R.F.D. NEWS & VIEWS: Farm values enhanced by market turmoil?

By Tim Alexander for Chronicle Media

U.S. Ag Secretary Sonny Perdue (pictured at last year’s Farm Progress Show) announced details of the CARES Act — a.k.a. the federal stimulus package — of benefit to farmers and ranchers effected by the COVID-19 pandemic. (Photo by Tim Alexander)

Our thoughts and actions are dominated by the COVID-19, or novel (as in new) coronavirus pandemic, and its tentacles have intruded into every aspect of daily life, including agriculture. Until further notice, this column will be largely devoted to relaying news of the pandemic’s effect on farming in Illinois and the nation.

But first: I ask you to please keep the families who have been impacted, health-wise, by this deadly virus in the front of your thoughts, prayers and actions. Agriculture will recover, industry will recover, the markets will recover … only human loss should be grieved. That said, here’s the latest news and views for Illinois farmers and rural dwellers …


Trump signs COVID-19 relief act

WASHINGTON, D.C. — Shortly after President Donald Trump signed the CARES Act, or coronavirus stimulus package, into law, the United States Department of Agriculture outlined the benefits for agriculture. According to USDA, the CARES Act contains $9.5 billion in assistance for agricultural producers who “have been impacted by COVID-19,” along with a $14 billion replenishment to the Commodity Credit Corporation. The legislation also contains $100 million in ReConnect grants to expand access to rural broadband for purposes of education, business and healthcare.

“At USDA we will deliver relief assistance to farmers and ranchers as quickly as possible,” said U.S. Agriculture Secretary Sonny Perdue, in a March 27 USDA news release. “Americans across the nation are stepping up to the challenges facing them during these uncertain times. At USDA we are doing our part to ensure those who need help will get it, whether it’s through nutrition assistance, ensuring the food supply chain is safe and secure, or through new flexibilities with our Rural Development loan programs.”


Allendale: Foreign ports closing?

McHENRY — Reports and rumors are trickling in of impending port closures that would impact the export movement of grain originating from the U.S. In their early morning commentary for March 27, Alllendale, Inc. reported that Argentine port workers have asked the government to suspend grain movements and “all operations” in ports for 15 days to help keep workers healthy and slow the virus’ progress.

The speculation over trade disruptions is making traders nervous as they await this week’s highly anticipated USDA Prospective Plantings and Stocks report. Of concern are projections from the International Grains Council for record-breaking world grain production this year. The IGC estimates world corn production at 1.16 billion tons, up from last year’s 1.12 billion tons, and world wheat production up by 5 million tons, to 768 million.

In addition, a Bloomberg poll projects 2020 domestic corn acreage at 94.1 million, soybeans at 85 million, and wheat at 45 million, virtually mirroring USDA’s February Ag Forum numbers. Grain stocks were estimated at 8.1 billion bushels of corn, 2.2 billion bushels of soybeans and 1.4 billion bushels of wheat. The USDA report was to be issued March 31.


Caution: Trucks may carry heavier loads

SPRINGFIELD — The Illinois Pork Producers Association is advising truckers and the public to be aware of temporary waivers to normal truck weight restrictions granted as part of the state’s emergency response to the coronavirus pandemic. These exemptions have now been expanded by the Illinois Department of Transportation to include livestock and feed haulers, as per Gov. J.B. Pritzker’s executive order.

Livestock and feed loads must be limited to no more than 88,000 pounds, or 10 percent above normal maximum vehicle gross weight. The order does not apply to posted bridges and local highways with seasonal or special weight postings, according to the IPPA. Movements are authorized 24/7, except during inclement weather, until further notice. Haulers must verify their route is free of size and weight restrictions by using the www.gettingaroundillinois.com website.


Farm values enhanced by market turmoil?

BLOOMINGTON — Not only have farmland values remained strong during the COVID-19 pandemic, they may add a layer of support to investors. This is according to Bruce Sherrick, director of the University of Illinois TIAA Center for Farmland Research, who offered his observations during the recent Illinois Society of Professional Farm Managers and Rural Appraisers 2020 Land Values Conference, held online.

“Virtually everything we do in our daily lives is driven by decisions surrounding COVID-19. There’s been massive realignment of economic activity and unprecedented stock market volatility,” Sherrick noted. “The spillover is disrupting demand for commodities. It might push additional demand into real assets.”

Farmers remain the top buyer of Illinois farmland, with investors, controlling 35 percent of purchases, coming in second. Reasons for increased investment in farmland include a tight supply, historically low interest rates and a history of returns. In addition, the average return on farmland investment from 2000-19 was 9 percent, compared to 3-6 percent from the stock market, according to Sherrick. (Illinois Farm Bureau news)


COVID-19, flooding presents “double threat”

PEORIA — As if the coronavirus were not enough, Midwest farmers and river dwellers may soon be dealing with major flooding. According to the National Weather Service, major flooding is projected as likely for Illinois and Iowa, with moderate flooding predicted for others along the Mississippi River basin. Flooding is already a reality in Louisiana, where some 50 souls have lost their lives from COVID-19 (as of press time) and all but essential services have shut down.

East Baton Rouge Parish Mayor Sharon Weston-Broome said residents are putting up a fight on two fronts. “One front is the ongoing coronavirus pandemic, and the other is a very active spring flood season. We must address both impacts,” she told nola.com. According to the National Oceanic and Atmospheric Administration, ongoing rainfall, highly saturated soil and an enhanced chance for prolonged spring rainfall adds up to increased chances for flooding across the central U.S., with major flood conditions likely for the upper and middle Mississippi River basins.


Illinois Farm Fact:

95 percent of farmers responding to a University of Illinois webinar poll said that the state of Illinois was doing an adequate job of taking measures to contain COVD-19 — or needs to enact more stringent measures.