The Federal Reserve Bank of Kansas City reports that strong farm income propelled farmland values to record highs and strengthened loan portfolios at agricultural banks at the end of 2011. Cropland values across the Corn Belt and northern Plains soared to all-time highs with many states posting annual value gains between 20 and 40 percent.

In addition, ranchland values rose sharply compared to last year as high feed costs boosted demand for prime pasture ground. Even drought-stricken areas of the southern Plains posted modest farmland value gains.

The Kansas City Bank also reports agricultural bank profits improved as borrowers repaid farm debts. In the third quarter, the return on assets at agricultural banks rose further and remained stronger than their banking peers. The share of delinquent farm real estate loans fell, and delinquent non-real estate loan volumes hit their lowest level since 2009. Bankers reported fewer loan renewals and extensions, so the downward trend in delinquency rates will likely continue.

Rising farm incomes boosted liquidity in the farm sector and slowed non-real estate lending in 2011. Agricultural bankers reported soft operating loan demand throughout the year. Meanwhile, commercial banks struggled to maintain market share. According to call report data, farm real estate loan volume at commercial banks for the third quarter was up just 0.6 percent compared to last year. In contrast, third quarter financial statements from the Farm Credit System reported 4.4 percent growth in farm mortgage loan volume year-to-date.

Courtesy: NAFB News

Don Hofstrand – Iowa State University emeritus ag economist says world agriculture has been successful in keeping up with world population growth over the last half of the 20th century.  In fact -Hofstrand says agriculture’s food production has increased faster than population during this time period. And the value of food production has increased rapidly during this period – most of which occurred in the developing countries.

Hofstrand notes that although world agricultural production has increased faster than population growth – resulting in an increase in production per capita – the increases have not been distributed evenly across the globe. Still – 37 out of 70 developing countries are considered food insecure nations. Most are located in Sub-Saharan Africa – the same region that has the highest fertility rate.

Hofstrand adds agriculture’s ability to meet the needs of an additional two-billion people during the first half of the 21st century is an open question. The Food and Agriculture Organization estimates food production will need to increase by 70-percent by 2050.

Courtesy: NAFB News

USDA’s Foreign Agricultural Service’s Global Agricultural Information Network reports that Mexico has become one of our largest and fastest-growing trading partners. The report shows exports of consumer-oriented products to Mexico reached almost 6.5-billion dollars in 2010 – making the country the United States’ third-largest export market. U.S. agricultural and food exports to Mexico have been climbing at an average rate of almost 10-percent per year.

During the first 10 calendar months of 2011 – U.S. exports to Mexico were up 27-percent – while Mexican exports to the United States were up 17-percent from the previous year. At the same time – the U.S. market accounts for 75-percent of all Mexican exports – while the United States provides Mexico with 61-percent of its imports. Fresh fruit and vegetables account for the largest share of Mexican imports to the United States at 42-percent of the total.

According to the GAIN report – in terms of value – beef is America’s top consumer-oriented food export to Mexico. Even without full market access for some products – such as ground beef – in 2010 the U.S. exported 1.64-million metric tons of beef valued at 644-million dollars to the country. The five-year annual growth rate in beef exports to Mexico is 25-percent. Still – poultry tops beef in volume of exports to Mexico – 2.5-million metric tons in 2010 – but at a lower value total of 595-million dollars.

Courtesy: NAFB News

U.S. Trade Representative Ron Kirk has announced important progress with Japan on a range of trade and regulatory issues as well as on new areas of joint cooperation. Working through the U.S.-Japan Economic Harmonization Initiative – Kirk says Japan has improved the business environment and expanded access for a broad range of U.S. goods and services. These goods include agricultural products.

Ambassador Kirk welcomed the progress which – expands job-supporting business and export opportunities for American entrepreneurs, workers, manufacturers and service providers. Kirk says addressing issues of concern and working closely together to advance new areas of cooperation will further deepen the United States’ relationship with Japan – a strong ally and the nation’s fourth largest export market. The EHI – launched in November 2010 – aims to contribute to U.S. economic growth by promoting cooperation to harmonize approaches that facilitate trade, address business climate and individual issues and advance coordination on regional issues of common interest.

Coutesty: NAFB News

USDA’s National Agricultural Statistics Service reports the January 1 Cattle Inventory is down two-percent.  All cattle and calves in the United States totaled 90.8-million head. This is the lowest January 1 inventory since the 88.1-million on hand in 1952. All cows and heifers that have calved were down two-percent, beef cows were down three-percent and milk cows were up one-percent. The 2011 calf crop was estimated at 35.3-million head – down one-percent from 2010.  This is the smallest calf crop since 1950.

Jim Robb – Director of at the Livestock Marketing Information Center in Denver – says the record Texas drought certainly was the game changer.  As feedstuffs were at record-high costs – the herd on a national basis declined. Akshay Jagdale – a New York-based analyst at KeyBanc Capital Markets – says beef processors may have to adjust plant capacity as cattle supplies shrink. He says higher beef prices will boost revenue enough to make up for the rise in costs from shrinking supplies.

Courtesy: NAFB News

Iowa Senator Chuck Grassley has notified the Senate ethics committee regarding questionable contacts by LightSquared concerning Grassley’s interest in the project.  Since last April, Grassley has been reviewing why the Federal Communications Commission rushed approval of the LightSquared project without adequately exploring what turned out to be widespread concerns of interference with the Global Positioning System devices widely used by the military, first responders, aviation, precision agriculture, and consumer navigation.

According to a news release from Grassley’s office, LightSquared made – a questionable contact that intimated benefits for Grassley if he softened his inquiry of government approval of the project. Grassley has written Philip Falcone of Harbinger Capital Partners, expressing concern that two separate incidents implied a desire to have Grassley “pull punches” in his investigation.

The second contact was from someone who intimated that he represented LightSquared in a call to Grassley’s staff.  The individual, Todd Ruelle, hinted that if LightSquared were allowed to proceed, Grassley’s home state of Iowa could get a “call center.” Grassley’s office advised Ruelle not to contact the office further. Grassley said he – won’t be a part of that.

Courtesy: NAFB News

LightSquared is crying foul. Saying tests of its service were “rigged”, the company has called on the National Telecommunications and Information Administration to objectively re-evaluate this initial round of testing and also to evaluate mitigation proposals the company has proposed. LightSquared is charging that the process used to test GPS devices by Air Force Space Command on behalf of the Space-Based Positioning, Navigation, and Timing Executive Committee was rigged by manufacturers of GPS receivers and government end users to produce bogus results.

Jeff Carlisle, LightSquared’s Executive Vice President, Regulatory Affairs and Public Policy; and Geoff Stearn, LightSquared’s Vice President for Spectrum Development; charge the testing was shrouded in secrecy; the testing protocol deliberately focused on obsolete and niche market devices that were least able to withstand potential interference; and the testing standard does not reflect reality.

The company has called on the Federal Communications Commission and the NTIA to conduct the second round of tests on high-precision devices at an independent laboratory to ensure objectivity and transparency. LightSquared has agreed to meet every technical guideline requested by the Federal Aviation Administration, FCC and NTIA and will continue to work in collaboration with the federal government to resolve the GPS interference issues.

Courtesy: NAFB News