Nebraska is in the Midst of Farm Country’s Boom

The farm economy in the Great Plains states are a bright spot in the otherwise gloomy national economic picture. In states like Nebraska, the housing market is holding up just fine, the banks are making plenty of loans, and employers keep adding jobs. Retail spending in the middle of the country was strong even before the $600 tax rebates this spring, and low interest rates and a tax provision in the economic stimulus bill are helping to goose already booming sales of farm equipment and pickup trucks.

The price of farmland in Nebraska has doubled in the past three years, primarily reflecting the boom in commodity prices. The increase also reflects the impact of rate cuts by the Federal Reserve that enabled buyers to bid up land with borrowed money. But if crop prices drop toward historical norms, it could mean sharp decreases in land prices that would devastate some farmers.

The availability of loans to farmers is the strongest it has been in five years, according to a survey by the Federal Reserve Bank of Kansas City, even as banks nationwide are becoming reluctant to lend money. The reason: There wasn’t much overbuilding of housing here, so most regional banks are not saddled with the same bad mortgage and construction loans as their counterparts on the coasts. The good times are not uniform across the region; livestock producers have been pummeled by high prices for feed and fuel.

In Blair, Neb., however, long-vacant storefronts have been turned into furniture shops and restaurants in the past couple of years, and Wal-Mart is looking to open a store just down the way. The billion-dollar Cargill plant that turns grains of corn into high-fructose corn syrup and ethanol just announced another $100 million expansion, adding a Danish company that makes enzymes out of corn — a reflection of booming global demand for all types of commodities.

That prosperity also shows itself on Lyle Schjodt’s farm a few miles outside Blair, where he farms 1,000 acres of corn and soybeans, 150 head of cattle, and 1,200 hogs. He still has the first tractor he ever bought, back in 1968, in a shed. “I’ve been farming for 39 years, and I haven’t seen a better year than this one,” he said. Schjodt is upgrading his equipment; he just ordered a $120,000 Case IH planter, a massive red device that deposits seed corn every seven inches in 30-inch-wide rows. He bought a new $50,000 Ford F-350 back in the spring, too. Nationally, truck sales are battered by skyrocketing fuel costs. But auto sales are up 8% in the Omaha area so far this year, according to sales tax receipts.

Nebraska Cattlemen oppose ethanol mandates

According to Nebraska Cattlemen leaders, the ethanol hearing hosted Monday by Senators Ben Nelson and Tom Harkin in Omaha was a great opportunity to hear all sides of the energy debate. But Michael Kelsey, Nebraska Cattlemen executive vice president, said the state’s largest industry, beef, was not been invited to speak.

According to Kelsey, “renewable fuels are very important to the Midwest, and the nation as a whole,” but the Cattlemen believe that “mandating production and usage has never been good over the long term for any industry, for several reasons.” Mandates promote inefficiency and set an artificial demand, Kelsey said. “The Renewable Fuel Standard (RFS) next year will require approximately 3.5 billion bushels of corn, which is nearly 30% of what is currently grown in the U.S., Kelsey said. “Remember that the RFS is a mandate, meaning the 3.5 billion bushels of corn must be used to produce fuel and cannot be used for food, feed or export.” Kelsey added that the RFS does not promote a working relationship between industries, but instead forces a relationship.

Nebraska unemployment lowest in nation

The national unemployment rate in July rose to 5.7% from 5.5% in June. The highest unemployment rates can be found in Ohio (7.2%); California (7.3%); Illinois (7.3%); Rhode Island (7.7%); Mississippi (7.9%); and Michigan (8.5%). Nebraska had the lowest jobless rate at 3.4%.

New Nebraska program aims to help first-time home buyers

The Nebraska Department of Economic Development has provided more than $1 million to help first time home buyers in central Nebraska. The Housing Development Corporation in Hastings received a $388,000 grant. With the money it is creating a new program it is called the Regional Workforce Initiative. It will allow employees, from various companies, to apply for money to purchase a home.

They must be from low–income families. Applicants could get up to $15,000. The Housing Development Corp. hopes the grant will help retain and recruit employees to central Nebraska.

Focus on youth should solve Nebraska’s labor issues, expert says

or being a community that says it needs its young people to stick around, Grand Island has a funny way of showing it. That’s what Mike Henke, general manager of the Grand Island human resources firm Associated Staffing, concluded after talking to groups of Grand Island high-schoolers. Many high-schoolers say they want to leave the state because there’s nothing to do.

“As a community, we’ve kind of run them out of the things that they love to do,” Henke told the Nebraska Chamber of Commerce Executives on Thursday. “Then we’re shocked when they want to leave.” Henke was speaking to a group of about 20 chamber officials at the Nebraska Chamber Executives’ summer/fall conference at Grand Island’s Midtown Holiday Inn. He said that, for many Nebraska towns, that workforce crisis largely hinges on two aspects: The inability to find workers for entry-level, mostly unskilled labor positions and what’s often called the “brain drain” — the inability to attract the state’s young professionals to come back home.

Those problems are helping lead to a labor shortage that’s expected to get worse as baby boomers retire, Henke said. In response, Henke advised towns to be aggressive about marketing themselves to prospective residents and employees. This generation of young adults tends to choose a community to live in first and a job second, he said. That puts the onus on towns to sell themselves through an active Web site comprehensively listing those cool things to do or communications with a database of high school graduates, he said. Businesses themselves aren’t exempt, either. Henke said the old mentality of “here’s your job — take it or leave it” is dead, replaced by companies that provide loads of perks and bonuses to attract and keep the best employees. “I hate the ‘woe-is-me’ attitude in some communities in the state,” Henke said. “We have so much to offer.”

Nebraskans buying cars hit hard by taxes, fees

An Omaha World-Herald review has found that Nebraska residents, on average, pay more in taxes and fees when they buy a car here than they would in any neighboring state but Kansas. It’s worse in Omaha and several other Nebraska cities because of a local sales tax and a wheel tax that many residents of nearby states avoid. Omaha, in fact, charges the ninth-highest combination of automobile and gasoline taxes of 50 major U.S. cities in a District of Columbia tax study.

Omaha ranks higher than any other Great Plains city in the study — 11 spots ahead of its nearest rival, Wichita, Kan. State officials, car dealers and car owners agree it’s the totality of these taxes and fees — not just the high cost of registration — that has led thousands of Nebraskans to cross the state’s borders and illegally register their cars and pay taxes in nearby states. Some say the Nebraska Legislature needs to address the matter soon by lowering auto taxes, making it tougher to evade those taxes, or both. “All I can tell you is this: These people aren’t going to Iowa, South Dakota and Wyoming because they like the color of the license plates,” said Loy Todd, director of the Nebraska New Car and Truck Dealers Association.

If an Omahan bought a 2008 Ford Explorer in South Dakota and illegally registered it there earlier this year, he paid about $1,400 less in combined sales taxes, registration costs and fees than he would have in Omaha. And that’s just in the first year.

Across the border in Iowa, buy a Chevy Silverado pickup truck and pay about $1,000 less in taxes and registration fees than you would in Nebraska, in part because Iowa charges far less to register a pickup truck than it does a car. Several loopholes in Nebraska law also make it easier to evade car taxes, said Beverly Neth, director of the Nebraska Department of Motor Vehicles.

Nebraska negotiating with Yahoo on data center

A person close to Gov. Dave Heineman confirmed on Aug. 2 that state and local officials are negotiating with Yahoo to build a data center in the Omaha metropolitan area. Negotiators are “at a very serious stage,” and Yahoo might decide within five or six weeks, the person said. The governor’s office declined last week to comment further on whether the state is talking to Yahoo, or whether Heineman would seek additional tax incentives to lure the company here.

A spokesman for the Internet search engine, which is based in Sunnyvale, Calif., declined to say whether it is talking to Nebraska officials. Nebraska’s business incentives package allows it to compete successfully for computer data centers and other sought-after business developments, State Tax Commissioner Doug Ewald said. But Ewald said he had received no application from Yahoo for incentives under the Nebraska Advantage program, which rewards companies for multimillion-dollar capital investments and the creation of high-paying jobs. And not much can happen until he does, Ewald said.

The Legislature modified the Nebraska Advantage program this year to create an additional level of incentives called the Super Advantage. The new level awards incentives if a company meets one of two thresholds: $10 million investment and creation of 75 new high-salary jobs; or a $100 million investment and 50 new high-salary jobs.

Nebraska’s tiny towns may be smaller than ever

The estimated median size of Nebraska towns — 320, which is about the population of Maxwell — may be the lowest ever. And the smallest towns will disappear “if not in a literal sense, then a figurative sense” because of dwindling services and population, said David Drozd, of the University of Nebraska at Omaha’s Center for Public Affairs Research. The Associated Press compared the estimated median of 320 to median town sizes stretching back to 1890.

After peaking at 435 in 1920, Nebraska’s median town population dropped throughout much of the 20th century. It spiked upward in 1980 to 372 and dropped again in 1990. There was a slight increase in 2000, possibly caused by the large immigration of Hispanics into the state during the 1990s.

The low median figure is also another sign that some of the most rural areas outside of Lincoln and Omaha, where about 40% of the state’s roughly 1.8 million residents live, may be slipping toward what some call a “frontier economy” — filled with workers who have unreliable employment and often work for themselves, doing whatever work is available — painting a neighbor’s barn one week, for example, and doing construction work the next — rather than steady, long-term employment.

Leadership Nebraska class learns about Panhandle agriculture

Members of the Nebraska Chamber of Commerce & Industry’s Leadership Nebraska class visited two Scottsbluff operations Wednesday, where they learned about the sugar beet industry and research being conducted at the University of Nebraska Panhandle Research and Extension Center. During the previous two days of travel, they were introduced to a variety of issues and industries connected to Nebraska agriculture.

During their time in Scottsbluff, the learned about alternative crops, feedlot research projects and some of the area’s traditional crops, such as sugar beets, corn and dry edible beans. Researchers also discussed some of the issues facing area producers, such as limited water for irrigation, and the challenges of starting new industries through the development of new crops, such as canola and camelina for biofuels.

The group also visited the offices of Western Sugar Cooperative, where they viewed videos on the sugar beet industry, from its early years in the North Platte River Valley, to today’s harvesting methods. During lunch at the Harms Center, Mitchell Valley farmer Robert Busch and Nebraska State Sen. Phil Erdman addressed challenges to western Nebraska agriculture in general and issues regarding state legislation.

According to Don Mihovk, executive director of the two-year-old program, all citizens across the state have a stake in the future of Nebraska agriculture, and cooperative efforts will make it successful. Graduates of Leadership Nebraska are expected to be actively engaged in finding solutions that will enhance Nebraska’s growth and prosperity.

They will also conduct a series of ongoing meetings and programs to strengthen relationships and enhance the knowledge gained during their Leadership experience. The 23 members of the 2008 Leadership Nebraska class include business leaders, volunteers, educators, philanthropic workers and agriculture entrepreneurs.

Cuban trade team inspects Nebraska Panhandle dry bean industry

Two Cuban trade ambassadors visited the Panhandle last week to learn about Nebraska’s dry edible bean industry.

The Cuban officials met with scientists and technicians at the University of Nebraska Panhandle Research and Extension Center Wednesday afternoon, then toured Kelley’s dry bean processing facility at Mitchell.