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April 6, 2001

Section 23.53, Property Tax Code, requires CADs to use a cap rate that is the greater of either 10 percent or the interest rate charged on the previous Dec. 31 by the Farm Credit Bank of Texas, plus 2.5 percent. The bank's interest rate on Dec. 31, 2000, was 8.35 percent. With the 2.5 percent added, that rate became 10.85 percent.

In recent years, the cap rate has ranged from a low of 10 percent in 1994 and 1999 to a high of 14 percent during the 1980s.

Qualified agricultural land is taxed on its productivity value. To determine that value, CADs first must calculate the typical property owner's income that is generated by the land after certain expenses have been paid, commonly know as net-to-land. The Property Tax Code then requires the CADs to divide the average net-to-land for a five-year period by the annual cap rate to arrive at the land's productivity value.

The cap rate may change annually. When the net-to-land remains the same but the cap rate decreases, the result is a higher productivity value on the land. If the local tax rates remain the same or increase, property owners will pay higher taxes.

When the net-to-land remains the same, but the cap rate increases, property owners will witness a decline in their land's productivity value and pay lower taxes if the tax rates stay the same.

The cap rate is just one of the many factors used to appraise agricultural land in Texas. Other factors also can affect the final productivity values.

The 2001 capitalization rate for timberland appraisal also is 10.85 percent, down from 10.9 percent in 2000.

Property Tax Code Section 23.74 sets out the requirement for the timberland cap rate and does not include a 10-percent floor like the agricultural land rate.
Source: Statement, Feb. 2001, Texas Comptroller Carole Keeton Rylander

McDonald's issues 'mad cow' vow
McDonald's Corp. plans to enforce federal regulations meant to keep the U.S. beef supply free of "mad cow" disease.

It has given packers until April 1 to document that the cattle they buy were fed according to federal rules. McDonald's says it intends to audit beef processors to ensure they have the required records.
Source: Doane's Agricultural Report, March 16, 2001

Know the facts on ammonium nitrate imports
Ammonium nitrate is a specialty nitrogen fertilizer that serves a niche market and is not as widely used in the United States as other nitrogen fertilizers such as urea and ammonia.

The trade "restrictions" on ammonium nitrate apply only to ammonium nitrate from Russia and Ukraine, two countries which have not traditionally exported ammonium nitrate to the U.S. market.

Canada and the Netherlands have both traditionally supplied substantial quantities to the U.S., and other countries such as Egypt, Spain, and Lithuania have also shipped ammonium nitrate to the United States in recent years. There are no duties, limits or any "restrictions" on ammonium nitrate imports from these countries or any others.

In fact, the current "restrictions" on Russian and Ukrainian material do not really prohibit imports but they do set a minimum price based on the U.S. market price.
Source: AFBF Public Policy, Bureau of Census Import Statistics

Ag exports jump, finally
The $51.6 billion of U.S. agricultural exports in calendar year 2000 is $3.1 billion more than in 1999, a 6.4 percent jump.

This increase broke the three-year string of annual declines starting in 1997. U.S. agricultural imports in 2000, on the other hand, were $39 billion, up nearly $1.3 billion from 1999. As a result, the corresponding trade surplus climbed to $12.6 billion from $10.8 billion in 1999. However, this surplus is less than half of 1996's record $26.9 billion.
Source: U.S. Agricultural Trade Update, Feb. 28, 2001

USDA grants $1.8 million to promote lamb
A campaign to renew demand for lamb will be funded by a $1.8 million grant from USDA.

The American Sheep Industry Association's American Lamb Council is developing the campaign in conjunction with the BSMG/Bozell Worldwide agency.
Source: Doane's Agricultural Report, Feb. 16, 2001

National parks in disrepair while Service buys land
The National Park Service is facing a $5 billion repair and maintenance backlog at America's national parks yet continues to spend more money buying new land rather than repairing and maintaining what it already owns. The maintenance backlog is growing at an alarming rate of $500 million a year.

For fiscal year 2000, Congress appropriated $221.2 million for park repairs and a similar amount was budgeted for 2001. By contrast, funding for land acquisition, under the Clinton/Gore administration's "Land's Legacy Initiative," was $371.5 million in fiscal year 2000, and $317.5 million was budgeted for fiscal year 2001. These monies are to be spent on acquiring park service properties, and also to fund open space acquisition projects undertaken by state and local government agencies.
Source: Environment & Climate News, Jan.-Feb. 2001

Catfish sales continue growth
Catfish growers in the 13 selected states had sales of $501 million during 2000, up 2 percent from the previous year. The top four states ( Mississippi, Alabama, Arkansas, and Louisiana) accounted for 96 percent of the U.S. total sales.

The water surface acres being used for catfish production as of Jan.1, 2001, totaled 190,320 acres, up 2 percent from a year earlier.

Farm-raised catfish processed during 2000 totaled 594 million pounds, 1 percent below the 597 million pounds processed in 1999. The average price paid to producers in 2000 was 75.1 cents per pound, 2 percent above the 73.7 cents paid last year.

The 2000 average price received for processed fish was $2.36 per pound, up 1 percent from $2.34 a year ago.
Source: NASS, Fact Finders for Ag, USDA, Feb. 23, 2001

Campaign seeks to renew lamb demand
A campaign to renew demand for lamb will be funded by a $1.8 million grant from USDA. The American Sheep Industry Association's American Lamb Council is developing the campaign in conjunction with the BSMG/Bozell Worldwide agency.
Source: Doane's Agricultural Report, Feb. 16, 2001

Europeans jump to kangaroo meat
Exports of kangaroo meat from Australia to Europe have increased because livestock diseases are forcing consumers in the EU to find alternatives to beef. The Kangaroo Industries Association of Australia expects kangaroo meat sales to Europe to be up 20 percent this year over last.
Source: Doane's Agricultural Report, March 16, 2001

Texas Equipment Corporation sells
The second-largest John Deere dealer in the U.S., Texas Equipment Corporation, will be sold to Freestar Technologies Inc. The company, which operates eight John Deere agricultural equipment dealerships in Texas and New Mexico, will be a wholly owned subsidiary of Freestar.
Source: Doane's Agricultural Report, March 16, 2001

Lifestyle' farms show decline
There are 2.17 million farms in the U.S., according to the most recent USDA data.

Farms declined by 20,000 from 1999 to 2000, the largest annual drop since 1991. Surprisingly, all of the decline was among farms with annual agricultural sales between $1,000 and $10,000. Those are "lifestyle" farms, not commercial ventures. About 1 million farms have sales above $10,000 annually; about 350,000 have sales above $100,000. Numbers of farms in the larger sales categories remained stable last year.
Source: Doane's Agricultural Report, March 2, 2001