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New venue welcomes Farmland Forum

After a one-year hiatus, the Chicago Farmers’ Farmland Forum returned on February 10, 2018, in a new location, the Chicago High School for Agricultural Sciences (CHAS) in the Mount Greenwood neighborhood on the Southwest Side of Chicago. As in the past, the event offered an abundance of information and provided ample opportunity for networking.

Exhibitor Tom Tesdal, First Midwest Bank, liked the new site for the Farmland Forum. “The high school is a good location,” said Tom. “We made some good contacts today. I always walk away from these events with either a lead or a referral.”

After enjoying morning refreshments compliments of Compeer Financial (the group sponsored the morning food service and lunch), which included zucchini bread baked by the CHAS students, attendees perused the 22 exhibitors’ booths and walked away with a wide range of information and resources. The main hall of CHAS buzzed with activity as attendees asked exhibitors questions and established links with bank representatives, realtors, a variety of Ag services, credit services, Ag technology specialists, farmland managers, and a non-profit group that provides agricultural assistance to developing countries.

When the speaker sessions got under way, people streamed into classrooms and the library to hear the topic of their choice. A large group listened intently to Mike Morris, Compeer Financial, in the school’s library as he talked about farmland values and trends. “There is not a lot of land on the market now,” said Mike in response to a question regarding the farmland sales market. “There is a steady demand, but a limited supply. As a result, values have been stable. Most of the buyers are farmers looking to add 80-160 acres to their existing operations.”

Discussion ensued regarding factors that contribute to high cash rent agreements for landowners. Audience member Ray Brownfield, owner of Land Pro, a real estate brokerage and farm management company, recommended that landowners pay attention to drainage and install tiles on their farms; ensure that their fields are “highly tillable”; and make use of soil tests to make certain that their land is properly handled.

In response to a question about interest rates’ effect on land values, Mike said that if a “real run-up” occurred, values could slide by 10 percent. “Rising rates would have a dampening effect on values,” he said.

David Oppedahl, senior business economist at the Federal Reserve Bank of Chicago and TCF secretary, drew a large crowd for his presentation on Trends in the Ag Economy. “It is a challenging time for agriculture, but it still looks pretty good,” said David. “Farmers are as indebted today as they were in the 1980s, but they have more assets.”

David noted that some farmers are highly leveraged and, as a result, there have been increases in delinquencies. On the up side, feed costs are decreasing and this is a benefit to animal agriculturists, he added.

He went on to say that there is an increase in loan demand, but the funds available to lend are decreasing. “Repayment issues are cropping up, but it is not nearly as big an issue as it was in the 1980s,” David commented.

Among the points David made in his presentation:

• Interest rates have risen from the very bottom, yet not very much when the 1980s situation is reviewed
• The U.S economy is growing a little faster and the Federal Reserve expects that the target rate for Fed funds could reach three percent by 2020
• Agriculture’s interest rates have been lagging and not rising as fast as the Fed’s target interest rate
• Corn and soybean returns are dropping from their peaks, with soybeans generally more profitable than corn
• Cash rents are stable to lower
• It is important to maintain the nation’s infrastructure so that the U.S. has a competitive advantage as it ships materials to China and around the world
• Finding a niche, or branding a product, will help the farmer grab a bigger share of the food dollar
• The euro has strengthened versus the dollar; the dollar could weaken over the next 10 years, but not dramatically, according to the USDA
  
  

In other sessions, attendees learned about the fine points of beekeeping in an urban setting, the urban farming programs supported by the University of Illinois Extension Service, how data acquired through technology can support farmers in their fields, the research that is supporting the development of regenerative agriculture, solar/wind power, improving soil health and cover crops, and insurance and risk management considerations. It was a full day.

“This is a very sophisticated group,” said presenter Mike Morris, referring to the Chicago Farmers and the Forum attendees. “They know land values and they ask good questions. I enjoy being a speaker because I know I will be asked thoughtful questions.”