last five years in our market area. Can this trend continue for quality land in central South Dakota?

Several factors will now come into play for our local market. The first factor that will need to be discussed is what impact will $3.50 corn have on the market. Dakota Properties of Pierre saw the commodity price decline influence the farmers at our larger land auctions at the end of the 2013 season. The agricultural community began to make some adjustments in their buying decisions on their purchases. It was a difficult fall harvest for most farmers as weather conditions did not cooperate with drying the fall crop down. Then the price of drying that crop skyrocketed as propane costs increased. As the 2014 cropping season begins, farmers are putting costs of production in place for their grain operation. It appears with average yields, it will be a break even or maybe a loss for the 2014 season. However, for the cattle producer, the price of calves are at record highs and central South Dakota has seen a tremendous increase in rent trends for grassland. We could see a stable market for cropland and a hot market for grassland in 2014.

Another factor that could impact the land market will be interest rates. A slight increase in interest rates for a 20 year mortgage have taken place in the last couple of months. The Feds have announced they will taper down their bond purchase program in 2014. Short term interest rates could stay low, but long term interest rates could begin to climb upward. Added interest expense, adds total dollar increase to the land during the 20 year mortgage time period. In the past 4-5 years the agricultural community has used cash on had to purchase. If they have to go borrow money at higher interest rates which are currently 4%-5%, they will factor that increase into their buying power.  This will impact the land prices as long term interest rates increase.

The factor that could drive some areas of quality land to a slight increase would be the supply and demand. Currently, there is not much land on the market and the inventory is low.  Tough to find a place for sale. During the 2012 season there was ample land on the market due to the threat from the Federal Government that there could be a major change in capital gain taxes. During the 2013 season, land owners continued to offer land for sale, trying to cash in on the record prices.  Now there may be a slight increase for quality grassland that comes available due to the high calf prices and low supply of grassland available for sale.  This trend will be tested with sales in the next few months and the results will chart the path of land values for our area.

Summary of the land trend from my perspective would be that quality land will still be sought after in smaller tracts that will be added onto an operation. The overall market will be stable and not as accelerating as it was the last five years. Real estate sales will still occur but at a lower rate than in 2012 and 2013.  Local producers will use capital to purchase quality tracts to grow their operation, but will be very selective making sure that it makes some economic sense for their operation.  All the above could change if commodity prices spike due to a weather crisis in other world producing areas. Or people flock to land due to the unstable investment world, and put their capital into hard assets such as land, because it is so stable and easy to manage. The investor world sometimes isn’t concerned about return on investment, they are concerned about return of investment. Hard to lose land if it is paid for and is an easy asset to pass onto the next generation without much management costs.

Webster Slough Lures Ice Anglers

aberdeennewsBy Jeff Bahr, Aberdeen American News – January 23, 2014

Some Webster residents don’t have to drive very far to go ice fishing. A handy slough not far from town makes it easy.

How handy is it? On Sunday, kids spent part of the day on the ice with their parents before they were shuttled into town for dance class.

The slough isn’t as busy as some of the big lakes in the Webster area, of course. But there was still plenty of activity. Some of the anglers bring their kids along. In addition to fishing, those kids amuse themselves by sliding around on the ice. A couple of young people went snowmobiling.

The anglers don’t want the name or the location of the slough revealed, because they feel enough people use it now. There’s already “too much pressure” on the body of water, said Toby Oehler, one of the fishermen.

Some of the anglers were sitting out in the open, keeping an eye on the holes they dug in the ice. Others were sitting in pop-up tents, which shield fishermen from the wind. But others were taking advantage of the comforts modern ice houses provide, using power delivered by generators.

Brothers Todd and Chris Vander Linden were using a nice shack owned by their friend, Jason Snell.
“This isn’t really roughing it,” Todd Vander Linden said. The ice shack has a TV, but right now it gets only one channel — South Dakota Public Television. They were watching “The McLaughlin Group,” but it wasn’t because they have a great interest in public affairs. The wood-paneled structure is also equipped with a kitchen stove.

Todd Vander Linden arrived at the slough about noon after doing chores at his farm. He still had jobs awaiting later in the day, but until 4 or 4:30, he planned on relaxing in the ice house, keeping an eye on eight holes drilled into the ice. Sitting in a well-appointed ice house isn’t much different from being in his living room. “A guy gets tired of sitting in the house,” he said.

The Vander Lindens visited the ice house next door, where an NFL playoff game was on the TV. That ice house, built by Ice Castle, is owned by Jason Coester. Sleeping comfortably in a bed was Coester’s young son, Maverick. Coester was visiting with Oehler, his friend.

The fishermen used electronic fish-finding devices to keep an eye on the perch beneath them. The anglers drove right up to their ice fishing positions in their vehicles, most of them pickups.

Some of the fishermen were having luck on Sunday. Several mentioned, though, that the perch were getting all the food they needed from freshwater shrimp in the water.

Oehler and Coester say they like to visit the slough during the middle of the week, to avoid the rush on weekends.

On those days, the number of people on hand isn’t anything like it was on Sunday.

The proximity to Webster makes it easy for young people to hang around. It’s nice that kids can come out and goof around on the ice while their fathers fish, Todd Vander Linden said.

If you’d like to know how the fishing is, you might be able to call the perch directly. Vander Linden reported that two iPhones had accidentally fallen into the water. If you didn’t believe him, he could show you a picture of one of the submerged iPhones on his fish finder.