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The United States Department of Agriculture released its Land Values Report last week. Each year USDA reports farmland values as a whole, as well as by use for cropland and pasture. Nationwide farm real estate value, which includes land and buildings, was $2950 per acre, up 8.1% from the year before. For the first time since 2009, pasture land increased at a higher rate than crop land. Average pastureland value across the country was $1300 per acre, up 11.1% from 2013. Average cropland was valued at $4100 per acre, up 7.6% from the previous year.
Farmland in Kentucky was up on average but not as much as the countrywide average. All farmland averaged $3150 per acre, up 4.3%. Cropland and pasture in Kentucky followed the same relative trends as the nation, with cropland up 3.5% to $3550 per acre and pasture up at a slightly higher rate of 5.5% to an average of $2700 per acre.
This change of trend from higher growth in value for cropland to pasture is expected given that crop values have fallen due to last year’s bumper crop and an expectation of another excellent crop this year. Cattle prices meanwhile have gone through the roof as cattle numbers have fallen due to successive years of drought and liquidation of herds in many of the prime cattle areas in the southwest. Where it only takes one good year to replace low supplies of grains after a drought, it takes many years to rebuild cattle numbers. The process of keeping heifers as replacements, breeding them and raising their calves to finished weights is nearly a four year process. We will probably continue to see pasture values increase for a few years as the profitability of cattle raising should stay favorable for a few years.
It’s not just the low cattle numbers that are keeping cattle prices high. USDA also reported monthly beef export volumes. Exports have been up every month this year and are running 4.7% above last year, quite an accomplishment given the increase in prices. One of the good things about exports is that a lot of the products exported are items not commonly used here. This gives higher values per animal slaughtered by creating value for something that otherwise might be wasted. It has been estimated that over $250 of value of each carcass is created through exports.
Grain reports were scheduled to come out yesterday, too late for the deadline for this issue. The importance of this report is it is the first of the year that is based on actual observations of crops in the field. Up until now reports have been based on planting reports and expected yields based on trend line analysis. Traders are expecting USDA to report a record crop yield per acre for corn. While corn acreage is down they still expect a bumper crop that will keep prices low for the next year. Anything in the report that deviates from these expectations could cause a run-up in prices. Since the market already expects a large crop it is unlikely prices would fall much further than current levels.
Traders also expect a good soybean crop. Record acreage was planted this year and a good yield is expected, so we could have a record crop. Stocks of soybeans are very low right now, however, so prices have not fallen as much as would be expected given the expected size of the crop. If USDA significantly increases expected yield, or reduces its expectations for demand for the crop, it is possible to see soybean prices fall further.
The Marion County Farmers Market has expanded its hours and will now be open on Mondays from 3-6 p.m. A wide variety of summer produce is now available, as well as canned items, baked goods and crafts. The market is located in downtown Lebanon on M. L. King Avenue. In addition to the new Monday hours the market will still be open on Wednesdays and Saturdays from 9 a.m. to 2 p.m. The farmers at the market thank all of the shoppers who have made the market a success this year. Thank you for supporting our local farmers!
The next Beekeepers Meeting will be this evening, Wednesday, Aug. 13, 2014 at 6:30 p.m. at the extension office.
The Applied Master Cattleman Course has filled and letters have been sent to farmers accepted into the program. We were able to enroll all who applied. The first session will be Aug. 26 at the Nelson County Extension Office. The second meeting will be the following week, Sept. 2 at the Marion County Extension Office. Both meetings will start at 6 p.m.
The next edition of the Container Gardening Classes will be held Thursday, Sept. 4, 2014 at 5:30 p.m. at the extension office.
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