TERRA FIRMA Fall 2013 by REALTORS® Land Institute

UNDER ALL IS THE LAN D FALL 2013 Vol. 67 No. 2

OFFICIAL PUBLICATION OF THE REALTORS速 LAND INSTITUTE

2013 REALTORS® Land Institute & National Association of REALTORS®

Course and Events Calendar*

CONTENTS President's Message.............................................................. 3 News Briefs from National..................................................... 4 Member News..................................................................... 11

October 7 – 31

Essentials of Negotiation Online Course

October 7 – 31

Timberland Hybrid

Newest ALCs........................................................................ 19

October 14

Columbus Day

Education............................................................................ 21

October 21-23

Land Investment Analysis—St. Augustine, FL

Chapter News...................................................................... 28

November 4 – 29 Land Investment Analysis Hybrid November 4 – 29 Legal Aspects of Real Estate Online Course November 6-11

NAR Annual Meetings Conference & Expo— San Francisco, CA

November 11

Veterans Day

November 28

Thanksgiving Day

December 25

Christmas Day

*Note: Additions and modifications will be made to this throughout the year. Check www.rliland.com for updates. REALTORS@ Land Institute (RLI) Day prior to the 2013 NAR REALTORS® Conference & Expo (Nov. 8-13) in San Francisco, CA When: November 7, 2013 Where: Grand Hyatt Hotel, San Francisco, CA Registration Fee: $170 Schedule: Nov 6 | 11:30 am – 12:30 pm and 3:30 pm-4:30 pm RLI Day Registration Nov 6 | 1:00 pm – 3:30 pm RLI 2012 – 2013 Board of Directors Nov 6 | 5:30 pm – 7:00 pm RLI Day Attendee Social Nov 7 | 7:00 am – 9:15 am RLI Day Registration Nov 7 | 8:30 am – 9:15 am RLI Annual Past Presidents Circle Meeting (By Invitation Only) Nov 7 | 9:30 am – 10:15 am RLI Education Update Nov 7 | 9:30 am – 10:15 am RLI ALC Designation Committee Meeting Nov 7 | 10:30 am – 11:15 am RLI Land Education Foundation Trustees Meeting Nov 7 | 10:30 am – 11:15 am RLI Futures Leaders Committee Meeting Nov 7 | 11:30 am – 12:00 pm RLI Government Affairs Committee with Russell Riggs, NAR Senior Regulatory Representative and RLI Liaison Nov 7 | 12:15 pm – 2:30pm RLI Recognition & Induction Luncheon / Annual Membership Meeting* Nov 7 | 5:00 pm – 7:00 pm RLI Reception

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FEATURES Government Affairs Briefing.................................... 8 By Russell W. Riggs, RLI Government Affairs Liaison National Association of REALTORS® U.S. Farm Real Estate Values Increase 9.4%..............10 By Marc Schober, Director, Colvin & Company, LLP Why Simply Helping Future Clients is the Right Approach to Selling................................................15 By Frank Belzer, Vice President of Corporate Training Climate Change and Agriculture in the United State: Effects and Adaptation Report................................17 The Implications of Muscarello v. Winnebago County Board: Are Setback Limits Scientific Findings, and Legislative Activisim a Downwind Landowner's Only Protections Against Wind Wake Effects............24 By Kimberly E. Diamond, Counsel, Specialty Finance Group of Lowenstein Sandler LLP Lower Commodity Prices to Test the Farmland Market...................................................26 By Brent A. Gloy, Professor and Jason R. Henderson, Associate Dean and Director, Purdue University Staying Competitive Today Requires 5 Important Technology Strategies............................................29 By Aaron Graham, ALC, Land Pros Realty, Land Pros Systems, Inc. The Sustainability of Farm Land Prices from an Auctioneer's Point-of-View........................31 David Whitaker, Auctioneer; REALTOR®, Hertz Real Estate Company

PRESIDENT’S MESSAGE IN 2014 WE CONTINUED TO BUILD THE FUTURE “Time sure does fly!” It is almost time for me to become the Immediate Past President. As such, I might not be “the President,” but I will continue to help this organization that has been instrumental in “building the future” of many land professionals—including me.

UNDER ALL IS THE LAN D

Fall 2013 Edition Published by the REALTORS® Land Institute 430 North Michigan Avenue Chicago, Illinois 60611 Telephone: 1.800.441.5263 (LAND) Fax: 1.312.329.8633 E-mail: rli@realtors.org Website: www.rliland.com Editor Michele Cohen, Executive Vice President Contributing Editor Megan Shimko, Institute Coordinator Cover Photo Courtesy of Don Donald, ALC The Great Southern Land Company Photo taken at Yellowstone National Park.

Chuck Wingert, ALC 2013 RLI National President

This year, the RLI Executive Committee and staff continued to keep a keen eye on the fiscal direction of the organization with an eye on what is the best for members. Member benefits were developed to help with building knowledge, business, and relationships. These included fresh involvement in social media with a new LinkedIn site called LANDS FOR SALE NETWORK, a GOOGLE+ site exclusively for Accredited Land Consultants (ALCs), and continued development of RLI’s e-mail listing tool called LandLIST.

A special thank you is extended to the Committee Chairs and Vice Chairs, Committee Members-at-Large, and to the RLI Representatives to NAR Committees. Volunteer members are the heartbeat of organizations. The time and dedication contributed to ensuring that the organization is positioned for strength is priceless. Thank you. The Government Affairs Committee reviews issues and responds accordingly to happenings on the Hill that are relevant to land professionals. As a result of their review, this year RLI signed onto a letter submitted to the Senate that covers some concerns about Tax Reform points. The Committee is staying informed on the Farm Bill, Water Rights, Drones, Flood Insurance, and other areas. The Education Committee continued to present the ALC-to-ALC Teleconferences. Several new courses were rolled out this year with two more approved to be offered in 2014. The committee approved the Auction Fast Track and continues to explore delivery systems to bring LANDU’s best-in-class education to all. The ALC Designation Committee explores the ALC Requirements to make sure that the Designation stays strong and relevant. They review all ALC applications and are focused on keeping the standards high and the requirements met. What else? • The 2014 National Land Conference, Land: The Real Deal, was a first-class event that had the highest attendance of any conference to date. • LANDU Education Week Plus took place in Chicago with more than ten people successfully completing the ALC Exam upon completion of the courses taken during this week. • The ALC program is strong with candidates from all regions working to earn this esteemed designation. • The ALC Advanced program started this year with many ALCs working toward becoming eligible for this tier. • An ALC Code of Conduct was developed and approved to reinforce that ALCs are honorable land professionals who recognize the importance of land and who share in the responsibility to have high ethical standards that also follow the Code of Ethics of the National Association of REALTORS®. • A Future Leaders Committee was approved by the Board of Directors that will explore how to position the organization for what is to come and what is needed by the members to help “build a strong future.” • An increased awareness of the Institute and the ALC designation has been developed with NAR, local and state organizations, and franchisee corporations. • An ALC survey was completed and the results shared to promote the ALC brand. The total volume of business from 100 ALC respondents was $979,077,917 in 2012. The single largest transaction reported was $83,000,000--one of multiple transactions made by a single esteemed ALC. With a total of 461 active ALCs, this is a small sample, but a clear indication, of the impressive total business generated by these professionals. I cannot say enough about the RLI 2013 Officer Team with whom I have been honored to work-George Clift, ALC; Terri Jensen, ALC; and Ray Brownfield, ALC. Thank you, George, Terri, and Ray for your dedication and generosity of ideas and time.

Copyright 2013. All rights reserved. Reproduction in whole or in part without permission is prohibited. Views expressed within the publication are not necessarily endorsed by the REALTORS® Land Institute and information should not be construed as recommendations for any course of action regarding financial, legal, or accounting matters.

Most importantly, I want to give a special thanks to Michele, Karen, and Megan, our dedicated RLI staff, who through focused determination kept RLI within budget and brought the best programs and the highest level of customer service to our members. They are the ones that make it all come to life. It has been an honor to serve as your 2013 president. This Minnesotan looks forward to seeing y’all at the 2014 National Land Conference in Charleston, SC, on March 12-14! All the best,

Chuck Wingert Accredited Land Consultant 2013 RLI National President

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NEWS BRIEFS from NATIONAL RLI DAY: MEETINGS, AWARDS, INDUCTIONS, RECEPTION George Clift, ALC, President of Clift Land Brokers, will be sworn in as the 2014 National President of the REALTORS® Land Institute on RLI Day, Thursday, November 7, prior to the start of the NAR Annual Conference & Expo in San Francisco, California. “Thank you for entrusting me with the responsibility of the office of the 2014 RLI National President. As I think about the future of the REALTORS® Land Institute, we will continue to focus on our education. Our business has changed over the past few years and brokers need to take advantage of the educational opportunities provided by the national office or by the local and state chapters. In addition, RLI will continue to enhance the member benefits. The networking opportunities within the organization are unsurpassed benefits. The opportunities to meet, visit, counsel, and work with land specialists located throughout the U.S. is unparalleled. I encourage each of you to get to know your fellow RLI members. There is a vast amount of experience that’s represented in our association.” Clift was elected Vice President of the Institute in 2011. In 2012, he served as the Vice President and in 2013, during the Wingert Administration, has served as the President-Elect. He is an active member of the Executive Committee developing and Chairing a Chapter Development Task Force, championing the development of the 2014-2017 Strategic Plan, and serving on the Financial Committee. For a full RLI Day Schedule, see page 2 or visit www.rliland.com/ nar-annual-conference.

MEET BOB TURNER, ALC THE 2014 National RLI Vice President RLI is proud to announce that Bob Turner, ALC, is the 2014 National RLI Vice President. Being a four-year volunteer commitment to this esteemed organization, Turner will ascend to the position of the National Presidency in 2016. Turner brings strong experience and stewardship to the Executive Team. He has served on the RLI Board of Directors and has held the prestigious position of being RLI’s representative to the NAR Executive Committee. He will, again, serve in this role in 2014. He has been invited by NAR to serve on special task forces throughout the years. Turner was the Chair of the 2013 National Land Conference, and was the RLI Committee Representative to NAR’s Federal Housing Policy Committee. In 2011, he received the prestigious Land REALTOR® of America Award. In addition, Turner has been the RLI Tennessee Chapter President and a member of the Board of Directors of the Tennessee Association of REALTORS®. Turner served as president of the Memphis Area Association of REALTORS® in 2004 and was named MAAR Realtor of the Year in 2005. Turner and his wife, Wendy, are the owners of Southern Properties Real Estate in Cordova, TN.

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“Thank you for the honor to serve as the 2014 National Vice President of the REALTORS® Land Institute. I look forward to the opportunity to meet you and share knowledge and information with all of our members of RLI. I want to work with you to build a fluid network of communication among the members to help you become the 'Land Professional' that you desire to be. With your help, we will continue to build REALTORS® Land Institute to be the best professional Institute for land professionals in all segments of the business.”

WE HAVE A VOICE The 2013 Midyear Meetings and Expo of the National Association of REALTORS® convened in Washington D.C. on May 13-18, 2013. REALTORS® Land Institute had a strong presence at the committee meetings to represent the opinions and priorities of all land professionals. RLI attendees had opportunities to speak with their state government officials on the Hill. RLI held a meeting for all members participating in the Midyear Meetings on Tuesday, May 14, 2013. Russell Riggs, RLI Government Affairs Liaison through NAR, Ken Wingert, NAR Senior Legislative Representative, and Evan Liddiard, NAR Senior Policy Representative, spoke to water rights, tax reform, land use, flood insurance, Koontz v. St. Johns River Water Management District, and other relevant topics for RLI members. Reports and information about government affairs issues are available at http://www.rliland.com/dc-updates. If you have specific issues to bring to the attention of RLI’s Government Affairs Committee, contact RLI at rli@realtors.org or George Harvey, Government Affairs Committee Chair, at george@TheHarveyTeam.net. RLI has a voice!

RLI EXECUTIVE COMMITTEE MEETS WITH CHRIS POLYCHRON, 2013 NAR VICE PRESIDENT Members of RLI’s Executive Committee—Chuck Wingert, ALC; George Clift, ALC; Ray Brownfield, ALC and Michele Cohen, RLI Executive Vice President, met with Chris Polychron, NAR Vice President, to bring awareness of the organization and its members to NAR leadership. During this meeting, leadership shared information about the Accredited Land Consultant (ALC) designation and the level of education, background, and volume needed to earn this prestigious designation. A report was submitted to Polychron that included information on the designation, LANDU professional development opportunities, and ALC survey results: The total volume of business from 100 ALC respondents to the survey was $979,077,917 in 2012. The single largest transaction reported was $83,000,000—one of multiple transactions made by a single esteemed ALC. With a total of 460 active ALCs, this is a small sample, but a clear indication, of the impressive total business generated by these professionals. Leadership shared the direction of RLI and addressed ways that RLI and NAR could effectively work together to meet the needs of land specialists.

NEWS BRIEFS from NATIONAL The 2014 National Land Conference If Land Could Talk…Not to mention RLI’s 70th Anniversary Celebration RLI is revving up for what will be the biggest and best National Land Conference on March 12-14 in Charleston, South Carolina (see page 18). Some of the highlights-• •

• • • • • • • •

Experts in economics Professionals in the areas of marketing, ranch investments, mineral rights, technology, government affairs, international business, timber trends, and more A new Meet, Greet, and Marketing Blitz Relevant topic round tables facilitated by ALCs and other subject-matter topic experts Recognition of new ALCs The “Bourbon and Boots” 2014 President’s Inaugural Reception RLI’s 70th Anniversary Luncheon Celebration The Greatest Cowboy Auction on Earth Tours Surprises!

If you are in the land business, this is where you need to be!

COMMITTEES OF THE REALTORS® LAND INSTITUTE The 2013 Committees of the REALTORS® Land Institute have a vital role in positioning the organization to move forward in Government Affairs, Professional Development Programming, and the credibility of the Accredited Land Consultant (ALC) designation. RLI salutes the member volunteers of these committees who keep the standards high and are a solid reflection of the organization. Government Affairs Committee: George Harvey, Chair (top photo); Kirk Weih, ALC, Vice Chair (bottom photo) The Government Affairs Committee oversees policy regarding legislative and regulatory issues. It is made up of representatives to the NAR Land Use Committee, the NAR Commercial Legislative & Regulatory Subcommittee, the NAR Public Policy Committee, the NAR Commercial Alliance Committee, the RLI Government Affairs Liaison of NAR, and members-at-large appointed by the RLI National President. The Committee reviews that which is happening on the Hill working closely with Russell Riggs, RLI Government Affairs Liaison, to raise awareness of the land point of view and concerns. They have been active in meeting with DC staff on the Farm Bill, Water Rights, Tax Reform, Drone Regulations, and proposed Repeal of the Estate Tax. RLI Government Affairs Committee Members and the Executive Committee added input and signed onto a letter

submitted to Senators which voiced input on Tax Reform issues. View all Government Affairs’ updates at www.rliland.com. Education Committee: Renee Harvey, ALC, Chair (top photo); David Hitchcock, ALC, Vice Chair (bottom photo) The Education Committee oversees policy relating to education programs and services. They review all areas that fall under the LANDU umbrella-potential new courses, course delivery formats, university partnerships, instructor approval, instructor policies and procedures, web seminars, LANDU Week, and ALC-to-ALC web seminars. They review the requirements of potential additions to the Fast Track program to ensure that the credentials meet the standards to earn the ALC designation. This year the CAI (Certified Auctioneer Institute) was added to the Fast Track Program. Two new courses for 2014 have been approved, Auction 101 and Building Business Through Technology. The committee is positioning for 2015 to add International Courses to the LANDU Curriculum. Accredited Land Consultant Designation Committee: Danny Smith, ALC, Chair (top photo); Flo Sayre, ALC, Vice Chair (bottom photo) The Accredited Land Consultant Designation Committee creates and oversees policy relating to the ALC requirements, the application process, and approval of candidates. In 2013, this committee has reviewed and approved ALC candidate applications, reviewed and updated ALC requirements, developed verbiage for new categories for earning the designation. In addition, they have made recommendations to the Education Committee to review new categories that might fit the ALC designation. This committee champions policy and requirements to ensure the credibility and relevancy of the ALC designation. New for 2014 Future Leaders Committee: Dan Flanagan, ALC, 2014 Chair A new committee, the Future Leaders Committee, has been approved by the RLI Board of Directors and will be active in 2014. This group will create and oversee technology and trends for members and the land professional. The Committee will anticipate generational needs and directions to suggest programs and events to position the organization and to build future RLI leadership.

Special Meeting of the NAR Board of Directors On July 24, 2013, Chuck Wingert, ALC, RLI 2013 National President, and John Dean, ALC, RLI Representative to the NAR Executive Committee, attended a special meeting in Chicago assembled by the NAR Board of Directors to discuss the future of realtor.com®. Fundamental changes were approved for the site to enable it to stay current with the new trends for listing sites. More on this may be found at www.realtor.org.

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NEWS BRIEFS from NATIONAL Benefits of RLI Membership As the essential professional membership organization created for and by land real estate experts, the REALTORS® Land Institute provides its members with valuable membership benefits, from referral opportunities to discounts and special services. Membership benefits include:

• Access to a national network of land professionals who share a deep commitment to the land specialty • Inclusion in a professional group dedicated to building relationships, building knowledge, and building business • Opportunity to earn the Accredited Land Consultant (ALC) designation and the ALC Advanced, which demonstrates the highest levels of professional competence, expertise, and achievement • Core education through the organization’s LANDU curriculum, as well as on-going professional development programs delivered through a variety of channels, from online to in person • Legislative advocacy and a voice in Washington through the National Association of REALTORS® • Invitations to participate in education and networking meetings and conferences, including the RLI National Land Conference and the National Association of REALTORS® annual events • Member-to-member networking that results in open and candid information exchange and increased productivity • An array of information and resources on land and real estate trends • Individual online Member Profiles on the organization’s web site that increase market exposure • Social networking strength and a Linked-In Land Listing Network • Strategic alliances with related organizations that expand members’ professional reach and visibility • Participation in Partner and Sponsor Programs that provide discounts with publications, information resources, and other business service providers • Strong chapter organizations that promote knowledge sharing and business development at the local level • On-going print and electronic communications that keep members current on the latest organizational activities including the TERRA FIRMA, the award winning newsletter of the organization • Awards programs, such as the Meeks Distinguished Service Award and Land REALTOR® of America, that recognize outstanding achievement and professionalism • Leadership opportunities on both the local and national levels • ALC-to-ALC TeleConference on current issues relevant to the land professional • Monthly publication of land articles to stay up-to-the minute on land news • Roll out in 2014: Land Connections, an RLI member exclusive listing site

TACTICAL TOOLS Google+ Accredited Land Consultant Platform The REALTORS® Land Institute has a GOOGLE+ Accredited Land Consultant (ALC) platform. With over 500 million users, GOOGLE+ is the second largest social networking platform

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in the world. Using active social media sites is an important strategy to building bonds and business. The more ALCs that join, the stronger the platform will be and the more benefit you will derive from the social network. A special thank you to Gayle Harvey, ALC, for sharing information about this tool in an ALC-to-ALC Teleconference held on June 11. LandLIST LandLIST is a tool for members to share land listings with fellow RLI members via their email. On September 1, all members were attached to this email-based land listing tool with the option to opt out at any time. LinkedIn Lands for Sale Network A part of the REALTORS® Land Institute LinkedIn Network, The Lands for Sale Network provides a place for Accredited Land Consultants (ALCs) and Institute candidate members to post listings – for all who visit the site to view. Coming Soon: Members Only Land Connections Listing Site RLI is developing a “members only” listing site, Land Connections: Do Business with the Best-in-the-Business, to be rolled out in 2014. The site will have a link on the homepage of the Institute’s website. Although only members will have the option to post listings, the listings may be viewed by everyone who has virtual access. Stay tuned for more information on this initiative.

LAND TOPIC WHITE PAPERS Members have the benefit of accessing white papers on landrelevant topics written by ALC candidates and ALCs. These white papers are posted in the member’s only section of the website and cover Wind and Air Rights, Auctions Today, Land Values, and more. White papers will be added after the 2014 National Land Conference developed by those who attend the conference as a course option. If you would like to participate in the “Conference as a Course Option,” visit http://www.rliland.com/ elective-course-credit-option.

2014 PARTNERSHIPS REALTORS® Land Institute has opportunities to fit all needs to be a partner. The organization values the partnerships and admires the commitment to the organization, to Institute programming, and to education. In addition, this is chance to become connected with our members and to build mutually beneficial relationships-whether the partner is a large organization or a one-person shop! Some of the possibilities are partnerships for educational programming such as web seminars, LANDU courses, LANDU Education Week, and TERRA FIRMA. In addition, the opportunities to be a 2014 National Land Conference partner are available. To view the partnership programs, visit www. rliland.com/conference-partnerships. Customized partnership programs are available, too. To learn more, contact rli@realtors. org or call 1.800.441.5263.

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GOVERNMENT

AFFAIRS BRIEFING Russell W. Riggs RLI Government Affairs Liaison National Association of REALTORS®

News and Notes from Inside the Beltway Attend Your Representative’s Town Hall Meeting Informed and Ready! Congress recently adjourned for their August Recess. This recess period represents an important opportunity to directly engage with Members of Congress on your home field. To maximize your home field advantage, here are some materials to use if you meet with your Member of Congress. Because there are so many fundamental issues facing real estate, including financing, taxes and property protection, it is critically important that we take our messages to Congress this August.

Ways and Means Duo Unveils Bipartisan Bill On Permanent Conservation Easement Break Reps. Jim Gerlach (R-Pa.) and Mike Thompson (D-Calif.) will introduce legislation July 24 to extend tax incentives designed to support land conservation, they said July 23. In place since 2006, the temporary income tax deduction has provided various land owners a tax benefit for voluntarily forgoing future development of their land, but it is scheduled to sunset at the end of this year. The bill would make permanent the conservation easement tax incentive. The bill would allow land donors to take the deduction over a 15year period, a full decade longer than the current five-year period. In addition, it would raise the maximum deduction a donor can take for donating a conservation easement from 30 percent of their adjusted gross income in any year to 50 percent, and for qualified farmers and ranchers, allow them to deduct up to 100 percent of their adjusted gross income. The Gerlach-Thompson bill is being referred to Ways and Means for further consideration.

The materials are available at http://www.ksefocus.com/ billdatabase/clientfiles/172/10/1831.pdf .

Across the Capitol, Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Orrin Hatch (R-Utah) have introduced similar legislation (S. 526) to make permanent the tax deduction for charitable contributions by individuals and corporations of real property interests for conservation purposes.

The first Talking Point covers FHA/Fannie and Freddie Reform. The second Talking Point covers Tax Reform and is followed by a Talking Point on the National Flood Insurance Program.

Another Victory Notched for Property Rights

RLI Makes Position Known on Tax Reform

The Supreme Court sided today with a Florida landowner who challenged terms for a state-issued permit for developing wetlands. The 5-4 decision in Koontz v. St. Johns River Water Management District is a major win for property rights supporters who believe the government has too much control over landowners in the permitting process. Advocates contend landowners deserve greater protections under the Fifth Amendment’s “takings clause,” which states that no private property may be taken for public use “without just compensation.” NAR helped develop and sign on to an Amicus Brief supporting Koontz, which stated that there should be some relationship between the amount of property being developed and what the local government asks for in return.

As you might know, the Senate is addressing tax reform that includes Tax Deferred 1031 Exchanges. RLI and The National Association of REALTORS® (NAR) developed a letter that specifically addresses the reforms being considered and ideas/viewpoints that would “spark a more prosperous and competitive economy.” Russell Riggs, RLI Government Affairs Liaison, distributed a draft of the letter to the Institute asking if RLI would like to be one of the “sign-on” organizations. After reviewing the letter, the RLI Government Affairs Committee members and the RLI Executive Committee suggested some modifications that specifically addressed land issues. These were added to the letter, and the Institute signed on to the correspondence. To view the communication sent to the Senate, visit the RLI website at www.rliland.com under the Government Affairs area.

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Koontz, of Orange County, Fla., sought to develop 3.7 acres that the St. Johns River Water Management District classified as a habitat protection zone and offered to place an additional 11 acres into a conservation easement in return for the permit. But state regulators asked him to do more, including reducing the size of the proposed development to 1 acre. Alternatively,

Feature the water district also said Koontz could move forward with his development as long as he hired contractors to make improvements to district-owned wetlands miles away. Koontz refused either of the terms, and his permit application was denied.

New Storm Water Rules Delayed Again The U.S. Environmental Protection Agency (EPA) announced on June 18 that a new post-construction storm water rulemaking has been delayed for a third time. Under a court order with the Chesapeake Bay Foundation (CBF), the EPA is required to develop and propose draft national regulations that control storm water runoff that contributes to pollution in waterways across the country. The latest deadline - now passed - had been set for June 10, 2013. The EPA and the CBF have not come to an agreement on a new schedule and terms for the storm water rulemaking effort. They have however, developed a near-term agreement that EPA and CBF will meet by July 18 to negotiate a path forward over a 60-day time period. NAR is concerned that any complex post-construction storm water regulations may result in an increase in housing prices and impose onerous and expensive requirements on homeowners and development.

• Sold over $2 billion of property over the last five years

About the author: In his position with the National Association of REALTORS®, Russell Riggs serves as RLI’s Government Affairs Liaison in Washington, D.C., conducting advocacy on a variety of federal issues related to land. Riggs will be a presenter at the 2014 National Land Conference in Charleston, South Carolina, taking place on March 12-14.

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U.S. Farm Real Estate Values Increase 9.4% Marc Schober, Director, Colvin & Company, LLP

The United States Department of Agriculture, (USDA) released its annual report for farm real estate, cropland, and pasture values earlier this month. Compared to 2012, average values for farm real estate, cropland, and pastures across the United States were up 9.4%, 13.0%, and 4.3% respectively.

Although the increase in U.S. farmland values has slowed, we still are seeing values rise, nonetheless, throughout the Midwest. Farmland is typically bought and sold post-harvest in fall and winter and we expect sale prices to continue to reach record highs, although the amount of irrational sales has significantly slowed down at local auctions.

The USDA reported U.S. cropland values, on average, increased by $460 per acre or 13.0% to $4,000 per acre. The largest year-over-year increase in cropland values was reported in the Northern Plains and Corn Belt regions. The Northern Plains jumped 25.0% to $2,950 per acre, while the Corn Belt rose 16.1% to $6,980 per acre. Of the ten regions the USDA uses to breakdown the United States, only the Southeast decreased (-2.8%) in cropland values over 2013.

When buying farmland, the future cash flows of the property are being purchased, not just the production potential of the upcoming season. That being said, commodity futures prices are still relatively high and technology is ever evolving to boost crop yields. Long-term demand still remains very strong for protein consumption derived from corn and soybeans grown across Americaâ&#x20AC;&#x2122;s Heartland.

Since 2009, cropland values across the United States have risen 49.8% to $4,000 per acre. For the same period, cropland values in the Northern Plains and the Corn Belt saw the largest increases at 126.9% and 78.5%, respectively. However, two regions have experienced declines in cropland values over the same period; the Southeast (-13.9%) and the Northeast (-1.1%). As detailed below, North and South Dakota saw the largest year-overyear increase in farm real estate values at 36.3% to $1,690 per acre and 26.6% to $1,800 per acre, respectively. New York and New Mexico saw the largest declines in value at -1.9% and -1.8%, respectively.

The national average value for farm real estate, which encompasses, all land and buildings used for agriculture production, increased to $2,900 per acre for 2013, up 9.4% from 2012. The Northern Plains region saw the largest percentage increase of 23.1%, while the Southeast region had no change. The highest farm real estate values were in the Corn Belt region at $6,400 per acre, while the Mountain region reported the lowest farm real estate values of $1,020 per acre. Average pasture value in the United States rose 4.3% over its 2012 value to $1,200 per acre. The largest decline in pasture value was reported in the Southeast region, which fell 1.5% from 2012 levels. The Northern Plains and Corn Belt regions saw the highest percentage increases in pasture value; with 18.4% and 9.2% changes respectively.

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To see the full USDA report, visit www.usda.gov/nass/PUBS/TODAYRPT/ land0813.pdf. About the author: Marc Schober is a Director at Colvin & Co. LLP and the editor of â&#x20AC;&#x153;Farmland Forecast,â&#x20AC;? the premier source for farmland and agriculture research. Farmland Forecast publishes research and news from around the agriculture sector including farmland value trends, agriculture company reports, farming practices, and other agricultural topics.

Member News

Rusty Lowe, ALC, broker associate, earned the CENTURY 21® System’s prestigious DOUBLE CENTURION® Award following his 2012 sales success. This award honors sales associates who achieve or surpass established sales production goals within a calendar year. This is the eighth year Lowe has earned CENTURY 21® CENTURION status.

Jeramy Stephens, ALC, broker and owner of Mossy Oak Properties of Stuttgart-Land and Auction Company received the national “Agent of the Year” award. This award recognizes the Mossy Oak Properties salesperson with the highest sales volume in the course of the year out of the Mossy Oak Properties network.

In addition, CENTURY 21® has named Lowe of CENTURY 21 Harvey Properties, #3 CENTURY 21 Commercial® Investment Network (CIN) Agent in the U.S. by Commercial production, including both sales and leases. Lowe has been named among the Top 100 Sales Associates in the nation in sales for 2012.

Benjamin Alder, ALC, was appointed as the CoChair of the Land Product Council for Sperry Van Ness International. In this role, Alder will serve as a liaison for Sperry Van Ness brokers in 165 offices covering 350 markets nationally to help serve land clients with their needs.

Clay Taylor, ALC, was presented with the Florida Land REALTOR® of the Year 2012 award by the REALTORS® Land Institute Florida Chapter. Annually, the RLI Florida Chapter recognizes one member whose work furthers the interest of fellow Institute members, the land real estate profession, and the community. Taylor has served as the RLI Florida Chapter treasurer for five consecutive years, and has earned multiple sales awards from Caldwell Banker Commercial. Richard Dempsey, ALC, was inducted into the Florida REALTORS® Honor Society. Florida REALTORS® established an Honor Society to recognize active members in their state association for participation at the local and national levels of the REALTOR® organization. He is a past president of the Lakeland Association of RELATORS®, a past chairman of the RPAC Committee, was the 2012 Florida Realtors® District 10 Vice President, and serves as the Federal Political Coordinator for U.S. Congressman Dennis Ross. Dean Saunders, ALC, land broker/owner of Coldwell Banker Commercial Saunders Real Estate and partner with Coldwell Banker Commercial Saunders Ralston Dantzler Realty, earned The Florida Gulf Coast Association of REALTORS® (FGCAR) and the Central Florida Commercial Association of REALTORS® (CFCAR) “Top Producer” awards for sales performance in several categories: • FGCAR PINNICLE AWARD #1 Top Producer National Division • CFCAR HALLMARK AWARD Overall Top Producer - Land • CFCAR HALLMARK AWARD Overall Top Producer - Polk County, FL Chuck Hawley, ALC, was awarded the Daughters of the American Revolution’s (DAR) “Community Service Award,” both at the County and State of Maryland levels for his work as an organizer and team leader for Frederick Habitat’s Disaster Relief Missions Team. As a leader in the organization, Hawley has organized and participated in 16 weeks of disaster relief since March 2006. He has helped re-build communities in New Orleans, Jackson, Gulfport, Biloxi, Bay St. Louis, Waveland, Tuscaloosa, and Union Beach.

Bill Eshenbaugh, ALC, CEO of Eshenbaugh Land Co., was featured in Florida’s Business Observer. Eshenbaugh has over three decades of experience as a land broker and has received the Florida Gulf Coast Commercial Association of Realtors’ “Land Deal of the Year” award for the past four years. Russ Russell, ALC, has the distinction of being the only professional in the nation to have earned the ALC, SIOR, CCIM and CEA designations. Russell is a lifelong learner who continues to add to his knowledge. He attended LANDU Week and participated in Essentials of Negotiations, Practical Navigation for the Land Professional, and Agricultural Land Brokerage and Marketing. Dr. Mark Levine, ALC, Endowed Chair, Franklin L. Burns School of Real Estate and Construction Management, has been a real estate broker, attorney, investor and professor for more than 40 years, lecturing throughout the U.S. and internationally. He is a two-time Fulbright Scholar to China, has written 52 books and more than 300 articles. His book, International Real Estate, is used as a source in colleges and organizations. Levine was recently named as Trustee for the Appraisal Foundation. Steve Anderson, ALC, has been certified by the Texas Real Estate Commission to teach courses. Anderson developed a one-hour Texas MCE course, Want To List or Sell Land, a basic introduction to the land business. He also is certified to teach Brokers Responsibility and Legal and Ethics in Texas. Anderson is a member of the Texas Real Estate Teachers Association. Dan Hatfield, ALC, 2010 RLI National President, was inducted as the 2014 Chair of the Texas Association of REALTORS® (TAR)—which has over 80,000 members-- on September 7 in Dallas, Texas. Hatfield has also served as the chairman of the 2012 Land Use, Property Rights, and Environment Committees with NAR and is a past president of the RLI Texas Chapter. Hatfield is Vice President of Texas Homestead Real Estate.

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Member News Ray Brownfield, ALC, participated in the Northern Illinois 12th annual Heritage Tractor Adventure. Brownfield with his 1942 Farmall participated in this threeday adventure, traveling on country roads averaging 60-70 miles per day. George Clift, ALC, was presented with the Owen W. Sherrill Award at the A&M 23rd Annual Outlook Land Markets Conference in San Antonio, TX. The Award honors a REALTOR® who has contributed to the overall positive image of an outstanding, professional Texas Farm and Land Broker. This award was instituted in 1976 to honor the First President and Organizer of Texas REALTORS® Land Institute Chapter #22, Owen W. Sherrill. Illinois Fracking Task Force

Four RLI members, Mac Boyd, ALC, Allan Worrell, ALC, David Klein, ALC, and Kent Kraft, (left to right) were selected by the Illinois Association of REALTORS (IAR) to participate in a Fracking Task Force. Their main objective is to develop a position statement for the membership of the IAR on fracking, as it continues to be a strong force in U.S. Energy.

ALCs Inducted into the RPAC Hall of Fame Dan Bock, ALC; Mac Boyd, ALC; and Ben Crosby, ALC, (left to right) were inducted at the NAR 2013 Midyear Meetings held in May to the National Association of REALTORS® RPAC Hall of Fame. RPAC is the “voice of REALTORS® on Capitol Hill.” The NAR Hall of Fame recognizes dedicated members whose RPAC investments total an aggregate lifetime amount of at least $25,000. Bock, Crosby, and Boyd’s names are displayed on the rooftop of the NAR Building in Washington, DC. Members Selected to Present at the 2013 NAR Conference

Nancy Surak, ALC, Jon Hjelm, ALC, John McAllister, ALC, and Bill Sheridan (left to right) have been selected to be presenters at the 2013 REALTORS® Conference and Expo which takes place on November 8-11, 2013, in San Francisco, CA. Surak will be discussing Transitional Land: Current Trends in Use and Markets on November 7. Hjelm’s presentation, Real Estate Auctions—The Real Deal, will take place on November 8 at the Convention Center. Also on November 8, McAllister and Sheridan will cover Mission Possible: Make Money With Referrals.

A Proud Sponsor of RLI Uniting affluent buyers with distinguished land professionals since 1992

www.FARMAndRAnCH.CoM FnR_Hp_ADforRLI.indd 1

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Member News

ALC Code of Conduct

In this centennial anniversary of the Code of Ethics of the National Association of REALTORS速, RLI recognizes and reinforces the importance of following the values set forth in this document. With this spirit in mind, the RLI Board of Directors has approved a ten-point ALC Code of Conduct. A code of conduct is a set of principles that guide decision making and behavior. The purpose of the code for Accredited Land Consultants (ALCs) is to provide guidelines for making ethical choices in the conduct of their work. Professional integrity is the cornerstone of credibility reflecting high principles and standards of practice. RLI is proud of ALCs who bring the highest level of integrity to the business of land.

Preamble Accredited Land Consultants (ALCs) are honorable land professionals who recognize the importance of land to life. ALCs share in the responsibility to conduct themselves with high morals following the ALC Code of Conduct and the Code of Ethics of the National Association of REALTORS速. ALC Code of Conduct

1. Protect and promote the best interest of clients 2. Display high moral and professional standards 3. Avoid exaggeration and misrepresentation of relevant facts 4. Treat all with honesty and respect 5. Stay current in industry knowledge and trends

6. Enhance the integrity and professionalism of the industry 7. Cooperate with fellow real estate professionals 8. Follow local, state, and national laws regarding disclosure 9. Will not condone or participate in discriminatory practices 10. Support, understand, and champion institute policies

The following ALCs have signed the ALC Code of Conduct for 2013: Andrea Anderson Stephen Anderson Sage Andress Eric Andrews James Anselmi Jesse Armistead Stan Armstrong Christina Asbury Bob Bahe Sandra Bahe William Barnett Terry Bickel William Blalock Robert Bole R. Max Boots Max Brand Alan Bridevaux Edwin Broussard Ray Brownfield Robert Bugg Patricia Burns Sheelah Clarkson George Clift William Crenshaw R. Mark Crews Benjamin Crosby Candace Cummings Ball John Dean Richard Delisle Andrew DeSalvo Cal Dickson

Robert Dikman Marty Domres Don Ellers Stephen England Rick Epperson James Erlandson William Eshenbaugh Wade Fitzgerald Karen Fried Dale Fulk Edgar Gaddis Charles Gayre John Gibbs Gary Giles Kirk Goble Richard Gonzalez Aaron Graham Alan Grimm Kyle Hansen Charles Hawley Howard Haynie Roger Heller Hunt Hellums John Herbert David Hitchcock Jon Hjelm John Hopkins Ryan Hostetler Alan Howard Gerald Huffman William Hugron Marvin Huntrods

Darrell Hylen Larry Ilfeld Franklin Jamison Terri Jensen Ivan Judd Samuel Kain Patrick Karst Dan Kevorkian Robert King Craig King David Klein Michael Konstant Donald Kracke Mike Kuppenbender Zurick Labrier Michael Landreth Jesse Lane Charles Lathem John Leezer Mark Lewis Alexander Long Jorge Loredo Troy Louwagie Michael Lunn Brad Lyle Fletcher Majors Paul Marsh Curtis Marshall Gordan Martin John McAllister John McCrocklin Daniel McFadden

Mike Mcginnis Philip McGinnis Eric Mcsweeney Brian Meece James Menzer Rick Merrill Barton Miller David Milton Mark Mommsen R. Michael Moore G. Kent Morris LeeAnn Moss Kevin Murray Thomas Niewohner Jerry Norwood Wayne Novotny Luke Olson Leah Olson Carl Olson, Sr. Glenn Parks Yvonne Perkins Ellen Peric Jeff Ratliff Roger Rebman Bob Reese Todd Renfrew Frank Rock Henry Rogers William Rollins Dennis Saffell Dean Saunders Florence Sayre

Eric Schlutz Daniel Smith Thomas Smith A. Souza Jeramy Stephens Michelle Stone Winnie Stortzum John Taylor William Taylor Douglas Terry Tim Thomas Glenn Thomas William Throne Bob Turner David Vanderlaan Jeffery Waddell Jerry Wallace Dan Ward Keith Waterman Kirk Weih Eric West Craig Wetterlund Judson Wilhoit David Williams Charles Wingert Robert Wood Allan Worrell Daphne Zollinger

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Member News

Our goal at the REALTORS® Land Institute is to be bigger and better! When membership grows, so does the strength of the organization. That is why we are asking for help from our wonderful members. As an Ambassador, all we ask is for you to share information about the benefits of RLI and the value of the prestigious Accredited Land Consultant designation with your peers and colleagues. Our Way of Saying “Thank You” In addition to helping strengthen the Institute, each member that you recruit gets you an entry into a drawing for these prizes. The deadline to be eligible for the below prizes is December 31, 2013. 

American Express Gift Card ($100)



1/4 Page Advertisement in TERRA FIRMA ($300 value)



Charleston Carriage Tour at the 2014 National Land Conference ($34 value)



LANDU Gift Card ($100 to put toward a course of your choice)

A special thank you to the following Ambassadors who have brought valuable new members to the Institute: Andrea Anderson, ALC Deitra Robertson, ALC John Rupp, ALC

Sam Kain, ALC

Ben Crosby, ALC

Eric Schlutz, ALC

J R Larsen, ALC

Stephen Ferrandi, ALC Roger Johnson

Matt Adams

Bill Eshenbaugh, ALC

Terri Jensen, ALC

Lou Jewell, ALC

Steve Anderson, ALC

Garrett Zoller

Terry Pauling

Brent McMillan, ALC

Flo Sayre, ALC

Mac Boyd, ALC

Tom Smith, ALC

Hines Boyd

Tom Morse

Cathy Cole, ALC

Frank Roberts, ALC

Norma Nesbit, ALC

Troy Louwagie, ALC

J.P. King

Dan Hatfield, ALC

George Clift, ALC

Randy Hertz, ALC

Virgil George, ALC

John Walenciak

Dave Milton, ALC

Jerry Norwood, ALC

Ray Brownfield, ALC

Eric Clark

Joseph Presley

David Jirasek, ALC

Jon Hjelm, ALC

Richard Wood, ALC

Brian Rose

Paul Gonwa

Dean Saunders, ALC

John Dean, Jr., ALC

Robert Bahe, ALC

Dan Perez

Scott Brummel

Dave Banzhaf

Steve Bruere

*Steve Anderson, ALC, of Anderson Realty Co., Lipan, TX, was the winner of RLI’s Summer Ambassador Drive. He won a Free Registration to the 2014 National Land Conference for bringing in five new members between June 1- August 31. Steve is making a difference! 430 North Michigan Ave. Chicago, IL 60611 Phone: 800.441.5263 | Fax: 312.329.8633 | E-mail: rli@realtors.org www.rliland.com

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Feature

WHY SIMPLY HELPING FUTURE CLIENTS IS THE RIGHT APPROACH TO SELLING Frank Belzer, Vice President of Corporate Training

Kurlan and Associates The Beatles said it this way, “Help, I need somebody. Help, not just anybody. Help, you know I need someone. Help.” Has it ever occurred to you that most prospects are really just asking the same thing? Typically, regardless of what you sell or what you do, it is going to be in response to someone’s need for help. When that need goes away and people no longer need your help, you are probably out of business! Conversely the higher the dollar amount and the less your prospects know about your particular field – the more they need your help. I work with sales professionals all over the world and one of the most interesting exercises involves developing and creating dialogue around a number of help statements. These statements can be utilized at all stages of the sale and will help differentiate you, uncover real needs, build the relationship and create urgency. That said, too many sales people, including realtors and brokers still struggle and have difficulty describing what they do in the context of helping people. They end up talking way too much about the product and the deliverables (the property, the geography and the location) and there is no time for a help-based discussion. I put together the acronym for H.E.L.P below which might assist us in keeping its importance top-of-mind. H - Hired – Basically every prospect is going to hire you; therefore, it isn’t about the product or service. Like an interview, 80% of the decision is how they feel about working with you. If they see you as a viable partner and get a good vibe about you, they are more likely to want you to join their team. E - Expert – Now, more than ever before, potential clients want to believe that they are dealing with a credible expert, not just a “representative”. They want to know that you know your material and can help them more than anyone else. L - Long-term – Although selling is harder than ever, if done right, the people who decide to work with you will be focused on a long-term and strategic partnership. Price shoppers and tire kickers will be the type of prospects with whom you decide not to work. P - Professional – There was a time when realtors (sales people) could be crusty, rough around the edges and not as proficient or familiar with business matters and it would be written off as “Oh well, they are just the realtor.” Those days are gone and there is a need for all sales people to be more professional, maybe more professional even than everyone else in their company. Even if a company has a relaxed or casual culture, your prospects expect to deal with someone who makes them feel comfortable and secure. When we talk in terms of helping people, the end result is that prospects feel like we are customizing every solution to them, and that is a good thing. One size does not fit all from the prospect’s point of view. When you meet with a prospect and before you can start helping them, they need to feel a certain way about you and your agency. There are 3 demands and expectations which I believe buyers and the market are expecting in this day and age. We can categorize

these as “3 C’s” which might make them easier to remember. They are Customization, Collaboration and Creativity: Customization – Regardless of how transactional or commoditized your sale, the buyer expects to be treated as an individual. They expect to feel as if your offering, product or service has been designed just for them - even if it isn’t or hasn’t. Just think about Amazon.Com or Zappos.Com. They have forced a paradigm shift whereby Amazon remembers me and Zappos cares about my satisfaction more than anyone else. Both are perceptions, of course. Just imagine how much more important that is they are considering a three million dollar land parcel – not a pair of shoes or a book. Collaboration – People today do not want to be told what to do and neither do they want to do it all themselves. They want you be part of their team. When they see value in you, their next questions have to do with things like, “How well will they work with my people? How disruptive will this process be? Do I feel any synergy?” Yes purchasing a large piece of property is a big and personal decision – that doesn’t mean that they don’t want your opinion. Creativity – This is perhaps the most unexpected of the three; but that said, perhaps one of the most important. People are (and always have been) buying the realtor as a professional first and then the company they represent and finally the property. With so much information readily available online, they know the basics and they know what to expect from working with a company like yours. What they are hungry for is some creative solutions outside of that information. They are yearning to hear your vision, expectations and ideas as to how to do something different and unexpected. • • • • •

With these in mind, ask yourself the following questions: Are we implementing the 3 C’s across our brokerage? What would need to change for us to do that? How would our sales process change? What feedback could we expect from customers and prospects if we were to implement this?

The challenge with this kind of sale is no different than that of large corporations with an international sales presence and hundreds of representatives. It’s really easy to focus on selling the technology, company or product, but that would result in a presentation which would be a huge mistake. Potential clients don’t need presentations! They need to see your value before they’ll buy into anything else. The software is almost always the same everywhere, so it’s absolutely a question of “Why you?” Easier said than done, right? The “why you” question is a vital question to answer in the world of real estate sales – how many times does the buyer come from over sea’s or another part of the country? They are choosing a person to help them and not a company. The secret to selling your own value involves peeling back the onion to get to the real reason, the one that lies behind the reason why someone is speaking with you. Buyers sometimes start with the shallowest of reasons and if we leave it at that, there’s no value to add and they don’t buy “you”. Let’s look at an example: Suppose a lead has entered the funnel and they’re interested in getting some help purchasing land that will be developed into a golf course:

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Feature Layer One: Shallow Rep: “Tell me more about your needs. What are you hoping to accomplish with this purchase? Prospect: “We just need to get some help finding some property. We’ve have investors and it is time to start moving on this.” Layer Two: Deeper Rep: “Typically, there’s a conversation, which happens internally with those investors, that leads to our talking. Could you tell me more about that?” Prospect: “My investors are frustrated that we have not found the right piece of property yet, they think it is taking too long.” Layer Three: Deeper Yet Rep: “And that time amounts to how much? A ballpark is fine.” Prospect: “I would have to say we have been looking for 8 months” Layer Four: Deep Rep: “This has been going on for 8 months and you’re only speaking to me now? Why didn’t we talk 4 or 5 months ago?” Prospect: “We felt like we could handle this search ourselves but apparently not, we need to change the approach.” Too many realtors would stop after the first answer. It sounds good, might be enough. But is it really? In our example, think about how much more we might know after all 4 questions have been asked. Some factors, however, make this line of questioning tough for the average sales person: 1.

The prospect says “What can you do?” or “Tell me how you would help me with ____.”

The prospect seems very familiar with our space, and as reps, we think that it’s time to impress them with our knowledge.

The prospect cuts to the chase to let you know that they’re talking to your competition.

The prospect is a difficult person with whom to bond or develop any relationship.

Of course, you’re not limited to 4 layers. You should go as deep and wide as you can with your questioning so that you can really understand why the prospect might need your help. As you go through this process with your prospects, they’ll see you differently, understanding why they should buy “you”, and they will! I probably write more about questioning and listening skills than anything else – for good reason. Time and again I’m either asked to help with these skills or while working with a client I’ll uncover the fact that they need help. It’s a frequent source of prospect and client angst when

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they are dealing with a sales person – “he didn’t listen to a word I said”. Most salespeople know that they should be listening. They know that the right thing to do is to listen and that the wrong thing to do is to talk and yet almost inexplicably it happens; verbal diarrhea. You’re thinking “Well that’s not me, usually the problem is not that I fail to listen at all - just that I am not listening enough.” So think about how even not listening enough can have a direct impact on sales and revenue. All of these techniques provide meaningful ways to actually help your potential clients and become far more in their eyes than someone that can merely locate acreage or property – the internet can do that! It is no longer enough to simply add or sell value, as a broker or agent you need to be the value and that value will be demonstrated by the quality of your conversations. About the author: Frank Belzer, Vice President of Corporate Training at Kurlan and Associates, guides companies to be effective in their sales and overall “go to” market strategies. His blog, “The Sales Archaeologist, draws on lessons from history and applies them to sales and business leadership. Belzer is the author of Inbound Marketing. Belzer was a presenter at the 2013 National Land Conference.

Feature

Climate Change and Agriculture in the United States: Effects and Adaptation Report The report was produced as part of a collaboration between the U.S. Department of Agriculture, the University Corporation for Atmospheric Research, and the National Center for Atmospheric Research under USDA cooperative .

Key Messages from the Report: Executive Summary Increases of atmospheric carbon dioxide (CO2), rising temperatures, and altered precipitation patterns will affect agricultural productivity. Increases in temperature coupled with more variable precipitation will reduce productivity of crops, and these effects will outweigh the benefits of increasing carbon dioxide. Effects will vary among annual and perennial crops, and regions of the United States; however, all production systems will be affected to some degree by climate change. Agricultural systems depend upon reliable water sources, and the pattern and potential magnitude of precipitation changes is not well understood, thus adding considerable uncertainty to assessment efforts. Livestock production systems are vulnerable to temperature stresses. An animalâ&#x20AC;&#x2122;s ability to adjust its metabolic rate to cope with temperature extremes can lead to reduced productivity and in extreme cases death. Prolonged exposure to extreme temperatures will also further increase production costs and productivity losses associated with all animal products, e.g., meat, eggs, and milk. Projections for crops and livestock production systems reveal that climate change effects over the next 25 years will be mixed. The continued degree of change in the climate by midcentury and beyond is expected to have overall detrimental effects on most crops and livestock. Climate change will exacerbate current biotic stresses on agricultural plants and animals. Changing pressures associated with weeds, diseases, and insect pests, together with potential changes in timing and coincidence of pollinator lifecycles, will affect growth and yields. The potential magnitude of these effects is not yet well understood. For example, while some pest insects will thrive under increasing air temperatures, warming temperatures may force others out of their current geographical ranges. Several weeds have shown a greater response to carbon dioxide relative to crops; understanding these physiological and genetic responses may help guide future enhancements to weed management. Agriculture is dependent on a wide range of ecosystem processes that support productivity including maintenance of soil quality and regulation of water quality and quantity. Multiple stressors, including climate change, increasingly compromise the ability of ecosystems to provide these services. Key near-term climate change effects on agricultural soil and water resources include the potential for increased soil erosion through extreme precipitation events, as well as regional and seasonal changes in the availability of water resources for both rain-fed and irrigated agriculture. The predicted higher incidence of extreme weather events will have an increasing influence on agricultural productivity. Extremes matter because agricultural productivity is driven largely by environmental conditions during critical threshold periods of crop and livestock development. Improved assessment of climate change effects on agricultural productivity requires greater integration of extreme events into crop and economic models. The vulnerability of agriculture to climatic change is strongly dependent on the responses taken by humans to moderate the effects of climate change. Adaptive actions within agricultural sectors are driven by perceptions of risk, direct productivity effects of climate change, and by complex changes

in domestic and international markets, policies, and other institutions as they respond to those effects within the United States and worldwide. Opportunities Storm gathers over farmland. Image courtesy UCAR. for adaptation are shaped by the operating context within which decisionmaking occurs, access to effective adaptation options, and the capacity of individuals and institutions to take adaptive action as climate conditions change. Effective adaptive action across the multiple dimensions of the U.S. agricultural system offers potential to capitalize on emerging opportunities and minimize the costs associated with climate change. A climate-ready U.S. agriculture will depend on the development of geographically specific, agriculturally relevant, climate projections for the near and medium term; effective adaptation planning and assessment strategies; and soil, crop and livestock management practices that enhance agricultural production system resilience to climatic variability and extremes. Anticipated adaptation to climate change in production agriculture includes adjustments to production system inputs, tillage, crop species, crop rotations, and harvest strategies. New research and development in new crop varieties that are more resistant to drought, disease, and heat stress will increase the resilience of agronomic systems to climate change and will enable exploitation of opportunities that may arise. Over the last 150 years, U.S. agriculture has exhibited a remarkable capacity to adapt to a wide diversity of growing conditions amid dynamic social and economic changes. These adaptations were made during a period of relative climatic stability and abundant technical, financial and natural resources. Future agricultural adaptation will be undertaken in a decision environment characterized by high complexity and uncertainty driven by the sensitivity of agricultural system response to climatic variability, the complexity of interactions between the agricultural systems, non-climate stressors and the global climate system, and the increasing pace and intensity of climatic change. New approaches to managing the uncertainty associated with climate change, such as integrated assessment of climate change effects and adaptation options, the use of adaptive management and robust decision-support strategies, the integration of climate knowledge into decision making by producers, technical advisors, and agricultural research and development planning efforts, and the development of resilient agricultural production systems will help to sustain agricultural production during the 21st century. Climate change poses unprecedented challenges to U.S. agriculture because of the sensitivity of agricultural productivity and costs to changing climate. View the full report at http://www.usda.gov/oce/climate_change/effects.htm. This document cited as: Walthall, C.L., J. Hatfield, P. Backlund, L. Lengnick, E. Marshall, M. Walsh, S. Adkins, M. Aillery, E.A. Ainsworth,C. Ammann, C.J. Anderson, I. Bartomeus, L.H. Baumgard, F. Booker, B. Bradley, D.M. Blumenthal, J. Bunce, K. Burkey, S.M. Dabney, J.A. Delgado, J. Dukes, A. Funk, K. Garrett, M. Glenn, D.A. Grantz, D. Goodrich, S. Hu, R.C. Izaurralde, R.A.C. Jones, S-H. Kim, A.D.B. Leaky, K. Lewers, T.L. Mader, A. McClung, J. Morgan, D.J. Muth, M. Nearing, D.M. Oosterhuis, D. Ort, C. Parmesan, W.T. Pettigrew, W. Polley, R. Rader, C. Rice, M. Rivington, E. Rosskopf, W.A. Salas, L.E. Sollenberger, R. Srygley, C. StĂśckle, E.S. Takle, D. Timlin, J.W. White, R. Winfree, L. Wright-Morton, L.H. Ziska. 2012. Climate Change and Agriculture in the United States: Effects and Adaptation. USDA Technical Bulletin 1935. Washington, DC.

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IFIFLAND LANDCOULD COULDTALK TALK 2014 National Land Conference

National The Historic2014 Francis MarionLand Hotel,Conference Charleston, S.C. The Historic Francis Marion Hotel, Charleston, S.C. March 12-14, 2014 March 12-14, 2014

SCHEDULE OFOF EVENTS SCHEDULE EVENTS See y’all Charleston, S.C. S.C. where thethe best-in-the-land Seeiny’all in Charleston, where best-in-the-land business will learn, network, andand make deals! business will learn, network, make deals!

WEDNESDAY, MARCH WEDNESDAY, MARCH 12 12 PRE-CONFERENCE PRE-CONFERENCE

Institute Committee and Board Meetings Institute Committee and Board Meetings 8:00 am–8:45 am (concurrent meetings) 8:00 am–8:45 (concurrent meetings) • RLIam Government Affairs Committee • RLI Government Committee • RLI ALCAffairs Designation Committee

• RLI ALC Designation Committee

9:00 am–9:45 am (concurrent meetings)

9:00 am–9:45 (concurrent meetings) • RLIam Education Committee • RLI Education Committee • Future Leaders Committee • Future Leaders Committee 10:00 am–Noon

10:00 am–Noon

RLI Board of Directors Meeting

2013 CONFERENCE BEGINS

2013 CONFERENCE BEGINS PRESENTATION EXCLUSIVELY FOR ALCS

– 11:50 am Barstool with Economists 11:30 11:30 am – am 11:50 am Barstool ChatChat with Economists Moderator, Turner, ALC, Moderator, BobBob Turner, ALC, Vice President 20142014 RLI RLI Vice President Celebration Time…Come On!!

Celebration Time…ComeRLI’s On!!70th Anniversary Luncheon Noon – 1:15 pm Noon – 1:15 pm RLI’s 70th Anniversary Luncheon Doin’ What Comes Naturally

Doin’ 1:30 What Naturally amComes – 2:15 pm What REALTORS® Need to Know about 1:30 am – 2:15 pm What Need toConservation Know about theREALTORS® Natural Resources the Natural Service Resources Conservation Service Leonard Jordan LeonardAssociate Jordan Chief for Conservation USDA Natural Resources Associate Chief for Conservation Conservation Service USDA Natural Resources Conservation Service As Hot as a $2 Pistol

2:15 – 3:00 pm $1 Million, now $2 Million…Making As Hot aspm a $2 Pistol Auctionsnow Work You! 2:15 pm – 3:00 pm $1 Million, $2For Million…Making Stephen Karbelk, CAI, AARE PRESENTATION FOR ALCSDifferentiate 1:00 pm – 1:45 pm EXCLUSIVELY Build by Association! Auctions Work For You! Co-Chairman and Founder Your Brand with the ALC Stephen Karbelk,LLC CAI, AARE 1:00 pm – 1:45 pm Build by Maria Association! Differentiate AmeriBid, Elena Duron Co-Chairman andLand Founder Your Brand CEO withand theSpeaker ALC 3:00 pm – 3:45 pm Google Earth for Development AmeriBid, LLC Maria ElenaBuzz2Bucks Duron Professionals Word of Mouth Firm 3:00 pm – 3:45 pm Google for Land Development CEO and(separate Speaker registration) Eric Earth Pimpler Professionals President Buzz2Bucks Word of Mouth Firm Eric Pimpler Geospatial Training Services registration) 2:00 pm–4:45 pm(separate Conference Registration & Exhibits Open 4:15 pm – 4:55 pm President A New Ranch and Recreation 2:00 pm–4:45 pm Partner Exhibit Visits Investment Training Fund: Turning Distressed Geospatial Services 5:00 pm Citadel Color Guards and Pipes 2:00 pm–4:45 pmpm–5:30Conference Registration & Exhibits Open intoRanch Delightful Charleston Where History Lives–Welcome 4:15 pm – 4:55 pm A New and Recreation 2:00 pm–4:45 pm Partner Exhibit Visits Jay Ellis Wil Riley, President of Trident Investment Fund: Turning Distressed 5:00 pm–5:30 pm Citadel Color Guards and Pipes Founder and General Partner Association REALTORS® into Delightful Charleston Where HistoryofLives–Welcome Sporting Ranch Capital Greetings and Recognition Event Jay Ellis Wil Riley, President of Trident ® George Clift, ALC--2014 Founder and General Partner Association of REALTORS® REALTORS Be in High Cotton Land Institute National President Capital Greetings and Greet, Recognition Event Concurrent SessionsSporting (Choose Ranch one to attend) 5:45 pm – 6:15 pm Meet, and Market ® George Clift, ALC--2014 REALTORS 5:00 pm – 5:45 pm Using Search Engine Marketing in Your Open to all registered conference Be in High Cotton Land attendees. Institute National President Business Come prepared with a Concurrent Sessions (Choose to attend) 5:45 pm – 6:15 pm Meet, Greet, and Market Myersone Jackson, CAI, AARE, CES, ATS “one-minute” elevator speech about Using Search Engine Marketing in Your Open to all conference Real Estate Auction Specialist youregistered and your business. Bring marketing 5:00 pm – 5:45 pm Business United Country Certiﬁed Real Estate attendees. Come and prepared a materials plenty with of cards. Jackson, CAI, AARE, ATSYour 5:00 – 5:45 pm Myers Brand Yourself! Build andCES, Bolster “one-minute” elevator speech about 6:30 pm – 8:00 pm Bourbon and Boots Business Real Estate Auction Specialist 2014 RLI President’s Inaugural Reception you and your business. Bring marketing Maria Elena Duron United Country Certiﬁed Real Estate materials and plenty of cards. CEO and Speaker 5:00 – 5:45 pm Brand Yourself! Build and Bolster Your 6:30 pm – 8:00 pm Bourbon and Boots Buzz2Bucks Word of Mouth Firm THURSDAY, 13 Business 2014 RLI President’sMARCH Inaugural Reception 5:00 – 5:45 pm Maria Timber TBA ElenaTopic Duron 5:45 pm – 6:15 pm Mosey over to the Partner Exhibits Rise and Shine CEO andonSpeaker 7:00 am – 7:45 am Continental Breakfast Buzz2Bucks Word of Mouth Firm Goin’ Once, Goin’ Twice, Sold! 8:00 am – 8:10 am Mornin’ Everyone 5:00 –6:30 5:45pm pm– 7:45 pmTimber TBACowboy Auction On Earth RLI'sTopic Greatest John McAllister, ALC, 2014 National 5:45 pm – 6:15 Mosey on over to the Partner Exhibits Rise and Shine 7:45 pm pm Dinner on Your Own—Enjoy Land Conference Chair 7:00 am – State 7:45 am Charleston Cuisine of the Continental Economy Breakfast Goin’ Once, Goin’ Twice, Sold! 8:00 am – 8:10 8:10 am am– 9 am Mornin’ The Everyone Economic Outlook for 2014 6:30 pm – 7:45 pm RLI's Greatest Cowboy Auction On Earth John McAllister, ALC, 2014 National William Emmons, PhD Dinner on Your Own—Enjoy FRIDAY, MARCH 14 Land Conference Chair Assistant Vice President and Economist 7:45 pm Charleston Cuisine Federal Reserve Bank of St. Louis State of the Economy Southern Hospitality amEconomic The One-and-Only Conway and 8:10 am – 9:00 9 amam – 9:45 The Outlook forKC 2014 7:15 am – 8:30 am Hot Topic Breakfast Round Tables EconomicsPhD William Emmons, About South Carolina Peanuts KC Conway Assistant Vice President and Economist AGLAND Trends ExecutiveBank Managing Federal Reserve of St. Director Louis of On the Fracking Edge Real Estate Analyticsand SouthernT Hospitality 9:00 am – 9:45 am The One-and-Only KC Conway IMBER 7:15 am –Generational 8:30 am Hot Topic Breakfast Round Tables Economics Colliers International Differences and Connections 9:45 am – 10:30 am Entertaining Insights in the Energy AboutRedevelopment South Carolina Peanuts KC Conway Sector: From Red-Hot to Luke-Warm AGLAND Trends Tactics for Land Auctions Executive Director DetlefManaging Hallermann, PhD of On the Fracking Edge Market The International Real Estate Analytics Associate Clinical Professor, and the Land Business T I MTechnology BER Colliers International Department of Finance Land Values: The Appraiser’s Role Generational Differences and Connections 9:45 am – 10:30 am EntertainingTexas Insights the Energy A&MinUniversity Tapping Into the RLI Tools Redevelopment Sector: From Red-Hot to Luke-Warm 10:45 am – 11:15 am Farmland: More Room to Run? Teaming with Canada Tactics for Land Auctions Detlef Hallermann, Brent Gloy, PhD Government Affairs The International Market Land Income Producing Opportunities Professor Agriculture Economics Associate ClinicalofProfessor, Technology and the Land Business Art ofThe Repositioning orRole of Positioning Purdue University Department of Finance Land The Values: Appraiser’s 11:15 am – 11:30Texas am Partner Exhibit Visits A&M University Tapping Into the RLI Tools 10:45 am – 11:15 am Farmland: More Room to Run? Teaming with Canada Brent Gloy, PhD Government Affairs Land Income Producing Opportunities Professor of Agriculture Economics The Art of Repositioning or of Positioning Purdue University 11:15 am – 11:30 am Partner Exhibit Visits

THURSDAY, MARCH 13

FRIDAY, MARCH 14

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The Business Business Environment The Environment Northwest Southeast Northwest Southeast Southwest Northeast Southwest Northeast Midwest Midwest Tips for Entrepreneurs Tips for Entrepreneurs Peanuts and South Carolina Peanuts and South Carolina Opportunity Knocks

Opportunity Knocks 8:30 am – 8:45 am Say Good Morning to our Partners 8:30 am The SayWorld Good is Morning to ourHow Partners 8:45am am –– 8:45 9:40 am Your Oyster... are 8:45 am – 9:40 am You TheGoing WorldtoisShuck Your it? Oyster... How are You Going David Wyantto Shuck it? David Wyant Owner and Instructor Across School of Real Estate OwnerBorders and Instructor 9:30 am – 10:15 am Hydraulic Regulations AcrossFracturing: Borders School of Realand Estate 9:30 am – 10:15 am Risks Hydraulic Fracturing: Regulations and Samuel Risks Boxerman, Esq. Partner Samuel Boxerman, Esq. Environmental Practice Group of Partner Sidley Austin LLP Environmental Practice Group of 10:15 am – 10:45 am 1031 Exchange Applications that Benefit Austin LLP Real Estate LandSidley Owners and Their 10:15 am – 10:45 am Brokers 1031 Exchange Applications that Benefit Land Owners and Their Real Estate James Miller, Esq. Brokers Senior Vice President; Attorney and James Miller, Esq. Manager – Southwest Region Senior Vice President; Attorney and Investment Property Exchange Services, (IPX1031) Region ManagerInc. – Southwest 10:45 am – 11:00 am Thank our Partner Exhibitors Investment Property Exchange Services, Inc. (IPX1031) RLI Has 10:45 ama–Voice 11:00 am Thank our Partner Exhibitors 11:00 am – 11:20 am Our Man on the Hill

Russell Riggs, Government Affairs RLI Has a Voice of the Association 11:00 am – 11:20 am OurLiaison Man on theNational Hill of REALTORS®. Russell Riggs, Government Affairs Roots of American MusicLiaison of the®National Association of REALTORS 11:20 am – Noon Magnolia Singers . Participate in the universal music of

Roots of American Music Gullah through which jazz, blues, and 11:20 am – Noon Magnolia Singers ragtime have their roots. Participate in the universal music of Gone Fishin’ Gullah through which jazz, blues, and Noon Conference Adjourns ragtime have their roots. Terri Jensen, 2014 RLI President-Elect

Gone Fishin’ ACTIVITY Noon POST-CONFERENCE Conference Adjourns Terri Jensen, 2014 RLI President-Elect March 14 2:00 pm – 5:00 pm

Charleston Carriage Tour

POST-CONFERENCE ACTIVITY (separate registration)

March 14

Limited space available

2:00 pm – 5:00 Tour pm Charleston Carriage Tour Companion (separate registration) March 13 Limited space available 10:30 am – 4:00 pm Companion Plantation Tour (Includes Box Lunch)

Companion Tour (separate registration) Limited space available March 13

10:30 am – 4:00 pm Companion Plantation Tour Schedule is subject to(Includes change. Box Lunch) (separate registration) Limited space available Schedule is subject to change.

Host Hotel:

The Francis Marion Hotel: 387 King Street, Charleston, S.C. 29403 (conference rate upon availability) For reservationsHost call 843.722.0600 Hotel: and ask for Land Institute the REALTORS The®Francis MarionConference Hotel: Rate (Code REALTORS). 387 King Street, Charleston, S.C. 29403

(conference rate upon availability)

For reservations call 843.722.0600 and ask for the REALTORS® Land Institute Conference Rate (Code REALTORS).

Newest ALCs

CONGRATULATIONS TO THE NEWEST ACCREDITED LAND CONSULTANT DESIGNEES OF THE REALTORS® LAND INSTITUTE. Dan Ward, ALC No Fences Land Company Bedford, TX 405.206.0914 danw@nofencesland.com Ward is a land specialist for No Fences Land Co. He began selling land in 2006 and has gone on to be the top salesman in 2008, 2010 and 2012. He is licensed in Oklahoma and Kansas. Curt Marshall, ALC United Country Theurer Auction/Realty Salina, KS 785.826.0824 soldit25@gmail.com Marshall is an Auctioneer and REALTOR® with United Country Theurer Auction/Realty LLC. His primary focus is selling farm and ranch land as well as commercial real estate by using the very powerful auction method of marketing. In both 2010 and 2011, he received the Pinnacle Club Gold award from United Country Real Estate for individual sales volume achieved each year. Mark Mommsen, ALC Martin, Goodrich & Waddell, Inc. Sycamore, IL 815.756.3606 mark.mommsen@mgw.us.com As a land broker and auctioneer, Mark is experienced in agricultural, recreational, and transitional real estate, as well as 1031 exchanges. He is active in his family’s row-crop and livestock farm in Iowa. Peter McPhail, ALC and Philip McPhail, ALC United Country McPhail Realty Lincoln, ME 207.794.6164 peter@mcphailrealty.com phil2@mcphailrealty.com The Land Brothers, Phil and Peter McPhail, are second generation brokers. The brothers share a passion for the rural lifestyle of Maine and specialize in timberland, farmland and recreational properties all over the Pine Tree State. 10 to 10,000 acres. They are the Maine contact!

Wendy Forthun, ALC 1 Stop Realty Inc. Kasson, MN 507.251.1637 wendy@1stop-realty.com Forthun is the Vice President and managing broker for 1 Stop Realty Inc. She is also the current President of the MN RLI Chapter. She specializes in agricultural land sales, auction, and management throughout MN and the U.S. She lives the life of land residing on a 75 acre cattle/hay farm. Dennis Saffell, ALC Coldwell Banker Mountain Properties Winter Park, CO 970.726.0123 dsaffell@cbmp.com Saffell has lived in the Fraser River Valley for over 25 years and has closed over 1,500 transactions. He has been active in land development, home construction and land sales. He is a leader in his community serving on local Boards. Kim Alexander, PhD, ALC Alexander Ag Roscoe, TX 325.236.5427 kdaroscoe@yahoo.com

Derek Grimsrud, ALC Whitetail Properties Real Estate Pittsfield, IL 515.468.0663 derek@ whitetailproperties.com Derek Grimsrud is a broker associate with Whitetail Properties Real Estate LLC. He sells farmland and hunting land in IA and MO. Derek earned both his ALC designation and his broker’s license last year. Daphne Zollinger, ALC Daphne Real Estate Denton, TX 940.300.0003 daphne@ daphnerealestate.net Zollinger, Owner/Broker of Daphne Real Estate, has been selling North Texas real estate since 2003. Daphne specializes in commercial and land brokerage. In addition to her ALC, she also holds her CCIM (Certified Commercial Investment Member), CPRES (Certified Probate Real Estate Specialist), and serves as the Education Chair for Greater DentonWise County Association of Realtors.

Alexander is the owner of Alexander Ag, provider of quality agricultural products and services. Alexander Ag prides itself in honesty, integrity, and friendliness alongside the production of high quality Red Angus cattle. Kim is also a farmland investor. Wayne Cooper, ALC Cabela’s Ohio Outdoor Properties Columbus, OH 614.493.6454 wcooper@ ohiooutdoorproperties.com Wayne specializes in outdoor and recreational properties. His love and passion for the outdoors along with extensive experience in real estate assists in fulfilling outdoor property dreams and adventures.

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New Candidate Members

Welcome New Members/ALC Candidates They are more than real estate peopleâ&#x20AC;Śthey are land people! Jessica Armstrong Armstrong Caperton & Co Caldwell, TX jessica@armcapco.com

Boyd Harris Farmers National Company Centralia, MO bharris@farmersnational.com

Ren Martyn Prudential Steamboat Realty Steamboat Springs, CO ren@highmountainland.com

Bryan Roberts Heritage Texas Country Properties La Grange, TX Bryan@cvctx.com

Guillermo R. Benavides Compass Performance Services Laredo, TX guillermorbenavides@hotmail.com

Matthew Holiday Tranzon Holiday Auctions, LLC Greer, SC mattholiday@tranzon.com

Brian Mason Mason Real Estate, Inc. Delta, CO brianmason@qwestoffice.net

Michelle Courtney Bishop Re/Max Landmark Terrell, TX courtney@rmlandmark.com

Bettye Hutchison Solid Rock Real Estate Camp Wood, TX solidrock@swtexas.net

Brian Massey Hertz Farm Management Monticello, IL brianm@hertz.ag

Shannon Schur United Country â&#x20AC;&#x201C; Schur Success Realty & Auction, LLC Monument, CO shannon@successrealtyauctions.com

Rick Bourne Alalandco Greenville, AL rick@alalandco.com

Ghassan Jadoun Prudential Commercial FL Port Richey, FL gusjadoun@gmail.com

Brian McCarthy Home Selling Team Llc Mansfield, CT brian@homesellingteam.com

John Burnham Truesouth Properties Montgomery, AL john@truesouth.com

Jeremy Jirasek Jirasek Realty Temple, TX jeremyjirasek@yahoo.com

Mark McWhorter Mirr Ranch Group, LLC Denver, CO Mac@MirrRanchGroup.com

Chris Carothers Hickman Realty Group, Inc. Jackson, TN ccarothers@hickmanrealty.com

Ryan Kay Hertz Real Estate Services, Inc. Mt. Vernon, IA ryank@hertz.ag

Stacy Molsberry Keller Williams Realty Georgetown, TX signwithstacy@kw.com

Bradley E. Clarke Mcenearney & Assoc. Realtors Middleburg, VA bclarke@mcenearney.com

Jerrett Lamb Jvl Farm & Ranch Pipe Creek, TX jv.lamb@jvlinvestments.com

Edna Murray Paul Green & Associates Natchez, MS ednajmurray@yahoo.com

Vicky Crigger Benchmark Land and Farm Franklin, TN vicky.crigger@comcast.net

Lance Langenhoven The Commercial Professionals The Woodlands, TX lance@ thecommercialprofessionals.com

Bryce Peek Ocala Development Ocala, FL brycepeek@gmail.com

Devin Dickey D-Brands Realty Inc. Cheyenne Wells, CO devin@d-brandsrealty.com Jason DurJava Century 21 M&M and Assoc. Turlock, CA jdurjava@c21mm.com Mary Earlley The Whitney Land Company Pendleton, OR mary@whitneylandcompany.com Robert Flack Homeland Properties Huntsville, TX andy@homelandprop.com Angie Gallaher United Country Real Estate Imboden, AR angieatunitedcountry@hotmail.com Kevin Gouchenouer Century 21 Realty Concepts Effingham, IL kevin.gouchenouer@century21.com

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Robertson Langford Southern Forestry Realty Tallahassee, FL rob@southernforestryrealty.com Robert Larison Keller Williams Realty Boise Nampa, ID blarison@msn.com J. Gardner Lile IV Lile Real Estate, Inc. Little Rock, AR glile@lilerealestate.com Chris Liverett Galles Properties Pagosa Springs, Co chirs@gallesproperties.com

Darrin Pennartz Re/Max Carrollton, TX darrin@pennartzgroup.com Matthew Peters Red Hills Realty & Auction, LLC Cimarron, KS matt@paramountland.net Ernie Pickens Pickens Auctions Stillwater, OK Gregg@pickensauctions.com B.G. Pierce Cedar Creek Lake Realty Gun Barrel City, TX bg@cclake.biz

Terry Longtin Farmers National Company Grand Forks, ND tlongtin@farmersnational.com

Ronald Reyes Keller Williams Heritage/Legend Realty Group San Antonio, TX ronreyestx@hotmail.com

Toni Manchester Century 21 The Hills Realty Kerrville, TX toni@c21thehills.com

Jason Robbins Remax Central Realty Asheboro, NC jasonrobbins@triad.rr.com

John Sewell Keller Williams Realty Partners, Inc. Overland Park, KS johnnysewell@mac.com Billy Shanklin Lands of America Paradise, TX billyshanklin@gmail.com Michael Sharp Sharp Outdoors LLC Springfield, LA mrsharp65@gmail.com Cynthia Smith Oldham Goodwin Group Washington, TX cyndee@oldhamgoodwin.com Steven Smith Cross Creek Realty, LLC Greenville, SC ssmith@crosscreekrealtyllc.com Curtis Stocking California Outdoor Properties Vacaville, CA curtis@caoutdoorproperties.com Cynthia Thomas Century 21 The Hills Realty Kerrville, TX cthomas@c21thehills.com Steven Tubbs Midwest Management Services Maquoketa, IA setubbs@netins.net Billy Van Cleave Keller Williams Realty Waco, TX billydon@kw.com Kyle Vreeland Coldwell Banker Commercial Lakeland, FL kyle@srdcommercial.com John Walenciak Mcgraw Realtors Coweta, OK jwalenciak@mcgrawok.com Becky Walenciak Mcgraw Realtors Coweta, OK bwalenciak@mcgrawok.com Jeremy Winborne First South Farm Credit McComb, MS jwinborne@firstsouthland.com

Education About the ALC Advanced Goal Statement: The Accredited Land Consultant Designation (ALC) is an indication of a professional who is the most accomplished, the most experienced, and the most knowledgeable land expert. Staying current in trends and information is inherent in being the best in the business. The ALC ADVANCED tier is designed to offer opportunities to ALCs to stay current in the area of land to assist clients through up-to-date knowledge.

Program: ALC designees have the option to participate in 30 hours of continuing education within a three-year period. If fulfilled, the participant would become an ALC Advanced for a three-year period. The following counts toward these required hours All of the below must be from options available through the RLI: • • • • • • • •

One-day courses: 8 contact hours Two-day courses: 16 contact hours Three-day courses: 24 contact hours Annual Land Conference: 16 contact hours ALC-to-ALC TeleConference Facilitation: 1 hour ALC-to-ALC TeleConference: 1 hour Web Seminar Development and Facilitation: 30 hours Web Seminar Attendance: 1 contact hour

• • • • • • • • • •

Comprehensive Course Updates: 15 hours Minor Course Updates: Based on updates submitted New Course Development: 60 hours per completed course Short Course Instruction: 5 hours per session (maximum of ten hours per year) Leadership: 30 hours a year Board of Directors: 2 hours per meeting attended Committee Chairs: 10 hours per year Committee Vice Chairs: 10 hours per year Committee Members: 1 hour per meeting attended Other RLI-related activities: Must be submitted to the RLI Education Director for approval at least sixty days prior to submitting the three-year report.

Administration: ALCs will submit their thirty hours with proof of attendance and/or completion of the activities once a year to RLI. These will be collected between January 2-January 10 on the year following the due date (i.e. For 2013, the records would need to be sent to National for credit between January 2-January 10 of 2014). If an ALC Advanced designee desires to keep that designation tier, he/ she must submit proof of having fulfilled the requirements every three years (i.e. If an ALC Advanced, submits the fulfilled requirements in January 2013, he/she would need to reapply in January of 2017 with professional development taking place in 2013-1016).

The 2013 LANDU Education Week Plus is a Wrap The 2013 LANDU Education Week Plus held in Chicago was ten days of best-in-class education! From July 14-23, RLI members and ALC designees completed one to six courses in the historic REALTORS® Building in the heart of Chicago. During this week, the LANDU Essentials of Negotiations course was offered for the first time in a face-to-face delivery. Congratulations to Chia Valdez, Bryce Peek, and Jason Robbins for completing all 104 required education hours for the ALC designation during this event. This was a feat of desire and dedication. Kudos, too, to the 15 students who successfully completed the ALC exam after attending LANDU Week Plus and to the ALCs—Ray Brownfield, David Klein, Russ Russell, Jeramy Stephens, and Gene Curtis who updated their knowledge by attending courses.

Bryce Peek, Chia Valdez, and Jason Robbins (left to right)

“I found LandU Week to be an excellent method of condensing needed training and education into a focused package of data and information within a relatively short time span.

“The quality of the ALC courses is top notch. They not only taught me to be more open-minded in my analysis of properties, but also opened my eyes and mind to new experiences. The network of fellow ALC’s helped me to reach higher and farther than I ever dreamed I would go in the real estate industry. Because of my ALC designation I was chosen in 2007 to be a part of Washington State’s real estate trade mission to New Zealand.” –Flo Sayre, ALC

The interaction with the other student participants was also a learning experience as well as a valuable networking tool. In addition, the frequent presence of the RLI staff complemented the learning experience. The instructors were well prepared and knowledgeable in their respective fields.

Ray Brownfield, David Klein, Russ Russell, Jeramy Stephens, and Gene Curtis (left to right)

I highly recommend LandU.” --Mike Sharp, Sharp Outdoors, LL, Springfield, LA

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Fall 2013 21

Education Something for Everyone…Including You Whether you are working toward earning your ALC, have an ALC, are working toward earning the ALC Advanced, LANDU has “something for you.”

LANDU Course Choices 2013 National Land Conference Course Option – (16 contact hours) NEW Advanced Tax Deferred 1031 Exchanges for Land Professionals – (8 contact hours) Agricultural Land Brokerage and Marketing – (16 contact hours) NEW The Basics of Eminent Domain Law for Real Estate Professionals – (8 contact hours) Essentials of Negotiations – (16 contact hours) NEW Ethics in Real Estate and Business – (16 hours) Land 101: Fundamentals of Land Brokerage* – (16 contact hours) New Land: Conservation and an Environmental Perspective on Redevelopment – (8 contact hours)

Land Development – (16 contact hours) Land Investment Analysis* – (24 contact hours) NEW Legal Aspects of Real Estate – (16 hours) Practical Navigation for Land Professionals – (16 contact hours) Site Selection – (16 contact hours) Tax Deferred 1031 Exchanges* – (16 contact hours) Tax Implications of Real Estate – (16 contact hours) Timberland – (16 contact hours) Site Selection – (16 contact hours)

*These courses count as requirements toward earning the prestigious Accredited Land Consultant Designation. 104 total course contact hours are required toward earning the designation. Note: These courses count toward reaching the 30 hours required for earning the ALC ADVANCED tier.

Current Schedule for upcoming 2013 courses *Note: This schedule is subject to change. To make sure of the most up-to-date schedule, visit the website at http://www.rliland.com/landu-course-schedule.

Essentials of Negotiation

Land Investment Analysis

Timberland

Legal Aspects of Real Estate

October 7-31, 2013: ONLINE Course (16 contact hours) Register online or call RLI National at 800.441.5263

October 7-31, 2013: HYBRID Course (16 contact hours) Register online or call RLI National at 800.441.5263

November 4-29, 2013: HYBRID Course (16 contact hours) Register online or call RLI National at 800.441.5263 November 4-29, 2013: ONLINE Course (16 contact hours) Register online or call RLI National at 800.441.5263

Land Investment Analysis

October 21-23, 2013: St. Augustine, FL (24 contact hours) Contact Lisa at lisa@gtar.net or 813-879-7010

Fast Track Program A “Fast Track” to the ALC designation is available to those real estate professionals who already hold a pre-approved designation (CCIM, SIOR, CRE, AFM, ARA, RPRA, AAC, MAI, CAI) or who hold either a B.S. or M.S. with a major in real estate or a program specifically related to land. Individuals who apply for Fast Track consideration must provide proof of holding one of the approved designations or degrees. For additional information about earning the ALC designation through the fast track programs, call 1.800.441.5263 or write to rli@realtors.org.

ALC-to-ALC TeleConference Generational Dimensions Moderated by Renee Harvey, ALC, Education Committee Chair The next free Teleconference exclusively for ALCs will take place on November 20, 2013 from 10:00 – 10:45 am on the topic of “Generational Dimensions.” Renee Harvey, ALC, 2013 Chair of the RLI Education Committee, will facilitate this teleconference covering the ramifications of having – for the first time in history – four generations in the work force and as consumers at one time. These groups are as different as radio, television, personal computers, and the internet are from each other. Differences

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based on education, communication, economic conditions and societal issues will be explored. Understanding and acknowledging the personality and character of each of these groups helps with effective communication in workplaces and personal situations. All ALCs will receive the access information to this free event closer to the date.

Hot Topic Web Seminar Team Conflict – Bring it on… Presented by Andre J. van Rensburg, ALC December 4, Noon-1 p.m. CT All experience conflict and misunderstanding with co-workers, clients, customers, and supervisors in the work environment. There is never a week when conflict management skills are not essential to one’s well-being and progress within and outside of one’s professional life. Learning to read the “signs” of conflict management will enable one to understand the hidden issues behind the conflict and experience greater success in his/her career. Positive conflict can stimulate and promote greater innovation and productivity in a team. All of these concepts will be explored during this “hot topic” web seminar developed and presented by Andre J. van Rensburg, ALC. www.rliland.com/hot-topic-web-seminars

Education Preliminary 2014 LANDU Course Schedule* Note: This schedule is subject to change. Please contact RLI at RLI@realtors.org or at 1.800.441.5263 with questions or visit the website at http://www.rliland.com/course-schedule.

January 1-December 31

June 23-27 and June 30, July 1

January 6-31

July 7-July 18

February 3-28

Short Hybrid July 7-August 1

Land 101: Fundamentals of Land Brokerage and Marketing – Virtual Self-Study Essentials of Negotiation – Online Course Land Investment Analysis – Hybrid Tax Implications of Real Estate – Hybrid Agricultural Land Brokerage and Marketing – Hybrid

March 12-14

2014 National Land Conference 2014 National Land Conference White Paper Option –

Face-to-Face April 7-May 2

LANDU EDUCATION WEEK – Face-to-Face Courses TBA Land: Conservation, Environment and Redevelopment – Essentials of Negotiation – Online Course

August 7-29

Site Selection – Hybrid NEW Building Business Through Technology – Hybrid

October 6-17

Advanced 1031 Exchanges for Land Professionals –

Tax Deferred 1031 Exchanges – Hybrid

Short Hybrid October 6-31

Timberland – Hybrid November 3-December 4

May 5-16

NEW AUCTION – Short Hybrid

May 5-30

Legal Aspects of Real Estate – Online Course

Land Investment Analysis –Hybrid

June 2-13

*RLI does not apply for continuing education units for the diverse accrediting organizations. Contact the accrediting bodies directly to find out if a course counts toward their CE requirements.

Additions to the LANDU Curriculum

The Land Education Foundation

Auctions: A Marketing Method

The Land Education Foundation (LEF) was established in 1982 originally chartered as the Farm and Land Foundation, a not-for profit organization, operating exclusively for land educational purposes. The mission and purpose of the Foundation is “To support and build educational programs and services that contribute to the wise utilization of land.” With this vision in mind, the Foundation has contributed to educational programs for the Institute, funded scholarships, and contributed to National Land Conference programming. Funds are donated by members of the Institute, chapters, and land owners through bequests and other fundraising activities.

The Basics of Eminent Domain Law – Short Hybrid

Two courses are being added to the LANDU Curriculum in 2013: Auctions: A Marketing Method—Sam Kain, ALC, Instructor Building Business through Technology—Myers Jackson, Instructor; Course Developer Counts 8 credit hours toward earning the ALC Designation

Auctions are a key sales tool in the land market. They are tools that can bring the desired price point for the buyer and for the seller. This course provides an overview of the auction method of marketing real estate. The areas covered will be the growth and new image of the auction industry’s niche, how auction firms work with sellers in marketing and selling property at auctions, and how those on the sell or the buy side can partner with auction firms. Building Business through Technology Counts 16 credit hours toward earning the ALC Designation

Prominence on the internet for real estate professionals is especially critical as statistics consistently report the large majority of real estate buyers begin their search online. The goal of this course is to empower participants with the knowledge to become involved at the level each feels comfortable but to, at a minimum, understand the techniques necessary to employ or execute successful internet campaigns. Students will be introduced to the basic mechanics of how internet search engines operate and obtain an understanding of the type of algorithms and logic utilized by providers. If you missed an RLI “Hot Topic” Web Seminar, need promotional materials, or would like to learn more about the land from subject matter experts, visit RLI’s General Store. Add to your land library!

At the 2013 National Land Conference, the Texas Chapter received a scholarship for being the chapter that gave the most exposure to educational programs in 2012. The recipient was Mark Bradbury who is moving forward to earn the ALC designation. Michael Kennedy received an LEF course scholarship at the National Land Conference. Kennedy stated, “I was very excited to have received the LEF Conference registration to gain additional knowledge in 2014. As a member of RLI for over two years, it is apparent that the ALC designation is well worth the time and effort. Land brokers with the ALC designation truly lead the pack. From my observation, the ALC designees are quite an exclusive group that enjoys a strong and educated network and the sharing of great ideas related to land brokerage. Additionally, ALCs enjoy greater exposure as many developers and other land professionals will seek out ALCs to bring to them the specialized skills that they may be seeking – this translates to additional business and is one of the many reasons I have started working towards my completion of the ALC.” Ray Brownfield, ALC, is chair of the Land Education Foundation. To learn more, he may be contacted at ray@landprollc.us.

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Feature

The Implications of Muscarello v. Winnebago County Board: Are Setback Limits, Scientific Findings, and Legislative Activism a Downwind Landowner’s Only Protections Against Wind Wake Effects? Kimberly E. Diamond, Counsel Specialty Finance Group of Lowenstein Sandler LLP’s New York City office.

The case Muscarello v. Winnebago County Board., 702 F.3d 909 (7th Cir. 2012) demonstrates the perils a landowner may face with respect to an upwind adjacent neighbor’s desire to place utilityscale wind turbines on his or her land. In the absence of Supreme Court precedent or other federal legislative measures, downwind landowners who do not have or do not contemplate having commercial wind turbines on their land may find themselves in a predicament if they use the judicial process to protect and preserve their current access to unimpeded wind flowing over their respective parcels. Based on the U.S. Court of Appeals for the Seventh Circuit’s ruling in Winnebago County, a landowner’s participation in the legislative process such as in public hearings regarding changes in local zoning ordinances with respect to setback limits and land use classifications, as well as such landowner’s using self-help remedies such as the application of scientific findings in conjunction with existing setback limits, are other available options such landowner has with respect to accessing unhampered wind above such person’s land. In Winnebago County, Plaintiff owned three land parcels in Winnebago County, Illinois (the “County”). Plaintiff’s Complaint alleged that a 2009 amendment to the County’s zoning ordinance made it easier for a landowner to obtain consent to build a wind farm on such person’s land because such ordinance re-classified wind farm construction from a “special” to a “permitted” land use. One of Plaintiff’s primary concerns was that under the amended ordinance, an adjacent neighbor could more readily build a utilityscale wind farm on such person’s property. Among Plaintiff’s concerns was that an upwind wind farm adjacent to Plaintiff’s land could cause wind wake effects that would harm Plaintiff’s downwind property by diminishing the wind speed and increasing the turbulence of the air flowing across Plaintiff’s property. The Seventh Circuit noted that wind wakes could deprive Plaintiff “of the full extent of the kinetic energy of the wind and air” entering Plaintiff’s property. The facts of the case indicate that Plaintiff’s property did not contain wind turbines. The facts also show that at the time the Complaint was filed, Plaintiff was opposed to having wind turbines erected on Plaintiff’s land in the future. Accordingly, the Seventh Circuit held that because the “value of [the kinetic] energy” wind contains only relates to the powering of actual wind turbines, Plaintiff had “no basis” for assessing present or prospective harm to Plaintiff’s parcels. From Winnebago County and from an earlier, similar Seventh Circuit case also involving Plaintiff, it appears that at least in the Seventh Circuit, until such time as an upwind neighbor builds a wind farm, a downwind neighbor does not have grounds for relief from

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damages. In this similar case, Muscarello v. Ogle County Board of Commissioners, 610 F. 3d 416 (7th Cir. 2010), Plaintiff again was a downwind landowner who was about to become subject to wind wake effects, due to Plaintiff’s adjacent neighbor’s soon-to-bebuilt wind farm on such neighbor’s upwind property. The district court dismissed the Ogle County case, which dismissal the Seventh Circuit affirmed. In Ogle County, a special-use permit for wind farm construction had already been granted to Plaintiff’s adjacent neighbor. As of the date of Plaintiff’s Complaint in Ogle County, Plaintiff’s upwind neighbor’s wind farm had not yet been built. In its Winnebago County ruling, the Seventh Circuit distinguished the facts underlying the Ogle County case from those in the Winnebago County case, noting that the harm to Plaintiff in Ogle County was more imminent than in Winnebago County because the defendants in the Ogle County case had already obtained a special-use permit at the time Plaintiff filed Plaintiff’s Complaint. However, while the defendants in Ogle County had a special-use permit in hand, the absence of an actual wind farm on defendants’ property meant that no harm to Plaintiff had occurred yet. As a result, the Seventh Circuit affirmed the lower court’s rulings in each of Winnebago County and in Ogle County: Plaintiff failed to state a claim upon which relief could be granted. Compare the facts of Ogle County to those in Winnebago County. In Winnebago County, several wind farm developers and operators are named as defendants. As of the Complaint’s date, none of these defendants had filed a permit application to build a wind farm in Winnebago County. Plaintiff’s Complaint alleges that these defendants have future plans to build a wind farm adjacent to one of Plaintiff’s properties. Defendants’ filing of a permit application is the first step in the process of building a wind farm on a parcel. Taking this first step is indicative of defendants actualizing their intent to build a wind farm, thereby turning such intent into an impending threat. In Winnebago County, the Seventh Circuit determined that because defendants had not applied for permits yet, they had not taken the first step in the wind farm construction process, so their intent did not constitute an impending threat. Therefore, Plaintiff did not have a cause of action against defendants. Change the facts of Winnebago County slightly, and such case presents potentialities that real estate land professionals should consider. What if in Winnebago County, Plaintiff, at the time the Complaint was filed, indeed was interested in building a wind farm on Plaintiff’s land? Would Plaintiff’s efforts to peremptorily protect the wind flow across such property fail? Once again, the answer most likely is “yes.” According to the Seventh Circuit, hypothetical harm or prospective danger of wake effects must be balanced

Feature against the greater public good. Local legislative bodies, such as zoning boards or similar entities, generally endeavor to advance the greater good of the local community. Developing wind power as a clean source of energy is often viewed as accomplishing such objective, while helping to contribute to this country’s energy independence. This public benefit argument is a challenging one for an individual landowner to beat, as local authorities’ perception of what is in the best interest of the local community generally trumps the rights of individuals whom the applicable legislation promoting wind power development adversely impacts. So, how does a landowner reduce its risk and protect itself from incurring harm from future wind wakes over its property, either (i) before such landowner places turbines on such property, or (ii) after turbines are installed on such property but before such landowner sustains damage in the form of increased turbine wear and tear, reduced energy production, and resulting lost profits? Currently in the U.S., a reliance argument based on the expectation of unobstructed wind flow is not a viable one, even for a downwind landowner who has already erected turbines on its property. Such argument effectively states that the downwind landowner, in reliance on existing ordinances or other laws in place at the time, sited its turbines a particular distance away from a shared property line with an adjacent, upwind neighbor. Countries such as Denmark recognize wind rights as compensable property, and have awarded compensatory damages to plaintiffs who have established through reliance arguments that violations of their wind rights occurred. In this country, though, there is no Supreme Court precedent or federal law recognizing wind as being subject to property rights. Presently, determining whether wind rights exist is largely up to state and local governments. If these entities determine that wind is not property, a person would not possess a right to assert an ownership interest in wind. Because no property would be at issue, a plaintiff would be unable to be compensated for one or more defendants’ interference with wind flowing over his or her land. Law is often slow to catch up to recent and widely accepted scientific findings. While wind wake effects have been a scientific phenomenon for a long time, only recently has the scientific community and public at large focused on wake effects’ ramifications. This is why there is currently sparse legal precedent in the U.S. with respect to wind wakes and property rights that could attach to wind flow. In the meantime, there are certain courses of action that landowners can take with respect to reducing wake effect impacts on wind flowing over their parcels. First, landowners can be proactive and assert a due process argument during legislative hearings during which alterations to current setback limits are discussed. As background, a setback limit is the minimum distance away that a person may place, or “set back,” its turbines from a shared property line. In the U.S., due process acts as a fairness measure so that impacted people have a right to voice their unique circumstances at a public hearing before the government can deprive them of life, liberty, or property. “Property” can mean traditional forms of property, like land. Or, it can mean an “entitlement,” such as a liberty interest created by state or local regulations, such as zoning ordinances. Arguably, a zoning ordinance creates a liberty interest in the form of an entitlement to expected wind flow across one’s property. A landowner’s presenting this liberty interest/entitlement angle, coupled with such person’s explanation of why the damage he or she would suffer is unique and more grave than the damage other similarly situated landowners would suffer if the government

changed the setback limit, will provide the legislative body with a due process argument. Such an argument may be compelling enough for this legislative body to carve out an exception for such landowner with respect to setback alterations that may be adopted. Second, using setback limits together with accepted scientific principles may be the best approach for determining where wind turbines may be sited on a parcel in the future. Scientific evidence from the Horn’s Reef offshore wind farm and a recent study at Texas Tech University shows that wind wakes behind a wake-generating wind turbine extend between 7 to 15 rotor diameters – or 7 to 15 times the length of the diameter of circle made by one full rotation of a turbine’s blades. Generally, most state and local governments have not incorporated these scientific findings into their current setback limits. This is because, according to the Environmental Law Institute, most laws governing setback limits are based on safety measures to protect against dangers such as a turbine falling over or losing one of its blades, not on wake effect impacts. Given this, to better calculate how far a distance would be prudent for siting wind turbines away from the shared property line with an upwind, adjacent neighbor, a landowner should combine the applicable setback limit (if one exists) with the scientific evidence for how far a wind wake extends. Such calculation may reveal that siting wind turbines on a particular property may not be a viable prospect, due to the distance away from the shared property line turbines would need to be sited in order to be profitable. Prospective landowners should run this calculation as well, as the parcel they may be considering purchasing as a future wind farm site may not be able to fulfill its intended purpose, ultimately making such a purchase a very poor investment decision. Wind flowing over a parcel has value to the extent it can be monetized profitably. In the U.S., protecting one’s ability to capitalize on such monetization at a future time may prove challenging. Land real estate professionals should consider the outcome of the Winnebago County case when evaluating whether to erect wind turbines on a parcel they already own, and when contemplating the purchase of a parcel on which wind turbines could be erected in the future. Absent judicial precedent that recognizes a right to unobstructed wind flow in the future, a landowner may need to engage in legislative activism in effort to preserve its current wind flow, or may need to use both setback limits and scientific findings regarding wake effects to determine where best to site turbines on a particular parcel. Willingness to engage in these measures may be essential to reducing the risk associated with wind turbine siting, and to profiting from a parcel’s wind power potential in the future. About the author: Kim Diamond is Counsel in the Specialty Finance Group of Lowenstein Sandler LLP’s New York City office. Diamond is the Co-Chair of the American Bar Association’s Renewable, Alternative, and Distributed Energy Resources Committee. Diamond was a presenter at the 2013 National Land Conference on Wind and Air Rights. Diamond may be contacted at (646) 414-6980 or at kdiamond@lowenstein.com. Note: The views expressed in this article are the author’s and do not necessarily reflect the views of Lowenstein Sandler LLP.

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Feature

Lower Commodity Prices to Test the Farmland Market Brent A. Gloy, Professor and Jason R. Henderson, Associate Dean and Director Purdue University

Over the last several years farmland in the U.S. Corn Belt has benefited from a near perfect storm of favorable developments. Commodity demand has undergone a number of substantial shifts ranging from rapidly growing demand in emerging economies and the widespread adoption of biofuel policies. On the supply side, the world has witnessed a number of weather induced negative supply shocks in critical growing regions which have limited supply availability. These developments have resulted in a period of substantial profitability for U.S. farmers. To date the net result of these changes has been sharp increases in farm incomes, rising cash rents, and substantially higher farmland values. Last year saw another round of sharp increases for farmland, with many Corn Belt states seeing prices grow by nearly 20% in 2013. Indeed, the gains in farmland prices have been breathtaking. After adjusting for inflation, since 2003 farmland values in Iowa notched a decade of annual real price increases of 12.7%, a real rate even greater than the dramatic increases seen before the 1980â&#x20AC;&#x2122;s farm crisis. Throughout the Corn Belt the story is similar as farmland owners have experienced some of the biggest real gains that we have seen in the last 50 years. The farmland gains have not been surprising as most of the economic events in the recent past have been favorable to farm incomes and resulted in nearly 5 years of record profitability. These profitable times have coincided with historically low interest rates. As a result investors have pushed farmland valuations as measured by the ratio of farmland price to current cash rent to all-time highs. For instance, cash rent multiples in Iowa, Illinois, and Indiana all easily exceed 30 today equating to capitalization rates in the low 3% range (Figure 1). These valuations indicate that investors have felt that rents will continue to increase; interest rates will stay low, or some combination of both. The tremendous profitability has not gone unnoticed. World cropland acreage has begun to increase, and farmers in the U.S. are rapidly adopting technology that has the potential to increase supplies. This means that commodity demand must stay strong to keep future incomes high. In addition, there is substantial uncertainty over future interest rates which impact the present value of expected future earnings. The result is a rapidly evolving and complex farmland valuation environment.

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Figure 1. Value-to-Cash Rent Multiple for Iowa, Illinois, and Indiana Cropland, 1967-2013. Source: IL and IA compiled from the National Agricultural Statistics Service and Indiana from the Purdue Land Value Survey.

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Feature •

Figure 2. Farmer and Investor Expectations of the Average Cash Corn Prices over the Next 5 Years, $’s per Bushel, March 2012 and March 2013.

Of course, one of the factors that will influence the direction of the market is how investor attitudes about future farm incomes and interest rates evolve. We surveyed a number of farmers and investors on their attitudes toward future commodity prices in April of 2012 and as recently as March 2013 and found that most remained optimistic, expecting that over the next five years cash corn prices are likely to remain at or near $5.00 per bushel (Figure 2). These price and relatively low interest rate expectations would go a long way in explaining the dramatic increase in farmland values that we have experienced. There were 185 respondents to a 2012 internet survey and 98 conference attendees responded in 2013. If one uses the corn price expectations at the higher end of the range of our survey participants, farmland values are likely to be well supported at levels reported by many farmland surveys throughout the Corn Belt. If one chooses values toward the lower end of the range, some values may already be too high. What the future holds will determine which view is correct. For the first time in several years there are headwinds facing the farmland market. These headwinds might be characterized as follows: •

Corn and Soybean Yields Return to Trend or Better: While the corn and soybean crops are still not in the bin, it appears that the prospects for near trend or better yields are a distinct possibility. Combined with the large planted acreage, the U.S. looks to have substantial crop inventories available after harvest.

•

Flat Demand for Corn and Soybeans: The corn demand expansion associated with ethanol use appears to have reached its peak. While ethanol use is not likely to decline, its growth is almost certain to slow. In addition, the U.S.’s share of corn and soybean exports has fallen with tight crops. How fast exports rebound will play a key role in determining how low crop prices go. It is important to remember that the demand for agricultural products is inelastic, so large price moves are required to stimulate or reduce demand. This is why prices moved upward so rapidly when supplies were short and it is why prices will move sharply lower in the face of more plentiful inventories.

Interest Rates Start to Rise: Farm mortgage and operating interest rates are begin to head upward. Federal Reserve officials are now openly debating how and when they might take a less accommodative stance toward monetary policy. If rates rise, how fast and how much will likely have an impact on the capitalization ratios that investors are willing to accept.

The tremendous commodity super-cycle may be reaching its end. It remains to be seen exactly how strong these headwinds will be, but it appears that the prospect for rebuilding commodity stockpiles is a real possibility. If accomplished, these stockpiles will undoubtedly weigh on farm incomes, profitability, and farmland rents. At the same time, there is great uncertainty over where interest rates might head. Were lower incomes to coincide with higher interest rates it would likely set the stage for a correction in farmland values. Such a scenario could be viewed as the reverse of the perfect storm of high commodity prices and low interest rates that have taken us to this level of farmland prices. How quickly and how substantial of a correction would depend on how rapidly and severely farmer and investor expectations change, which is something that is difficult to predict. Aside from the concerns that are brewing for agricultural incomes, one should also carefully watch the amount of farmland that is supplied to the market. It is difficult to predict how this might change, but substantial increases in farmland being brought to market will weigh on prices. At this time we would expect 2013 farm incomes to remain strong on the back of high yields. However, the profitability prospects for next year are likely to be less than in the most recent past. The economic conditions in agriculture have been phenomenally good for the last 5 years. We expect that they will remain acceptable going forward, but that the tremendous profitability of the last few years will be less common in the next five years. This will likely cool the prices in the red-hot farmland market. About the authors: Brent Gloy is a professor in the Department of Agricultural Economics at Purdue University. He teaches and conducts research and Extension programs in the areas of agricultural finance and agribusiness management. Brent founded and currently serves as the director of the Center for Commercial Agriculture. Gloy is a presenter at the 2014 National Land Conference in Charleston, S.C. on March 12-14. Jason R. Henderson is Associate Dean in the College of Agriculture and Director of Purdue Extension at Purdue University. He holds masters and doctorate degrees in agricultural economics from Purdue University and a bachelor’s degree in economics from Central College in Pella,

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Chapter News Florida

Arkansas

Eighty members of the Florida Chapters of RLI and CCIM met on Friday August 16th in a lively marketing and networking meeting. This event happens twice a year. The next meetings will take place in January and August of 2014. For more information, contact the RLI Florida Chapter President, Sage Andress, ALC, at sage_andress@hotmail.com.

Jeramy Stephens, ALC, is leading the way to start an RLI Chapter in Arkansas. A meeting was held in Little Rock in September with George Clift, ALC, and Bob Turner, ALC, to devise a planof-action to move forward with this initiative. Clift is the current Chair of the RLI Chapter Development Task Force.

Georgia

Flo Sayre, ALC, Managing Director of Farmers National, has been named Washington’s Land Broker of the Year for 2013. “I am both honored and humbled that my fellow ALC’s and Exchange members have chosen me as Washington’s Land Broker of the Year! Achieving the ALC designation was both one of the toughest and most rewarding achievements of my real estate career.“

On May 16, 2013, the Georgia Chapter of the REALTORS® Land Institute presented In the Barn at Tall Timbers Research Station & Land Conservancy in Tallahassee, Florida. This educational event featured lectures and discussions on topics such as conservation easements, habitat conservation, endangered species, and land management practices.

The Pacific Northwest Chapter

Fred Rathbone, ALC, has been named Oregon’s Land Broker of the Year for 2013. Rathbone of Prudential NW Properties has 69 years of experience working in real estate and land transactions. When asked what inspired him to enter the land industry Rathbone states, “Growing up during the Great Depression and being very very poor, it was clear to me that owning the land was the difference between the ‘Haves’ and the ‘Have Nots’ and it still rings true today.”

Iowa On June 12, 2013, the Iowa Chapter of RLI held a summer board meeting. One topic discussed was membership growth. The Iowa Chapter has seen a 19% increase in membership and/or MLS users since August 2012. The Membership Committee for the Iowa Chapter has set a goal for obtaining new members. The Committee will strive to obtain three new members per region per quarter. Following the Board Meeting, Jon Hjelm, ALC, facilitated an informational session on auctions. On August 12-14, the Chapter hosted two LANDU courses in Clive, Iowa: Basics of Eminent Domain and Land Conservation & an Environmental Perspective on Redevelopment. The classes took place during the Iowa State Fair so class attendees could extend their trip and visit the State Fair or have fun at other local attractions.

The Pacific Northwest Chapter of REALTORS® Land Institute presented the Washington Fall Marketing Session on September 18-19, 2013. The event featured marketing sessions and a session covering water and water supply.

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On September 19, the Iowa Chapter held its RLI Board Meeting, Fall Trends & Values Survey Press Conference, and RLI Annual Dinner at the Prairie Meadows Convention Center in Altoona, IA. Texas At the 23rd Annual Outlook for Texas Land Markets Conference put on by Texas A&M Real Estate Center in San Antonio on April 25-26, 2013, Texas RLI Chapter #22 hosted a reception for the attendees. Great networking and socializing was had by all. On September 7 in Dallas, Texas, the RLI Texas Chapter meeting was held that included educational opportunities on the topics of Eminent Domain and Conservation; an update from RLI National presented by Michele Cohen, Executive Vice President; and the inductions of the new officers. Rusty Lowe, ALC, was inducted as the 2014 RLI Texas Chapter President.

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Feature

Staying Competitive Today Requires 5 Important Technology Strategies Aaron Graham, ALC Land Pros Realty Land Pros Systems, Inc. Before I was a land broker in Nebraska, Iowa, Kansas and Missouri, I was an NFL football player. As a player, I was used to working with people who had the same goal in mind. Reaching a goal was easier with the support of my fellow players. When I started in real estate, my company was a one-man show. That was a foreign concept to someone accustomed to working with others for a collective goal. As I’ve grown my business over the years, I have been able to enjoy a team dynamic again — not only among the team members in my company, but also in the land industry with my peers. Together, we have the power to make an impact on the buyers and sellers with whom we do business. As individual businesses, we are engaging in marketplace competition. That competition includes watching what other brokers are doing to see what’s working, and putting the best ideas to work in our own businesses. For years, we’ve been emulating those ideas in our own ways. But now it’s becoming harder and harder to do that. Like football teams need to do to stay “on top of the game,” we have to be willing to make adjustments in our respective brokerages.

If you can’t beat ‘em, join ‘em. Google, Yahoo and Bing have solidified themselves as the “Big 3” in general online searches. Similarly, when people search for land for sale on the Internet, they inevitably end up on one of the powerhouse land marketing sites. The real power offering small businesses the potential to survive and thrive in this business lies within us. As land professionals, we can join together to leverage our experience, absorb some of the escalating costs, and be recognized as a force on the Internet.

5 ways to empower your business. In any business — just like my coach used to tell me — nothing stays the same. You can get better or you can get worse. To continue to succeed in the land brokerage business, you should be integrating technology like never before into your marketing strategy. Here are five technology strategies that are essential to use if you want to keep moving ahead: 1.

Give visitors a welcoming and user-friendly website.

More than ever before, your website is your storefront, as well as the introduction for a prospective client. By the time you talk with a prospect, chances are strong that they will know more about you than you do about them. Your opportunity to make a positive first impression has never been more important.

What first impression are you giving? An outdated, unorganized, hard-to-read website says you do not take pride in your web appearance — and, by extension, your business. Your prospective buyers and sellers will take note. Perhaps most damaging, your site will slip in online rankings.

Instead of investing your hard earned dollars on new carpet and paint for your office, take that money and put it where it will make a true difference. Spend it on making your website an impressive virtual storefront.

Continually improve SEO.

Search engine optimization (SEO) is the standard for marketing a website today.

According to the National Association of Realtors, 92 percent of all real estate buyers start their search online. What’s more, consumers are doing more and more business with companies that can be found on page one or two of their Internet search results.

Simply put, SEO is the relationship between what keywords people use to search for your business and what keywords are recognized by your website. How well you make sure your site is recognized by search engines determines how high on the list your results appear.

The Internet is the power in our business. It is the portal through which our prospects and their money flow. It is where you must be for clients to find you.

Step back and think about what terms a prospective buyer would use to find your services online. So you sell land. So “land” as a keyword is obvious. What about “property”? What about “ground”?

It is becoming too expensive and competitive for small businesses to remain on their own without the support of their own affiliates — their own league.

To you, they may have the same meanings. However, each individual who conducts an online search thinks differently. For every aspect of your business, you need to get into that person’s head.

Our business is always changing. It takes hard work and a desire to keep finding and using the right tools to better our brokerages. I’m reminded of something an offensive line coach told me years ago that has stuck with me: “Either you’re getting better or you’re getting worse. You never stay the same.” I’ve been thinking about that a lot lately as my company — and yours, too, no doubt — has been working hard to differentiate itself in the online marketplace. We are constantly striving to make ourselves more visible to sellers in need of our services and buyers looking for our listings. In football, a team can be, for instance, the Baltimore Ravens; but, if it does not have a league in which to participate, there is no NFL. The league gives the team the power. The league can give us power in our small businesses. Today, though, the face of the league is changing. The operational and marketing costs associated with small business ownership are skyrocketing. The power lies in the Internet. The Internet has revolutionized how and where prospective buyers find the properties offered for sale. Five or six years ago, a real estate website is a must-have today for every broker, and every brokerage.

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Feature 3.

Develop an email marketing strategy.

Prioritize social media in your marketing plan.

An email blast is an effective tactic to get your listings and your brokerage in front of people. It offers a way to immediately drive traffic to your website. It also gives you opportunities to showcase specific properties, brokerage activities, and relevant news stories.

Many television spots, print ads — even product packaging — for small businesses feature social media shout-outs. Social media is a valuable tool for marketing a business. However, prioritizing when you use social media is important.

Some guidelines for a good email newsletter: feature a single property that stands out from the crowd, or an upcoming auction, a handful of new listings, and few that recently went under contract or sold. Once an audience has been built through email traffic, subscribers will look forward to your newsletter as it most likely will contain content they will find of interest.

Remember, prospects are first and foremost going to go to your website to find out more about your brokerage and your listings. It is unlikely you’ll ever get a million-dollar listing through Facebook. Therefore, first, spend your efforts on your site, SEO, and email marketing. Then, add social media.

A caveat: Make sure your email marketing is professionally designed and well- written. One misspelling or a muddy layout will distract subscribers. Give the audience a reason to keep reading or stay subscribing. Also, be a good steward of the CAN-SPAM Act by making it easy for those who desire to unsubscribe to do so.

Get your listings on the national marketing sites.

It’s a fact: If you want your listings found, you need to be on the national marketing sites that can be found on page one rankings. These sites are leading the way in SEO and will be around for a long time. Use them — they will help produce prospects for your business.

Pay close attention to the sites that allow you to link to your individual site. Look for the national sites that use key search terms for the sector of brokerage or real estate in which you specialize. If someone searches for “timberland for sale in Georgia,” you want to be sure you’re on a site that produces search results for that type of search.

You can save a lot of time inputting individual data on these national marketing sites. Talk with your internet technology specialist about finding a way to sync your listing data with these sites.

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We need to stay in the game. We have all worked too hard not to keep growing our brands and to keep operating our brokerages independently. In the land brokerage industry, our game is changing. People are starting to break away from the pack. As a league of land professionals, we all need to be willing to make adjustments if we’re going to stay in the game for the long haul. The advantage lies in technology. Technology will define our success in the future. Using the right tools is a key to helping prospective buyers and sellers find you online and to making a great impression when they do. This is about making a connection, not just getting a hit. Aaron Graham, ALC, is broker/owner of Land Pros Realty in Gretna, Neb. The firm specializes in farm, ranch, hunting and recreational real estate sales in Nebraska, Iowa, Kansas and Missouri. In 2013, he launched Land Pros Systems, Inc. This web marketing system and brokerage operations platform helps brokers manage SEO, listings, contacts, leads, email campaigns, agents and more through the land brokerage industry’s most advanced proprietary website system. For more information, visit LandProsSystems.com or contact Aaron at 402932-5488 or aaron@landprossystems.com.

Feature

The Sustainability of Farm Land Prices from an Auctioneer’s Point-of-View David Whitaker, Auctioneer; REALTOR® Hertz Real Estate Company All around Iowa, as I sit in the coffee shops and listen to people, they talk about two things: the price of farm ground and the price of corn. I’ve been asked many times, ”Are we in a bubble (like the 80’s) and when is it going to pop?” Warren buffet once said "you get a bubble when a very high percentage of the population buys into some originally sound premise that (the premise) becomes distorted as time passes and people forget the original sound premise and start focusing solely on the price action” “I tell them my opinion is “NO” we are not living in the 80’s. I base my opinion on two major factors: the amount of capital vs. leverage used to purchase the farm ground and “dollar cost averaging”. According to Jim Knuth, Senior Vice President of Farm Credit Services, lenders on farms in Iowa are in a much better financial position than they were in the 80's. He said that only 50% of farmers are leveraging their new purchases. He continued to say that FCS will loan up to 65% of the farms value, but added that of the farmers that are borrowing most are only leveraging 48%. We now need to take a look at who is buying farm ground. As we can see from the table to the side, the neighboring farmer is most likely to be our buyer, and, maybe, an investor. The investors play important rolls that most people overlook. They are the ones keeping the market honest. They are making sure that the land sells high enough that they, themselves, can no longer get a suitable return. So whether or not they bid and are successful in buying the farm or they just bid and move the price to its current heights, without the investor buyer, our land prices may be softer. So, how are they managing the higher land prices?

“Dollar Cost Averaging” Most of the neighboring farmers are averaging the cost of the land. Averaging the farm land they own free and clear with their new purchase, as well as the ground they rent. (As shown in provided example) This coupled with the high price of corn is making the high-priced farm ground more affordable. With that being said, I do feel that there is still a bubble. This makes me think about why people are selling the farm ground. Some are selling because they are upgrading from a lower quality farm, and using a 1031 exchange to buy higher quality farm ground (Investors). Some are selling due to a death, an inheritance, and some are selling because they are trying to capitalize on the high price of farm ground. Whatever the reason, make no mistake: if corn prices drop at 12:00 noon, the price of farm ground will drop accordingly at 12:01 pm. There are many other situations that could have an effect on farm land prices: China’s growing population in relation to soybeans, the fact that each acre is going to have to feed 6.5 people, the government mandate on ethanol and where renewable fuels are headed, the current state of the stock exchange, and ROI choices that investors have to make.

A farmer once said to me, “How would you like it if your annual income was traded publicly every day by people who know nothing about farming or are even involved in agriculture?” He went on to say that as corn prices have risen, so has the cost of doing business. “It takes millions!” he said. This put the risk factor into perspective for me and raised a couple questions. Are the farmers making any more money or just netting the same amount and risking 10 fold from what they were risking in previous years? This is where the real bubble lies. If the price of land levels out, will our sellers be selling? That is the real question for us as auctioneers. I know most auction companies diversify and sell a little bit of everything, but for those who are auctioning land exclusively, will the sellers avoid auctions and move to a traditional listing? Auctions work because there is a competitive bidding aspect. So when the market is good; auctions are good! I always say to sellers, “If you know the price you want, sell it with a listing---- If you want to know what the top dollar someone is willing to give, take it to auction.” As prices gravitate downward, I think the buyers will take a step back and not bid as bullish as they have in the years past. With less competitive bidding on the buyers’ behalf, worrisome sellers will want to set the price rather than use the auction method of marketing. For now the market is hot! With over $400,000,000 in land sold in Iowa last year, prices are still on the rise. We are up 9.5% (Sept-2012-March-2013) according to the Iowa REALTORS® Land Institute. Looking back and seeing that we are over two hundred and fifty percent higher than we were ten years ago tells us that farm land is a very good investment. With an average tillable farmland price of $8,691, this also means high rate of returns for the investor buyer. (Currently 3-5% ROI on cash rent and 4-5% ROI on CRP) This compared to a CD or a bond, is a great investment, and the investor gets a tangible asset that he/she can re-sell. In this volatile land market, we as auctioneers need to keep an eye on the horizon. Can we sustain the current prices? Only time will tell! Areas to watch are commodity prices, who is buying, and who is selling. We also need to watch what the world is requiring of us as farmers. We will need to watch other countries, like China, to see how the population might change the demand. Higher demands bring higher prices As land specialists, providing our sellers with the current market data and information regarding the above points are important to helping them make sound decisions.

References: RLI Iowa Chapter, Farm Credit Services

About the Author: David Whitaker is an auctioneer and sales professional at Hertz Real Estate Company, Inc. in Nevada, Iowa. Whitaker is the 2013 Nebraska Champion Ringman. He was the 2012 Missouri Champion Auctioneer, the 2012 International Livestock Rookie Auctioneer Champion, and the 2011 Iowa State Champion Auctioneer. Whitaker was a “Dream Team” Auctioneer at the Greatest Cowboy Auction on Earth at the 2013 National Land Conference.

Terra Firma

Fall 2013 31

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