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May 5, 2006
"Nationwide, agricultural land prices have fallen 2.8 percent during the last year with prices falling 9.2 percent in the center-west region," reports South American consultant Dr. Michael Cordonnier. "These are broad-based estimates. On a more localized basis, some land values have fallen 40 percent to 50 percent. The declining land prices are very evident in Mato Grosso."
Private Brazilian analysis firm FNP places much of the blame for the decline in farmland values on low soybean prices, but notes setbacks in cotton production also contribute to the decline.
The firm says farmland prices are so low it estimates it will take 10 or more years to climb back to levels last seen in 2004. FNP says the price of farmland in Mato Grosso has fallen from an average of $570 an acre in October 2004 to $276 an acre in January 2006, a 48 percent drop.
"In Mato Grosso, the 'currency' used to purchase land is sacks of soybeans," he explains. "In some areas, land prices have fallen in terms of both sacks of soybeans and reals. In Sinop, in central Mato Grosso, during the euphoric harvest of 2004-05, a hectare of good land in a good location sold for 250 sacks of soybeans that were selling for 35 reals a sack. In dollar terms, the land sold for $1,350 per acre. Today, that same hectare is selling for 125 sacks of soybeans at 20 reals, or $460 per acre."
Along with the problems farms face due to falling soybean profits and land values, many Brazilian growers now worry about American and Australian investors buying up available land.
Source: LandOwner: April 20, 2006; Vol. 27, Issue 8
It's official: Step 2 cotton
program to end August 1
The Agriculture Department has made it formal that the Step 2 cotton subsidy program will end as of Aug. 1. Formal notice was published in the Federal Register.
The Step 2 program compensated domestic cotton users that purchased U.S. cotton when domestic cotton was priced higher than world prices, and it also allowed payments to exporters to make U.S. cotton competitive with world cotton.
The World Trade Organization declared the program illegal under WTO trade rules.
Source: AFBF; Executive Newswatch; April 20, 2006
Americans going
crazy over spinach
Five times more fresh spinach is being consumed by Americans today than in the 1970s.
Spinach consumption was quite high in the 1950s, but it was canned spinach which hardly anyone eats today. Per capita consumption of spinach as of 2004 was 2.4 pounds a year compared to less than half a pound in 1975.
The relatively new marketing of "baby spinach" and plastic-bag-packaged spinach are two of the main drivers for more consumption.
Source: AFBF; Executive Newswatch; April 14, 2006
Company sees future in goat's milk
A new 3,000-acre Belize operation and a 1,200-acre Oklahoma facility will allow Blue Diamond Ventures, Inc. to market goat products to U.S. consumers.
The acreage will be used for goat ranching, a research center and new processing facilities. The company last week announced it will construct a new creamery for pasteurizing goat milk and producing cheese products. The second phase of new construction will include a goat-fiber facility for mohair and cashmere.
The company said that goat milk, milk and cheese are the world's most-eaten animal products. The company plans to establish wide distribution of its products in the United States, Mexico, Central America and the Caribbean. Local farmers will be recruited into the company's business plan as cooperative goat producers.
Source: AFBF; Executive Newswatch; April 12, 2006
Carbon credit trading
grows one step closer
Selling your carbon credits is a step closer now that the U.S. Department of Energy has revised the guidelines for the Voluntary Greenhouse Gas Reporting Program, known as 1605(b).
This program enables farmers and landowners to estimate, report and register greenhouse gas reductions and carbon sequestration achieved by their farming practices.
In time, these carbon sequestration credits will be saleable in the open market, purchased by firms who are net contributors to global warming and must either stop, or show enough purchased "credits," to be environmentally neutral.
Source: Doane's Agricultural Report; April 21, 2006; Vol. 69, No. 16-1
