A Climate Action Plan in the Works

The climate is undergoing a massive change and this change is not without consequence. Increased risk of severe wildfire, more intense storms, and increased problems from invasive pests are all potentially on the horizon if conservation measures are not implemented to pacify the extreme, ongoing changes.

Fortunately, conservation measures are under heavy discussion.

Recently, President Obama spoke on the issue of climate change and postulated a promising Climate Action Plan intended to effectively reduce carbon pollution, slow down the effects of climate change, and promote a cleaner environment.

Highlights of the Climate Action Plan

  •  New efficiency standards for energy creation
  • Expansion of permits for renewable energy, such as wind and solar, on public lands
  • Support of the creation of biofuel across the country
  • Partnership with the auto industry to design cleaner vehicles, which will save people money

Though the Climate Action Plan provides a step in the right direction, the issue of climate change is one that cannot be easily mended. This is why solid preparation tactics alongside preventative approaches are key.

AgAmerica’s Lending program is prepared to do its part in helping farmers, ranchers, and producers adapt to these new challenges and threats and assist agricultural operations in the creation of innovative changes and solutions to address the issue of climate change. Contact us to gain information on specific farmland financing options to accomplish your conservation strategies. Info@AgAmerica.com or 844-516-8176.

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Cattle Producers: Innovations to Ease Drought Devastation

Cattle producers, especially in Southern regions, were hit pretty hard in 2012 due to extreme drought conditions. Fortunately, many strategies have been implemented to reduce the disastrous impact of drought conditions on cattle production and other agricultural operations.

To save your cattle operation and promote continued success, a grazing management approach must be pursued to help reduce some of the drought risks. Many of the following strategies were developed and put into practice with assistance from the USDA Natural Resources Conservation Service; however, government backed farm loans are not the only viable option. In fact, some cattle operations impacted by drought conditions are outside government assistance program borders. Other cattle producers say that government agricultural loans are too slow or require too much paperwork. That’s where AgAmerica Lending would like to step in and offer farmland financing assistance.

To spare cattle operations from the worst of the drought, the following innovations have proven incredibly effective:

  • Electric fence and pipeline. Add these systems to channel water to new tire tank watering facilities in each of the pastures.
  • New pastures. Create new pastures, so cattle can move around more frequently and freely.
  • Prescribed grazing. Protect soil from erosion and compaction. Improve the quality of the forage by giving it restoration time before it’s grazed again. Enhance water quality by stopping soil from flowing into the water supply. Avoid the expense of costly supplemental forage like hay, which has become even more costly due to drought conditions.
  • Gravity flow systems. Conserve electricity by providing your cattle water via fenced ponds that rely on a gravity flow system to fill multiple tire tank watering facilities.
  • Legumes. Eliminate commercial fertilizer, prevent erosion, improve the abundance of soil water, and supply nutrients like nitrogen. Legumes convert nitrogen gas in the atmosphere into soil nitrogen that plants can digest, meaning manure or commercial fertilizer may be needed in minute quantities or be totally abandoned.

 

To beat the drought elements, it’s paramount to pursue new practices and ideas – to think outside the box. To fully realize these new practices and ideas oftentimes requires the help of an ag lending company like AgAmerica Lending.

Work with AgAmerica Lending to help finance your agricultural land. Choose an agricultural loan that works best for you and that allows you to better implement a conservation plan to successfully get your cattle operation through the drought. Infor@AgAmerica.com or 844-516-8176

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A Solid Ag Loan Option When Interest Rates Rise

Recently, the Federal Reserved (Fed) raised interest rates.

Why?

Higher interest rates are implemented to reduce the speed of economic growth by making borrowing more difficult. In other words, in the Fed’s opinion, the economy was growing “too fast” so they upped the interest rates to brake this rapid growth. Once they assess that this rapid growth has been sufficiently handled, a lowering of interest rates will be implemented to restore steady economic growth.

Until then, these increased interest rates strongly impact variable rate agricultural loans. When interest rates increase, it naturally follows that agricultural landowners are less likely to apply for farm loans, ranch loans, citrus loans, etc. However, agricultural landowners are not without options during periods of elevated interest rates.

Fixed Rate Ag Loans

Fixed rate ag loans are loans where the interest rate does not rise and fall during the fixed rate period of the loan, allowing the borrower to accurately forecast forthcoming payments. Variable rate loans, on the other hand, are directly impacted by interest rates (also called discount rates) and are thus, not easy to predict.

During periods when interest rates are elevated, ag lending companies typically provide a discount to borrowers to fix their interest rate over time, as rates are more likely to fall during the fixed rate period. Conversely, during periods where interest rates are lower, fixed rate agricultural loans are generally higher than variable rates because interest rates are strongly expected to rise during the fixed rate period.

Therefore, in the current economic climate, it definitely makes sense to consider a fixed rate agricultural loan when assessing your farmland financing options.

To learn more about fixed rate agricultural loans and financing agricultural land, please contact us at AgAmerica Lending Info@AgAmerica.com or 844-516-8176.

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Options for Abandoned Citrus Land

Citrus, Florida’s signature crop, has always faced disastrous conditions from freezes to canker. But no disaster has been as devastating to citrus owners as citrus “greening.”

Citrus “greening”, also called huanglongbing or HLB, was detected in 2005 and has since wreaked havoc on the citrus industry in Florida, ruining citrus trees and hurting the state’s economy.

While there is a great deal of research and support going on to tackle the issue of citrus greening, there has not yet surfaced effective measures to stop this crisis. The only solution has been to destroy the trees and clear the groves, thus destroying the disease.

For many citrus owners, this is a less than desirable solution; however, there are options for the land after citrus growing has been abandoned.

For example, bio fuel farming has recently been suggested as an option for South Florida land as an alternative to growing more citrus and sugar cane, though this is in its beginning stages. Others are replanting with the Florida variety of peaches or more recently, macadamia nut trees. The main question that has to be posed is whether or not citrus land with continue to be classified as agricultural land or if it will be converted to non-agricultural uses. Many citrus growers fear that by destroying their citrus groves they will no longer have classified agricultural land and all the tax perks that go along with that classification. This is not the case.

In order to stick to classified agricultural land, citrus owners must contact an FDACS inspector, who examines the property, craft a destruction report and issue an Abandoned Grove Compliance Agreement. Citrus owners must then bring the compliance agreement to the county property appraiser to be issued a greenbelt tax rate for at least two years. Local property appraisers may have further conditions, so inquire with them before beginning the process of clearing the citrus groves.

It’s important to be aware of your options. Please contact us for further assistance on citrus land options or for any questions regarding financing your agricultural land. info@AgAmerica.com

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5 Reasons to Invest in Timberland

Timberland as an asset has become a very lucrative means of profit for many, especially in Southwest regions of the U.S. such as Florida. Timberland holders have a great opportunity to create profit.

Why?

  1. Timberland appreciates in value, just for the fact that its land, but the added value of the timber increases the price per square foot.
  2. Timberland is a continuously appreciating asset that proves to be profitable despite national economic activity.
  3. Timberland can also be leased to sportsmen enthusiasts as hunting property. Hunting leases are a rare commodity and can be negotiated for a profitable cash flow.
  4. Timberland provides profit through its timber value; timber can be cut and sold to sawmills and different companies to produce a number of forest products, such as lumber, plywood, pulp, and paper products.
  5. The risks associated with timberland are minimal (mostly physical risks due to lack of control over the environment i.e. fires, natural disasters, pest, disease outbreaks, etc.)

 

There is no doubt that timberland is a valuable asset. However, before you invest in timberland, it’s important to be aware of the factors affecting forestland valuation. Despite its abundance, timberland has proven to be a complex asset to valuate on a short-term scale. Many underwriters have a difficult time analyzing income taxes and finding an annual value of timberland that accurately depicts the landowner’s true financial status.

The key to understanding and underwriting forestland assets is to understand the strategic way forest landowners and their management teams approach the preparation of their income taxes. The most important factors include: the way in which the property was obtained, the purpose and actual use of the property, and the way in which expenses and income are perceived. This planning strategy is complex and at times can make it difficult to recognize actual and real profits, losses, and expenses over a short period of time. There are tax considerations, cost considerations, and income considerations to determine before the true value of timberland can be assessed.

All these considerations must be reviewed before timberland loans can be approved.

If you have any questions or need additional information on timberland loans and financing, please contact us at info@AgAmerica.com.

Based on a whitepaper by Carolina Hernandez, a Land South analyst.

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Good News for Young/Beginning Farmers

Oftentimes, farm loans are difficult to access for young or beginning farmers. Many agricultural loan programs have proven effective in financing farmland – FSA (Farm Service Agency) loans for example – yet now there is an additional, promising solution.

With the Senate passage of the Farm Bill, also came the potential for a new amendment – the Casey-Harkin-Johanns Microloan Authorization Amendmentthat offers young and beginning farmers up to $35,000 to get their agricultural operation up and running. This amendment has the power to allow young and beginning farmers to get the ball rolling and offers a plan to effectively realize their number one biggest concern: financial capital to start and sustain their farm businesses.

The Casey-Harkin-Johanns Microloan Authorization Amendment offers new and beginning farmers promising potential including:

  • Less heavy paperwork
  • An extended payment period
  • Low-interest farm operating loans for military veterans
  • A quicker turnaround in profit (fingers crossed!)

To be eligible for such government backed farm loan programs you must classify as a beginner or new farmer. To qualify you must:

  • Have not operated a farm or ranch for more than 10 years
  • Not own a farm or ranch greater than 30 percent of the median size farm in the county as described by the most recent Census for Agriculture
  • Meet the farm loan eligibility requirements of the program to which you are applying
  • Heavily participate in the farming operation

The number and types of farmland financing programs vary for new and beginning farmers. It’s good to be aware of your options so you’re able to get the farm loan that’s best for you and your farming operation. Sometimes, however, a government backed loan isn’t going to cut it. If you’re not able to acquire a government backed loan – USDA loans or FSA loans – or if these ag loan programs are not a good fit, contact us to determine a better solution. A part of our focus and concentration is getting beginning farms, ranches, and young producers the agricultural loans they need to get started with their business.

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USDA Urges Farmers to Adapt to Climate Change

It doesn’t always require complicated scientific discourse. Oftentimes, the evidence is obvious. All one has to do is look at the ground to see what’s going on in the wake of climate change. Sure, the changes are gradual – not as easy to detect as say damage from a hurricane or a tornado. Yet, the damage, though covert, is still severe.

According to U.S. Secretary of Agriculture Tom Vilsack, the first way to respond to climate change is to actually address it. Severe weather is repeatedly hitting fields, destroying crops and land. These unfortunate weather patterns are already negatively impacting farmers and will only continue to do so. Vilsack warns that the impact will be drastic.

“You’re going to see crops produced in one area no longer able to be produced,” Vilsack warns. “This problem is not going to go away on its own.”

What exactly is the problem?

According to a February report conducted by the USDA, the following negative phenomena are expected to surface: surging temperature increases and carbon dioxide concentrations, and water unavailability. These changes will not only wreak havoc on crop production; animal production will take a hit as well.

So, what’s the solution for farmers?

There has to be some light in what appears to be a pretty grim situation. Fortunately, there is. In fact, the solution is pretty simple. Adapt. Sure, this adaptive process will take decades to implement. Even if implemented effectively, will it be enough to spare farmers a great loss?

Maybe.

To help deal with what’s bound to occur, the USDA is launching numerous outreach and extension programs to farmers, ranchers and forest landowners. These campaigns will focus on carbon assessment, farmland management, as well as provide new cover-cropping guidelines for growers.

This is improvement; however, the discussion of farmland protection must extend beyond the realm of farming. The focus must be on the entire food system, inviting greater diversity into the crops harvested. Greater diversity translates to less loss. In other words, it is difficult to have a crop that has only one favorable climate. Having a variety of crops that respond differently in the face of severe weather is more ideal because you are more likely to have one (or more) crops brave the elements.

The bottom-line: Farmers cannot continue to do the same old thing. Adaptation is key in order to successfully respond to the inevitable consequences of climate change.

If you’re considering financing farmland, financing agricultural land, or pursuing ranch financing, it’s important to be aware of these impending transformations and, also, be willing to adapt.

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Shocking News: The House Defeats the Farm Bill

The Farm Bill, with all of its promising farm, trade, and conservation programs, was all set to go. The Senate approved it. It was just up to the House to vote in favor. Unfortunately, the result was less than favorable. The result was failure, frustration, and shock. The result was incredibly unfortunate for farmers, consumers, and the country as a whole.

What happened?

Optimism was high until a food stamp amendment was brought to the table. From here, the controversy picked up and the Farm Bill fell apart. The GOP passed an amendment to institute work requirements for food stamps. The massive cuts that were proposed to the $75-billion food stamp program caused Democrats to pull out and strongly reject the Farm Bill. The cuts were steep and Democrats feared that millions of the country’s poor would be pushed out of the program.

Yet, the opposition by the Democrats wasn’t the only reason for the bill’s defeat. There was, Democrats aside, a strong split amongst the Republicans as well.

What happens to the Farm Bill moving forward?

The future of the Farm Bill is uncertain. At this point, it is not looking very promising. It is very much in limbo as the House weighs its options, reassessing the best way to move ahead. Analysts and lobbyists predict that the outcome will simply involve an extension of the farm bill that is currently in place. There is great opposition to this option, so it will be interesting to see what will ultimately unfold.

The hope by supporters, including many agricultural groups, ag lending and banking groups, is that the bill will be re-considered. The hope is that a deal will be reached to revive the bill to provide the farming industry the support and legislation it really needs. Without it, agricultural groups are in a rocky place.

Here’s hoping.

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Farmers Less Expected to Sell Land

A major agricultural shift has recently surfaced; this shift, being that farmers have become less likely to sell their land than they were even a few years ago. This is a surprising shift given that farmers are being offered record prices for their land.

Over the last few decades, farmland has been escaping the hands of farmers and landing into the hands of developers. As farmers have retired, a younger generation of farmers has not stepped in to fulfill farming production leaving a large amount of farmland at the disposal of developers.

Because the value of land has increased astronomically, farmland has become a developer-dominated market. Record land prices and low commodity prices enticed farmers to sell. In many cases there was an urgency to cash in while they could.

This shift resulted in many states enacting farmland protection laws, allowing the state agricultural departments to entice farmers and ranchers with a large chunk of change in exchange for securing their land into agricultural easements, thus warding off urban and suburban development on treasured farmland.

Recently farmers have become less tempted to hand their land over to developers. Many have turned down major lucrative offers. Why? Perhaps it’s the major surge in profits earned by growing commodities (corn, for example), the high profits available to farmers by renting or leasing their farmland to new farmers, and/or the emotional connections to the land.

It’s possible that this shift is only transient (perhaps resulting from the recent spike in commodity prices). Even so, it represents a temporary and positive shift in the agricultural market.

If you are in need of funding as an alternative to selling off your land to developers, AgAmerica Lending can help with an agricultural loan or a short term Ag bridge loan so that you can take advantage of growing commodity prices.

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