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Friday, August 5,2011

California land values continue to rise, but will the trend last?

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The economic downturn that has slammed the residential and commercial real estate markets over the past three years has not spilled over to agricultural properties. A recent report by Rabobank points out that in the past two decades, agricultural land has increased in value by 20 percent to 70 percent, depending on geography.

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Friday, September 12,2008

Winter pastures good bet despite high seed costs

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Along with driving up the costs of inputs such as nitrogen fertilizer, high fuel prices are raising the cost of seed for ryegrass and other small grains, according to a Texas AgriLife Research scientist. Ryegrass seed, which is used in winter pastures, will probably be about $60 per cwt. this year, said Dr. Lloyd Nelson, AgriLife Research small grains breeder. "That’s up about $10 a cwt. compared to last year," he said. "I’m talking about premium varieties." Though based in east Texas, Nelson has the seed of his varietaies grown in the Willamette Valley of northwest Oregon. Climate and other factors make that region ideal for growing seed crops, Nelson said. "I go to Oregon to the Willamette Valley every year to look at various varieties that I have released ... to make sure that they are being increased and with good care ... so that we know we are having high-quality seed coming back to Texas," he said. Nelson said the most likely cause of the premium seed cost increase is from higher transportation costs. "They are having to ship that either by rail or by semi from Oregon, so that makes it a lot more expensive," he said. "Where they can, they will ship it by train, railroad car, and that’s not too bad because the prices are pretty good there. If they have to ship by semi, then it is probably another $5 or $6 a cwt." Nelson developed and released TAM 90 ryegrass, one of the most widely grown forage varieties in Texas and the South. More recently, he released several turf grasses for home lawns and sports fields: Axcella, Axcella 2 and Panterra. He has also released TAMBO, a forage ryegrass he says will be superior to TAM 90. Despite high seed costs, investing in some sort of winter pasture is still a sound economical venture, particularly for areas where the hay reserves have been depleted this year, said Dr. Ray Smith, AgriLife Research legume breeder also based at the Overton center. But the higher costs of production means producers will have to make some tough choices, he said. As with any agricultural venture, choices are based on managing risk, with the least risky ventures often being the more expensive. For example, there are several alternatives to planting a ryegrass-clover mixture, Smith said. A rye-ryegrass mixture is the least risky because it is easy—in comparison with clover—to get a good stand, Smith said. But the mixture does require high nitrogen rates, and that makes it the most expensive. The next lower risk level is the ryegrass-clover mix. Clover is harder to establish than rye because timing and seed depth are critical for a good stand. As with the rye-ryegrass mix, good stands of both ryegrass and the clover will supply extended grazing in the winter and early spring. Smith did not recommend cutting back on the standard nitrogen rate of 60 pounds per acre when planting ryegrass-clover mixes. If the producer finds the cost of nitrogen prohibitive, he or she should instead just plant a clover by itself. "They’ll lose about 30 days of grazing, but they will offset winter feeding costs, and the clover will provide N (nitrogen) for the warm-season grasses the next summer," he said. One way to offset annual seed costs for clover is to manage some as reseeding stands, Smith said. Doing so entails suspending grazing on clover until it has time to make seed. As an example, crimson clover could be grazed until about April 15 and then remove the cattle for about 30 days to allow seed production. By mid- to late-May, grazing could resume or the mature clover–grass mix could be harvested for hay. The producer will lose 30 days of grazing if he or she chooses this option, Smith said. Another cost-saving measure is to plant only what one would use, Smith said. "I wish we had some easy formula for folks that would help them make these choices," Smith said. "But the truth is, every operation is different, and each producer has different expectations. They’re going to have to make their choices based on how much risk they’re willing to take." — Texas A&M University Ag Extension

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