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A Foundation for the Future 1. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lawain Biermann is Named 2019Farm Managerof the Year 2. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Grain Markets: Uncertainty and Opportunities 3. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Science-Based Trials of Row Crops Integrated with PrairieStrips (STRIPS) 4. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finding the Right Farm Leasing Option 5. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Update on HertzStaff of Farmland Professionals 6. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Farmland Value Update 7. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Winter 2020LandownerEducationalSeminarsSchedule 8. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Winter ’19 VOL. 36 / ISSUE 2

In this issue:

A Foundation for the FutureThere’s something about the Midwest that’s different from other places in the world. Yes, traffic jams are usually caused by a tractor on the road, and some of our weekends are spent floating down a river or tailgating at a football game, but that’s not what makes us different. It’s the generous and caring people that make the flyover states a truly amazing place to call home.

At Hertz Farm Management we get to work with incredible people, but in this particular case, we were able to partner with people passionate about giving.

On Thursday, January 29, the Community Foundation of Greater Des Moines worked with Hertz to help sell a 200-acre farm in Calhoun County, Iowa at public auction. The farm was a generous gift to support the charitable interests of landowners, Steve and Linda Weitz. The farm ended up selling for a grand total of $1,792,000.

This wasn’t the first time Hertz has had the opportunity to team up with

the Community Foundation. In February 2018, the organizations had a very similar situation take place with a 176-acre farm in Benton County, Iowa. The donors of that property were Emily and Fred Weitz, Fred being the brother of Steve. Between both families, they helped raise over $4.3 million to establish a charitable giving fund

at the Community Foundation!

The Weitz families wanted to leave a legacy that will support the pressing needs and promising opportunities of the community they care about. The gift of this Iowa asset was a tax-wise strategy that met their giving goals while also being a sound planning strategy.continued on pg. 2

“Thanks to the tremendous generosity of the Weitz Family, the Community Foundation of Greater Des Moines will use this gift of Iowa farmland to yield exciting, meaningful change for generations to come.” – Kristi Knous, Community Foundation president

pg.1

Timely information for a select group of farm owners and investors

Hertz800.593.5263

Professional Farm Management, Real Estate Sales, Auctions, Acquisitions, & Land Appraisal services800.593.5263 www.Hertz.ag

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Ag Update

continued from pg. 1

pg. 2 Hertz800.593.5263

Before deciding to donate the farm, Steve and Linda had Hertz manage the farm for 26 years. The most recent Hertz Farm Manager to manage the Weitz property was Rick Dodds. “The Weitz family has been delightful to work with,” explained Rick. “The property they gifted to the Community Foundation is greatly improved from when they acquired it.”

The Community Foundation is proud to offer the Keep Iowa

Growing program as an opportunity for Iowans to use agricultural assets to support the causes they care about. The generosity of Iowans, and Midwesterners in general, is demonstrated every day in the ways in which our communities gather around needs and opportunities to make us better together.

“We were delighted to have the special chance to serve the

Community Foundation in handling the auction sales of the Weitz farms in Calhoun County here in January 2019, as well as in Benton County in early 2018,” said Doug Hensley, President of Hertz Real Estate Services. “Their gifts to the Community Foundation represent the best that Iowa has to offer–great people giving of themselves towards a very worthy community-minded cause.”

Beforedeciding todonate thefarm, Steveand Linda had Hertz manage the farm for 26 years.

Professional Farm Management, Real Estate Sales, Auctions, Acquisitions, & Land Appraisal serviceswww.Hertz.ag

Since 1993, Lawain has appraised, managed, sold, and acquired rural properties for clients. “Growing up on a family farm in northeast Iowa allowed me to gain practical experience in production agriculture. I enjoy the challenges and opportunities associated with agriculture today,” Biermann explains.

To pursue a career in agriculture, Lawain attended Iowa State University where he received a Bachelor of Science in Agriculture, as well as a Minor in Agronomy. Maintaining an active role in professional organizations, Lawain is a member of the American Society of Farm Managers and Rural Appraisers (ASFMRA) and the Iowa Chapter

of the American Society of Farm Managers and Rural Appraisers.

Lawain currently manages 63properties and 11,775 acres across northern Iowa and southern Minnesota. He attributes much of his success to great communication with clients, conservation practices and forming trusting relationships with farm operators.

Lawain Biermann is Named 2019 Farm Manager of the Year

Since 1986, ASFMRA, AgProfessional magazine and Syngenta have teamed up to present the Professional Farm Manager of the Year Award. This award recognizes farm managers whose dedication and commitment to agriculture have

benefited their clients, the American consumer and our most precious commodity–the land.

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Dick Pringnitz, Farm Manager, Nevada, IA

As the 2019 planting season began, it appeared the upside potential for grain prices would be limited unless weather problems developed in the U.S. or around the world. The weather conditions were less than ideal across a large portion of the Corn Belt which impacted planting progress in 2019. Frequent rainfall in April and May prevented farmers from doing fieldwork which delayed planting across the Midwest. The areas most impacted in the eastern Corn Belt included Illinois, Indiana, and Ohio.

The extensive planting delays caused corn and soybean markets to rally from mid-May until mid-June. The December 2019 corn futures peaked at $4.73 per bushel on June 17th after a rally of $1.10 per bushel in four weeks. This was the highest corn prices have traded since 2014. Soybean prices in the November 2019 futures contract also rallied $1.20 per bushel from mid May through mid-June peaking at $9.48

“We remain optimistic that these trade issues will be resolved which will be positive for agriculture and our commodity prices.”

per bushel. This unexpected rally caused by weather concerns provided an excellent opportunity to sell grain when the uncertainty was the greatest. Weather markets are typically short lived and that appears to be the case again in 2019.

Weather conditions improved in early June which allowed producers to wrap up planting the corn and soybean acres they intended to plant although it was much later than optimal. Some producers were not able to plant all of the acres resulting in an estimated 11 million acres of corn and 4.35 million acres of soybeans that were not able to be planted in 2019.

In early October, USDA released an updated Crop Production Report which reduced the projected 2019-20 ending stocks for corn by 261 million bushels from September to 1.929 billion bushels. USDA also slashed projected soybean ending stocks to 460 million bushels, a reduction of 180 million bushels from September.

With the tighter projected ending carryout for both corn and soybeans, USDA increased the expected average price for corn to $3.80 per bushel, a $0.20 per bushel increase. The soybean price was increased by $0.50 per bushel to an average of $9.00 per bushel. Many traders are still anticipating further reductions in the 2019 corn and soybean yields in future USDA reports which could lead to higher prices in the months ahead.

Our grain markets continue to experience tremendous volatility with concern about trade tensions with China as both countries remain in a trade dispute. Soybean prices are bound to move higher if a positive resolution can be negotiated with China in the near term. While a trade agreement has been negotiated between the United States, Mexico, and Canada, our legislature must still approve this agreement before it can be finalized. Canada and Mexico are leading agricultural trade partners and this legislation is critically important to all three countries. continued on pg. 6

Grain Markets: Uncertainty & Opportunities

2019 December Corn Futures 2019 November Soybean Futures

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Background

Prairie strips are a farmland conservations practice that delivers disproportionate soil, water and nutrient benefits while also increasing wildlife habitat. There are currently over 60 farms with prairie strips in six states protecting about 5,000 acres of cropland.

Prairie strips:• Were developed as a result of scientific experiments,

• Help conserve farmland by strategically incorporating native prairie plants into crop fields; and

• Are compatible with existing federal and state cost-share programs so farmers who implement them can recoup some of their costs, estimated at between $28 and $39 per protected acre per year.

Prairie strips are now eligible for the Conservation Reserve Program in the 2018 Farm Bill. Results from more than 13 years of trials have demonstrated that converting 10 percent of a crop field to strategically placed prairie strips reduce up to of 95 percent of sediment, 90 percent of the phosphorus and 84 percent of the nitrogen from overland flow of surface water. The experimental sites were not tile drained and all systems used no-till.

Not Your Typical Contour Buffer StripContour buffers are typically planted with fixed widths. In contrast, the width of the prairie strips vary based on the amount. Where more water is flowing down-slope, prairie strips should be wider, and where less water is flowing down-slope, the prairie strips can be narrower. Also, the types of plants used for conservation buffers and filter strips can affect how they function. Cool season exotic grasses such as smooth brome and Kentucky bluegrass are widely used to provide ground cover in agricultural areas of the U.S. Corn Belt, but are relatively weak-stemmed and prone to laying flat under heavy rain. They are useful for grassed waterways that are intended to convey water while preventing erosion. In contrast, native tall-grass prairie communities are typically dominated by stiff-stemmed warm season grasses such as Indiangrass, big bluestem, little bluestem, and a wide range of erect forb (i.e., wildflowers) species that are less prone to

collapse under heavy rain. These native plants are more effective in providing resistance to water flow and sediment movement.

How Are Prairie Strips Implemented?Prairie strips can be planted several times throughout the year. It is preferable to seed in either the fall after harvest, or the spring, before or after planting (but before June 30 in Iowa). Midsummer is generally not a good time to plant.

Prairies include two basic types of plants, forbs (i.e. wildflowers) and grasses. Forbs benefit from the cold wet stratification an Iowa winter provides, and like a fall seeding. Prairie grasses should be seeded in greater volume for a fall seeding as their germination rates suffer from predation and exposure. Dormant, or winter seedings also can be successful. There are numerous native seed dealers and technical service providers throughout Iowa and the Midwest.

You should be aware that multiple years will be required, three at minimum, for your prairie strips to start really looking like a prairie.

Prairie strips help conservefarmland bystrategicallyincorporatingnative prairieplants intocrop fields.


Science-Based Trials of Rowcrops Integrated with Prairie Strips (STRIPS)

Information for this article provided by Iowa State University. Learn more at: www.prairiestrips.org

Learning about Prairie STRIPS and Saturated Buffers at the Roadman Farms in North East Iowa.

Are you aware of the full range of farm leasing options available to you and which option will be best for you?

There are several kinds of leasing situations. The return of a lease will vary depending upon market conditions and your individual situations, and the return and risk of each type of lease are important considerations.

Leases options include:

50/50 Crop Share Lease.This option involves equal contributions from you and the operator. The operator provides labor and machinery; you provide the land. Crop income and expenses are divided equally between you and the farm operator.

Modified Crop Share Lease.Besides the land, you provide all the seed, chemicals and fertilizer. The operator provides the machinery, fuel and labor. You and the operator are responsible for drying and storing your shares of the crop. You receive from 65 to 80 percent of the crop, depending on the quality of the land. This arrangement will normally provide

“Does your current lease arrangement match your farmland ownership objectives?”

you a higher return than a 50/50 crop share lease.

Cash Rent.The operator pays a set amount of cash, and you do not participate in crop production. It is important to evaluate the herbicides, fertilizer and method of farming to protect your land investment.

In Iowa it is equally important to execute a UCC 1 financing statement to secure collection, while a UCC 1 is not required in Illinois and other states.

Custom Operation.You receive the entire crop and government payments and pay for all the cropping expenses. A farmer in the local community is paid to till, plant and harvest the crops. Most progressive and timely operators have a more than adequate line of equipment to farm their current operation and are interested in custom farming to have a guaranteed cash flow. As they already have their equipment and labor, their only cost is fuel and repairs. The custom operation will generate a higher net income on above-average land, particularly with favorable yields and commodity prices.

Percentage Lease.This option gives you a specified percentage of corn or soybeans delivered to an agreed upon grain terminal or location and a percentage of the government payment. The operator pays all expenses, giving you some inflation protection and the ability to increase your return through effective grain marketing. It is important to evaluate the credit-worthiness of the operator and evaluate the herbicide, fertilizer and method of farming to protect your land investment. Proper application rates and farming methods can enhance the production potential of the farm. Generally, your percentage will vary from 35 to 45 percent, depending on the quality of the land and the crop.

Our Farmland Professionals combine a personal approach withexceptional expertise and have become trusted advisors to our clients since 1946. Because we recognize the importance of your relationship with your land, we are in a unique position to offer the objective guidance you need to make the best decision for you and your family. Visit our website or call us today to learn how we can assist you.

pg. 5Hertz800.593.5263


Finding the Right Farm Leasing Option

OBJECTIVES Custom Agreement Modified Crop Share Crop Share Net Share Variable Cash Rent Cash Rent

Grain market opportunities

Productivity and technology advances

Income tax flexibility and deductions

Minimal investment

Benefit from land improvements like drainage tile

Influence farm operations and care

Participate in a higher value crop (seed corn)

Conservation practices–cover crops, no-till

Highest Benefit Moderate Benefit Least Benefit

Hertz FarmManagementcontinues to lead farm policy discussions on Capitol Hill for the benefit of our landownerclients.

pg. 6 Hertz800.593.5263


We remain optimistic that these trade issues will be resolved which will be positive for agriculture and commodity prices. In the meantime, the USDA announced in May there would be another Market Facilitation

Program (MFP) to assist farmers in response to the continued retaliation and trade disruption. For the 2019 trade mitigation programs, the USDA developed a single rate per acre in each county

for the MFP eligible crops. These payments will range from $40 to $79 per acre for eligible crops for the counties in Iowa, $50 to $87 for counties in Illinois, and from $15 to $74 in Nebraska.

Update on Hertz Staff of Farmland Professionals

continued from pg. 3

Scott AhrensScott joined Hertz Farm Management in July 2019 as a farm manager in Norfolk, NE. He grew up on a grain and livestock farm in Crofton, NE, and is also member of the American Society of Farm Managers and Rural Appraisers.

Jake MillerJake joined Hertz Farm Management in May 2019 as a farm manager in Cedar Falls, IA. He has a strong passion for production agriculture, precision farming and stewardship practices and is also member of the American Society of Farm Managers and Rural Appraisers.

Elliott SiefertElliott joined Hertz Farm Management in January 2019 as a licensed real estate salesperson in Nevada, IA. He is a graduate from the University of Northern Iowa with a bachelor’s degree in finance and real estate. Elliott is also a member of the REALTORS Land Institute.

Kyle Hansen, ALCHertz Farm Management is proud to announce that Kyle Hansen, ALC will be the National President of REALTORS® Land Institute (RLI) in 2020. Kyle was also the President of the Iowa Chapter of REALTORS® Land Institute during the 2012-2013 year.

Hertz Farm Management managers represented their landowner clients on the Hill in Washington D.C. in September as part of the American Society of Farm Managers and Rural Appraisers (ASFMRA) Leadership Institute. The Institute provides members with opportunities to enhance their leadership skills, gain a better understanding of the policy-making process and represent their clients’ interests.

Left to Right:

Dan Riewerts,Josh Peak,Scott Henrichsen, AFM, and Craig Welter

Hertz OnCapitol Hill

“What’s sometimes more difficult for many landowners to know... is what’s occurring in the local neighborhoodof their farm.”

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Doug Hensley, President of Real Estate Services, Nevada, IA

Location, Location, Location! As a youngster in the real estate business, I learned early on that the three most important factors that influenced land values included location, location, and location.

To many, this quip seems silly–and to a degree, it is. However, as I’ve watched the farmland market ebb-and-flow over the years, I’ve learned the wisdom behind this true-ism. Some broad factors– based on location–play a huge role in determining value. And here at Hertz, we observe these broad macro-level movements, including those described below across Iowa, Illinois, and Nebraska.

Iowa Farmland Trends Slightly HigherThe Iowa Chapter of REALTORS® Land Institute released its September 2019 Land Trends and Values Survey, which showed a statewide average increase of cropland values of 0.8% for the March 2019 to September 2019 period. In the face of significant uncertainty in the broad agricultural marketplace, Iowa land values have shown resilience and stability. This has happened primarily because there has been a limited amount of land on the market, strong government support (e.g., MFP payments), low interest rates, and Iowa farmers have grown an average-plus crop in 2019.

Illinois Farmland Shows Little ChangeAccording to the annual Mid-Year Snapshot Survey done by the Illinois Society of Professional Farm Managers and Rural Appraisers, high productivity farmland has experienced little to no change in price, while lower productivity farmland decreased ever so slightly (~1% lower). Low interest rates, government support (e.g., MFP payments), and limited inventory of land on the market have also supported the Illinois market. However, the 2019 crop year has been difficult because of very wet weather, particularly in northern Illinois, where weakness in the land market has been prevalent.

Nebraska Farmland Continues to DeclineAccording to the 2019 survey from the University of Nebraska-Lincoln, average market values of farmland in Nebraska declined by 3%, marking the fifth consecutive year of downward pressure. Land industry professionals participating in the annual survey reported global trade issues/uncertainties, and property tax policies, as two of the most negative forces influencing agricultural real estate in Nebraska.

Location– The Macro vs. The MicroSlightly up, stable, and slightly down. Some of these broad, macro-level factors, are predictable. For example, a good crop often portends stronger land values, while poor crop yields often result in weaker land values. Likewise, punitive tax policy or rising interest rates normally pressure land values, while low rates or relaxed tax policies are supportive to values.

What’s sometimes more difficult for many landowners to know, especially for those who live out-of-area from their farmland holdings, is what’s occurring in the local neighborhood of their farm. And what’s happening in the local neighborhood of your farm is just another one of those location-related factors–only this time, it’s at a micro-market level.

This is often where the land professionals at Hertz come in. Because we annually appraise, buy, sell, and manage hundreds of thousands of acres across the Midwest, we’re familiar with both the macro and the micro. And there are few neighborhoods where we haven’t worked previously, or where we aren’t currently working. So, always know that we’re positioned and ready to assist you, should the need ever arise. You can call us toll-free at 800.593.LAND (5263) or visit our website at Hertz.ag to start a conversation today.

FarmlandValue Update

Iowa OfficesCedar Falls, IA (319) 234.1949 Humboldt, IA (515) 332.1406Mason City, IA (641) 423.9531Mt. Vernon, IA (319) 895.8858Nevada, IA (515) 382.1500Strawberry Point, IA (563) 933.4973Washington, IA (319) 382.3343

Illinois OfficesDeKalb, IL (815) 748.4440Geneseo, IL (309) 944.2184Kankakee, IL (815) 935.9878Monticello, IL (217) 762.9881

Nebraska OfficesNorfolk, NE (402) 371.9336Omaha, NE (402) 697.7500

Indiana OfficeTipton, IN (765) 319.3384

Return Service Requested

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Corporate Headquarters

415 South 11th Street, P.O. Box 500Nevada, IA 50201-0500515.382.1500www.Hertz.ag

PRSRT STD.U.S. Postage

PAIDPermit No. 1062St. Louis, MO

All landowners are invited to attend one of a series of Winter seminars. Our seminar topics will include Grain Markets, Farm Lease Trends/Leasing Alternatives, Future of Agriculture, Land Trends and Values, Agriculture Trends including Organic Production anda GMO Update.

Landowner Educational SeminarsWinter 2020 Schedule

Dates & Locations

If you are planning for the next generation, you’re encouraged to invite your children to attend with you.

Seminar Online Registration Pricing: $30 per person, $50 per couple.

Register and Pay Online to Save!

February 10, Anaheim, CAFebruary 11, Palm Springs, CAFebruary 13, Glendale, AZFebruary 14, Chandler, AZ

All seminars will be from 8:30 a.m.-3:15 p.m.

Save $5 per person, $10 per couple when you register and pay online.

Walk-in price: $40 per person, $75 per couple.

Registration includes: Lunch, break refreshments and handouts of the presentations.

February 24, Orlando, FLFebruary 25, Sarasota, FLFebruary 26, Ft. Myers, FL

For your convenience, youcan register one of four ways: • For your discount, register Online at www.Hertz.ag/seminars

• Call 319.449.6116 Ask for Seminar Registration

• Email: [email protected]

• Mail the enclosed postcard

pg. 8

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