Lake County Farm Bureau

The price of farmland across the state of Illinois increased only slightly in the first half of 2010 according to a mid-year ‘snapshot’ survey by the Illinois Society of Professional Farm Managers and Rural Appraisers. The results of the survey were released today at the Farm Progress Show. ISPFMRA conducts a survey half way through the year to obtain general directions on farmland prices and cash rents. This information supplements the Society’s larger efforts at year-end to document farmland prices and cash rents across Illinois. The 2010 mid-year survey also focused on use of variable cash rental arrangements to gain information on this lease type that is growing in use. Below are the key points from the ISPFMRA survey: Respondents indicated that higher quality land values increased slightly during the first half of 2010. For excellent quality farmland, land prices increased by $131 per acre, or 1.7 percent increase. For fair quality farmland, respondents indicated that land values were stable. On July 1, 2010, farmland prices averaged $7,665 for excellent quality farmland, $6,639 for good quality farmland, $5,724 for average quality farmland, and $4,646 for fair quality farmland. Most respondents expect farmland prices to increase during the next 12 months: 16 percent expect farmland prices to increase over 5 percent and 64 percent expect increases between 0 and 5 percent, meaning that 69 percent expect price increases. Fourteen percent of the respondents expect stable prices while 17 percent expect price declines. Most respondents expect corn prices to average between $3.50 and $4.00 for the 2010 crop. Seventy-one percent expect prices between $3.50 and $4.00 while 27 percent expected average prices between $4.00 and $4.50. Respondents expect 2011 rents to average slightly higher than 2010 levels, with excellent quality farmland renting on average for $279/acre, up $7 from this year.

The U.S. Department of Agriculture's Commodity Credit Corporation (CCC) today announced interest rates for September 2010. The CCC borrowing rate-based charge for September 2010 is 0.250 percent, unchanged from 0.250 in August 2010. For 1996 and subsequent crop year commodity and marketing assistance loans, the interest rate for loans disbursed during September 2010 is 1.250 percent, unchanged from 1.250 in August 2010. In accordance with the 2008 Farm Bill, interest rates for Farm Storage Facility Loans approved for September 2010 are as follows, 2.250 percent with seven-year loan terms, down from 2.500 in August 2010, 2.875 percent with 10-year loan terms, down from 3.000 in August 2010, and 3.125 percent with 12-year loan terms, down from 3.375 percent in August 2010.

The crop-damaging drought in Russia (estimated at $1.1 billion in losses) and surrounding nations could boost U.S. grain prices into next year. Mid-year projections released this month by the University of Missouri Food and Agricultural Policy Research Institute (FAPRI) forecast increased exports and higher prices for corn and wheat. Exports between 2009/10 and 2010/11 were projected to grow from 1.98 billion bushels to 2.11 billion bushels for corn and from 881 million bushels to 1.2 billion bushels for wheat. The average price of each crop during the same time was projected to rise from $3.55 to $3.68 per bushel for corn and from $4.87 to $5.10 per bushel for wheat. “Russia and neighboring countries have lowered production estimates and banned (grain) exports,” said Scott Gerlt, FAPRI crop analyst. “There’s going to be a void in the wheat export market.” And that void should continue to be filled by U.S. wheat and corn, which are key ingredients for livestock feed. The increased demand for grain is expected to boost U.S. plantings next year by 2.5 million acres for wheat and 1.2 million acres for corn, according to FAPRI. If realized, larger plantings next year or record corn production this year could put downward pressure on the crop markets, Gerlt noted. The soybean market apparently could feel the burden of record-large plantings this year (78.9 million) combined with a slight drop in exports from a record 1.47 billion in 2009/10 to 1.43 billion in 2010/11. FAPRI projected the average soybean price from 2009/10 to 2010/11 will slip from $9.60 to $9.35 per bushel. The good news for livestock producers is feed prices declined from 2008 peaks and exports have improved this year. Meanwhile, pork production this year is down 2.5 percent and cow numbers have followed a similar trend. “Both supply and demand are moving in the right direction,” said Scott Brown, FAPRI livestock economist. “Reduced supply helps the improved price outlook.” FAPRI projected the average hog price from 2010 to 2011 would increase from $54.59 to $56.39 per hundredweight and fed cattle prices during the same time would jump from an average of $93.50 to $98.50 per hundredweight. A growing dairy herd was projected to keep a lid on milk prices, however. The all-milk price average was projected at $16.56 per hundredweight in 2010 with a slight jump to $17 in 2011.

Exelon Corporation today announced an agreement to acquire John Deere Renewables, a leading operator and developer of wind power, in a transaction that will add 735 operating megawatts of clean, renewable energy to Exelons generation portfolio, as well as an additional 230 megawatts in advanced stages of development. Under the terms of agreement, Exelon will acquire John Deere Renewables 735 megawatts of installed, operating wind capacityenough to power 160,000 to 220,000 householdsspread across 36 projects in eight states. Approximately 75 percent of the operating portfolio is already sold under long-term power purchase arrangements. As part of the acquisition, Exelon also has the opportunity to pursue 1,468 megawatts of new wind projects that are in various stages of development, including the 230 megawatts in advanced stages of development. We expect to see increasing demand for clean, efficient wind power at a national level and in the 29 states that already have a renewable energy standard, Rowe said. This acquisition gives Exelon a strong position in the wind generation business that adds diversity to our generation fleet and provides more options for future growth. Beforetoday's acquisition, Exelon was already the largest wholesale marketer of wind energy east of the Mississippi, with 352 megawatts of wind power capacity from five wind projects in Illinois, Pennsylvania and West Virginia. Exelon Power also owns and operates a 10-megawatt solar plant in Chicago, the largest urban solar plant in the country. Exelon expects to close the transaction with John Deere Renewables in the fourth quarter of 2010.

Just over one-third of the state's' corn crop is rated mature by the Illinois Ag Statistics Service. As of Sunday, 34% of the crop was mature compared with the long-term average of 11%. Sixty-two percent of the corn crop is rated good-excellent, with only 13% rated poor-very poor. Five percent of the soybean crop is now dropping leaves, compared with the long-term average of 3%. Condition of the soybean crop is rated 59% good-excellent, 30% fair and 11% poor-very poor. 62% of the Illinois sorghum crop is coloring, slightly ahead of the five-year average. RFD Radio's Al Jarand has an audio roundup of early harvest around Illinois on FarmWeekNow.com.