Progress in Agriculture

 

Ethanol boosts corn prices

dan Swanson

 

The demand for ethanol-blended motor fuel is boosting corn prices and raising speculation over the long-term affects on rural economies.

Otoe County farmers who received $1.64 per bushel for their corn on Nov. 28 last year, received $3.47 on the same date this year. If all of the county’s 12.7 million bushels were sold at the higher price, it would put an additional $23.3 million into farmers’ pockets.

The U.S. Department of Agriculture reports soaring prices across the nation, with last year’s average of $1.80 per bushel climbing to $3.45.

“It’s been a long time coming,” said Steve Zimmers, a University of Nebraska-Lincoln Extension specialist, regarding the surge in corn prices.

Congress passed legislation in 2005 that called for ethanol use in the United States to increase by 3.5 billion gallons by 2012.

After President George Bush called for even greater use of renewable energy in his State of the Union address, Gov. Dave Heineman told the Associated Press that ethanol has the potential to transform America's transportation system.

"Over the next two years, our state will see our ethanol production capacity double to more than 1.2 billion gallons a year, and with the number of potential plants on the horizon, we hope to maintain and enhance our position as a major source for the ethanol produced in this country," Heineman said.

Over 150 plants are planned nationwide, including 20 in Nebraska. A plant planned in Adams is expected to use 18.5 million bushels of corn, about equal to Otoe County’s biggest harvest ever.

Otoe County farmers set a new production record in 2004 with 18.9 million bushels of corn and matched the previous 2001 record of 12.7 million bushels last year.

Zimmers said higher corn prices also impact livestock producers. Rations for hogs are commonly about 80 percent corn.

Former State Sen. Roger Wehrbein said in addition to higher costs for livestock feed, Nebraska’s emerging ethanol industry requires greater water resources.

Agricultural land values increase

SE part of state second highest increase.

LINCOLN, Neb. -- Average agricultural land values in Nebraska took another significant jump in the last year, but a closer look at the University of Nebraska-Lincoln's annual survey reveals significant disparities among regions of the state.

Among other factors, availability of irrigation water clearly is playing a more significant part in farmland values, said Bruce Johnson, the UNL agricultural economist who conducts the annual Nebraska Farm Real Estate Market Survey.

Statewide, Nebraska farmland's average value as of Feb. 1 was $1,013 per acre, up 9.6 percent over last year and up more than 33 percent since 2003's $757 per-acre average, according to preliminary results from the 2006 market survey.

The survey, which divides the state into eight regions, found that changes in land values range from a 15.5 percent increase in northeast Nebraska to a 4.2 percent decrease in the south region.

"In northeast Nebraska, the combination of several years of relatively favorable weather patterns and the positive income effect of a more diverse crop and livestock economy has, no doubt, fueled a spirited bidding environment for land," Johnson said.

"In southern Nebraska, the Republican River water controversy with Kansas has created uncertainty over both immediate and long-term water availability — which, in turn, appears to be the primary explanation of recent cropland value declines," the Institute of Agriculture and Natural Resources researcher added.

"Clearly, water and its availability is becoming a critical variable in many local land markets around the state."

Southeast Nebraska saw the second highest increase in values —12.6 percent.

"In this area, as well as eastern Nebraska, demand for land on the market is robust, with active farmer-buyers and nonfarm investor buyers," Johnson said.

Other changes include: northwest, 7.4 percent increase; north, 12.1 percent increase; southwest, 5.4 percent increase; central, 8.1 percent increase; and east, 10.1 percent increase.

Ag success boosts town economy

david Swanson

Syracuse is called the Agricultural Center of Southeast Nebraska, and, perhaps more than any other area community, feels the effects of swings in the agricultural economy.

With three implement dealers, other ag-related businesses and several agricultural offices, such as the University of Nebraska-Lincoln (UNL) Cooperative Extension Service and the U.S. Department of Agriculture Service Center, Syracuse feels the heartbeat of the farming economy.

Several representatives of Syracuse businesses said that the improved agricultural economy is benefitting the community.

Glenna Bohling, 2007 Syracuse Area Chamber of Commerce president, said that Syracuse is primarily an agricultural community, even though many residents commute to Omaha and Lincoln for employment.

Bob Brandt of Countryside Bank said that Syracuse is fortunate to be at a good location, at the intersection of Highways 2 and 50 and close to Lincoln.

Brandt said that the key to the area economy is businesspeople being able to adapt to change and maintaining a market share.

“It’s a challenge. A lot of people are moving into the area. We need to make them aware of what products we have,” Brandt said.

Brandt said that because everyone lives such a fast-paced life, people need to know that they can buy what they need at home rather than shopping out of town. In many cases, what everyone needs is just as inexpensive or less expensive, Brandt said.

Kim Kirchhoff of Syracuse Do It Best said that the Syracuse economy is doing all right.

“We’re doing good. The businesses are doing good,” Kirchhoff said.

While Syracuse is a bedroom community and is close to Lincoln, Kirchhoff said that Syracuse is definitely an agricultural community.

“We need their business. The agricultural economy is going to improve this year. We want them to succeed. That makes it hopeful for local businesses,” Kirchhoff said.

Mark Keim of Keim Farm Equipment said that the agricultural economy in the Syracuse area is improving.

“The price of corn and beans are going up. Farmers are finally able to make money off their crops,” Keim said.

When the farmers are doing well, Keim said, it benefits the community.

“The more stuff we sell, the more sales tax we collect. The agricultural businesses in town bring people from other counties into Otoe County,” Keim said.

Randy Auer of Stubbendick Implement said that as the price of corn and grain increases, it helps the economy of the general area and that is reflected in the businesses in the community.

Auer said that when the agricultural community does well, everyone has more cash at their disposal to buy items which might have been optional and to replace worn out items.