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READ the NAFB’s National Ag News for Friday, July 19th

Report: Large Loans Drive Further Increases in Farm Lending

Growth in the average size of farm operating loans boosted agricultural lending in the second quarter of 2019. A Kansas City Federal Reserve Bank report shows the volume of loans increased 11 percent compared with 2018. The pace of growth is the fastest in the second quarter since 2011. Operating loans continues as the majority of non-real estate farm lending and increased 16 percent. Meanwhile, the volume of non-real estate farm loans exceeding $1 million was notably higher than previous years and contributed significantly to the average size of loans. According to the survey data, the volume of new non-real estate loan originations at commercial banks totaled more than $800 million in the second quarter. Large loans also contributed significantly to increased agricultural lending activity at commercial banks in the second half of 2018. The report also says the average duration of farm loans has lengthened. Finally, despite increased pressure from weaker farm finances and recent increases in interest rates, farmland values continued to hold relatively steady.

U.S., Japan, Working Hard Towards Trade Deal

Japan and the U.S. are “working hard” to reach a trade agreement, according to those close to the negotiations. A Japanese official told Reuters this week, “Our team is now working pretty hard, so we are looking forward to some news in the near future.” The U.S. and Japan are reportedly working on a small trade deal involving agriculture and autos. The trade talks between Japan and the U.S. began earlier this year. A deal could be finalized for agreement in September when President Trump will meet with Japan’s prime minister. Industry officials say the deal could offer U.S. farmers new market access in return for a reduction on tariffs for Japanese auto parts. Farmers have pleaded for better access to Japan since Trump removed the U.S. from the Trans-Pacific Partnership, now renamed and in place. The TPP replacement gave other nations a competitive advantage over U.S. farm products, such as pork and beef, giving Japanese buyers incentive to look beyond the U.S. for products.

Lawmakers Continue Questioning Validity of Announced China Purchases

Wisconsin lawmakers continue pressuring the Trump Administration regarding alleged purchases of U.S. ag products by China. Trump said following a meeting with China’s President last month that China would begin buying U.S. ag product. However, those purchases have not begun. Trump expressed disappointment recently in the lack of action. However, lawmakers from Wisconsin question the validity of the claims by Trump. Representative Ron Kind, a Wisconsin Democrat, this week called on Trump administration officials to provide more details. Kind penned a letter to Agriculture Secretary Sonny Perdue and economic advisor Larry Kudlow saying, “farmers deserve to know when they can expect these purchases will happen—if at all.” Officials in China have not confirmed the agreement to make purchases of U.S. ag products. Earlier this week, Kudlow stated that the administration expects that China will soon be announcing “large-scale purchases” but offered no further details. Kind’s letter follows comments from Senate Democrat Tammy Baldwin of Wisconsin who asked the President to stop making false claims regarding the purchases.

Plant-Based Foods Association Reports Industry Growth

Data from the Plant-Based Foods Association shows sales of plant-based foods in the U.S. have grown 11 percent in the past year. The report announced last week says the plant-based market is worth $4.5 billion. The total U.S. retail food market has grown just two percent in dollar sales during the same period. The association says the data proves plant-based foods are a key driver of growth for retailers nationwide. Since April 2017, total plant-based food sales have increased 31 percent. Additionally, plant-based foods unit sales are up 8.5 percent. Association spokesperson Julie Emmit calls plant-based foods “a growth engine” for grocery sales. The leading drivers of plant-based sales continue to be so-called plant-based milks and plant-based dairy such as cheese, yogurt, and ice cream, and plant-based meats. The plant-based meat category is worth more than $800 million, with sales up 10 percent in the past year. The report concludes that plant-based meat now accounts for two percent of retail packaged meat sale.

Deere Announces Registered Apprenticeship Program

A new apprentice program by John Deere gives ag equipment dealers more options to address the shortage of service technicians. Deere announced this week it has received approval from the U.S. Labor Department for its new Registered Apprenticeship Program. The effort will provide dealers with a formalized, on-the-job and technical training plan to help them develop more highly skilled employees. Through participation in the apprenticeship program, dealers formally commit to developing talent in the earn-while-you-learn program. A participating apprentice benefits from structured, on-the-job training in partnership with an experienced mentor. As training progresses, apprentices are rewarded for new skills acquired. At the end of the program, students will receive a nationally recognized journeyworker certificate. The Program complements Deere’s existing Deere Tech Program. Tim Worthington, a customer support manager with John Deere, says the program can “improve a dealer’s productivity and profit potential as employee turnover costs are reduced and employees are retained longer.” Deere says those interested in participating in the program should contact their local dealer.

$400 Million Available in USDA Renewable Energy Loan Guarantees

The Department of Agriculture has more than $400 million available in loans for renewable energy projects. Acting Assistant to the Secretary for Rural Development Joel Baxley is encouraging farmers and rural small businesses to apply for the financing. The funding provides loan guarantees to help rural small businesses lower their energy costs through renewable energy. The funds are available through USDA’s Rural Energy for America Program, known as REAP. Baxley calls the program “an important tool to help strengthen and grow the rural economy.” USDA accepts applications for REAP funding year-round. The funding can be used for renewable energy systems such as anaerobic digesters, biomass, geothermal, hydropower, wind and solar. It also can be used to make energy efficiency improvements to heating, ventilation and cooling systems, including insulation, and lighting and refrigeration. USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. Anyone interested should contact their USDA Rural Development office for additional information.

SOURCE: NAFB News Service


By Tucker Allmer - The BARN

Tucker Allmer & the BARN are members of the National Association of Farm Broadcasting (NAFB), the Colorado FFA Foundation, the Colorado 4H Foundation, the Colorado Farm Show Marketing Committee, 1867 Club Board Member, Denver Ag & Livestock Club Member, the Weld County Fair Board, the Briggsdale FFA Advisory Council, Briggsdale 4H Club Beef Leader & Founder / Coordinator of the Briggsdale Classic Open Jackpot Show.