July 7, 2015

UNL survey shows ag land values dropped statewide during past year

Soybean field in JulyNebraska ag land values fell 2% overall in a farm real estate market survey from the University of Nebraska-Lincoln. It covered the 12-month period ending February 1st.

UNL Extension educator Jim Jansen says that average doesn’t tell the whole story.

“The land classes that support the beef industry, as an example, the grazing land or the hay land, had pretty robust increases in value compared to last year,” Jansen says. “The dryland or irrigated cropland declined on average across the state around 5 to 10%, depending on where you were at.”

The prices for grassland were up 10-to-15% statewide. Jansen says the changes in land values were also reflected in cash rental rates. He says cropland rental rates declined five-to-10%.

“There are a few cases where the decline was very modest, but on average, it was 5 to 10% across the state of Nebraska for dryland, cropland, irrigated cropland and center pivot-irrigated cropland,” he says.

Pasture rental rates were up from 10-to-30%. Despite the recent declines in cropland prices, average farmland values in Nebraska are still up 34% from 2012 and 116% from 2010.

Thanks to Ken Anderson, Brownfield Radio Network

June’s Mid-American Business Conditions Index report

The Creighton University Mid-America Business Conditions Index for May, a leading economic indicator for a nine-state region stretching from North Dakota to Arkansas, climbed for June. Indices over the past several months have pointed to positive, but slow economic growth over the next three to six months for the region.

The overall index rose to 53.0 in June from 50.4 in May.

“Much weaker business conditions for firms tied to energy are restraining the overall reading. Weaker conditions were particularly evident in Oklahoma and North Dakota, two energy-producing states. This weakness is spilling over into metal manufacturers throughout the region,” said Ernie Goss, Ph.D., director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.

The regional employment gauge remains in a range indicating slightly negative to stagnant job growth for manufacturing and value-added services firms in the region. The job gauge advanced to a weak 49.1 from May’s 48.3.

For the 19th straight month, Nebraska’s Business Conditions Index remained above growth neutral at 51.3, up from May’s 51.1. Components of the index were new orders at 52.7, production or sales at 52.8, delivery lead time at 51.0, inventories at 52.6, and employment at 49.1. “The state’s durable goods producers, including agricultural equipment manufacturers, experienced pullbacks in economic activity for the month. This pullback was offset by more positive growth for nondurable manufacturers. However, food processors in the state detailed weaker business conditions for the month,” said Goss.

Fischer pleased fast-track trade authority heading to president (AUDIO)

Sen. Deb Fischer

Sen. Deb Fischer

Fast-track trade legislation has passed the Senate and been sent to the president.

It took a second try, but Trade Promotion Authority, better known as fast-track trade legislation, has passed.

The United States Senate voted 60-to-38 to approve TPA. The bill now goes to President Barack Obama for his signature. TPA is a key piece of the president’s economic development package.

TPA gives authority to a presidential administration to negotiate a trade deal with another country. The deal will be submitted to Congress for approval on an up-or-down vote without amendments.

U.S. Sen. Deb Fischer dismisses concerns fast-track gives a presidential administration too much power in trade deals with other countries.

“Because Congress does set the principles in the negotiation process and Congress will be a part of that process now, because both the House and the Senate have to vote on any trade agreement,” Fischer tells Nebraska Radio Network in a telephone interview.

TPA got hung up in the House of Representatives a couple of weeks ago. The main bill squeezed to passage in the House, but failed to move forward when a companion piece went down to defeat, killing the trade legislation package.

House leadership pushed forward a stripped down version, which passed again by a narrow margin.

Fischer sees trade as vital to the Nebraska economy, which exports $9 billion in goods and services each year, $7 billion from the agricultural sector alone.

“I think Nebraskans are fully aware of the very, very positive impact trade has on the state,” Fischer says.

AUDIO:  Brent Martin reports [:45]

Financial crisis in Greece will impact U-S economy

There is a lot of tension in the markets as Greece continues to struggle through a financial crisis with fears of defaulting on debt. Creighton University economist Ernie Goss says this will have an impact on the U-S economy.

Goss says, “As they move closer to default on their bonds investors flee those bonds and head to the U-S raising the value of the dollar. Wanting to get rid of euro’s increases the demand for the dollars and as the dollar goes up and that pushes our manufactured and agriculture goods making them less competitive abroad.”

Goss also believes that it is just a matter of time before Greece actually does default. Other European countries again bailed Greece out of their financial difficulties but they have been doing that for several years. He says the only way Greece can work out of their financial problems is through reforms, something their people doesn’t want.

Goss says there are several issues Greece needs to address. He says people there retire at age 60 and the country is spending too much money on retirement plans. He says many people there are not paying their taxes because they are encouraged not to.

Economy poised for strong second half

JobsIt appears the state economy is poised to have a strong second half of the year.

The latest leading economic indicator compiled by the Bureau of Business Research at the University of Nebraska-Lincoln has risen for the fifth time in the last six months.

Bureau Director Eric Thompson says the indicator, along with a 2.6% unemployment rate, bodes well for the last six months of 2015.

“This is the fifth improvement in the last six months; very consistent improvement,” Thompson tells Nebraska Radio Network affiliate KLIN, “The indicator is supposed to predict what’s going to happen six months down the road and I think what this suggests is the second half of 2015 we’re going to have very strong growth here in Nebraska.”

Strong business expectations and a decline in the value of the dollar are the leading factors behind the rise in the economic indicator.

Business owners responding to the bureau’s survey indicate they want to add employees in the coming months.

The decline in the dollar actually helps the economy, but making American exports cheaper to foreign countries. According to Thompson, a jump in the value of the dollar last year and the first part of this year hampered exports.

Other components of the indicator declined in May:  home building permits, airline passenger counts, and manufacturing hours.

Thompson sees an economy gaining steam.

“The Nebraska economy has been a bit slow the first half of the year,” Thompson says. “It sounds like the second half of the year we’ll make up for that and we’ll have a good year overall.”

Jane Monnich, KLIN, contributed to this report.