Fun in the Fall: Minimizing Liability at Your Agritourism Operation

By: Evin Bachelor, Wednesday, September 04th, 2019
Source: https://farmoffice.osu.edu/blog/wed-09042019-206pm/ohio-ag-law-blog-fun-fall-minimizing-liability-your-agritourism-operation
Whether we’re ready or not, Labor Day traditionally marks a transition from summer to fall.  Pumpkin flavored everything will soon be available at a coffee shop and restaurant near you, and Ohio’s agritourism farms will surely be busy.

Whether you are just getting your agritourism farm up and running, or a seasoned agritourism veteran, it never hurts to take a moment to think about your liability risks.  The OSU Extension Agricultural & Resource Law Program has developed a number of resources, available on our publications webpage, that can help you think about ways to minimize the legal risks to you and your farm.  These resources include:

  • Ohio’s Agritourism Law – Ohio law grants liability protection for personal injuries suffered while participating in an agritourism activity.  It also provides for special taxation and zoning of lands where agritourism activities occur.  This law bulletin explains what your farm needs to do to be covered by the immunity, and how much protection it provides.  Click HERE to read the law bulletin.
  • Farm Animals and People: Liability Issues for Agritourism – Farm animals can be a valuable attraction for an agritourism operation, but having people and animals interact on the farm creates liability risks.  This factsheet explains a range of animal liability risks and provides a checklist to think about what you can do to reduce the risk of injury to your visitors, as well as reduce the risk of a lawsuit.  Click HERE to read the factsheet.
  • Agritourism and Insurance – Even with immunity laws in place, a farmer must carefully consider the farm’s insurance needs and ensure that it has adequate coverage.  This factsheet explains agritourism insurance, why it may be needed, and more.  It also provides a checklist that may help an agritourism farmer make sure that certain important insurance questions are addressed before an accident occurs.  Click HERE to read the factsheet.
  • Agritourism Immunity Laws in the United States – Many states, including Ohio, have taken steps to encourage agritourism by providing agritourism farms with some degree of immunity to liability.  We explain Ohio’s law more in depth in our law bulletin titled “Ohio’s Agritourism Law,” but this factsheet compares approaches taken in other states and provides a checklist that helps an agritourism farm think about how much protection it has under these laws.  Click HERE to read the factsheet.
  • Agritourism Activities and Zoning – Zoning is a force to be reckoned with in many states, but many states, including Ohio, have taken steps to encourage agritourism through zoning regulations.  This factsheet explains how zoning and agritourism interact across the country, including an explanation of Ohio’s current approach.  Click HERE to read the factsheet.
  • Youth Labor on the Farm: Laws Farmers Need to Know – Many Ohio agritourism farms provide employment to youth, who are able to learn about agriculture, business, and customer service through working at the farm.  Those hiring youth under the age of 18 want to make sure that they are following federal and Ohio labor laws.  Our latest law bulletin explains the youth labor laws that are unique to agriculture.  Click HERE to read the factsheet.

Food sales present some special issues that you will want to think about if you wish to sell food at your farm.  Depending upon the foods you sell, you may have to obtain a retail food establishment license for food safety purposes.  The following resources can help you think through the steps you must take to sell food at your agritourism farm:

  • Food Sales at Agritourism Operations: Legal Issues – Whether you sell fresh produce, cottage foods or baked goods, or prepare and serve food on-site, there are legal risks and requirements that may come into play.  This factsheet explains some of the legal issues you should consider before selling food at your farm, and provides a checklist of things to consider before you begin selling food.  Click HERE to read the factsheet.
  • Selling Foods at the Farm: When Do You Need a License? – This Ohio-specific factsheet explores farmers, including those operating an agritourism farm, need to register or obtain a license in order to sell food at the farm.  Click HERE to read the law bulletin.

Beyond our website, many of our peers at OSU Extension have developed a number of helpful resources for agritourism farms.  OSU Extension’s Agritourism Ready webpage, which you can access at u.osu.edu/agritourismready/, is designed to be a one stop shop for preparing an emergency management plan.  You can also read factsheets on Ohioline related to agritourism ranging from “Creating Signage for Direct Food and Agricultural Sales” to “Grants and Low-Interest Loans for Ohio Small Farms,” and “Maps, Apps and Mobile Media Marketing” to “Selling Eggs in Ohio: Marketing and Regulations.”

As new legal issues arise, we will continue to create resources that help farmers understand and mitigate their risk.  In the meantime, we wish everyone a fun and safe fall at Ohio’s agritourism farms.

“Ask the Expert” Area Seeks to Help Farmers at this year’s Farm Science Review

Each year, faculty and staff of The Ohio State University address some of the top farm management and veterinarian medicine challenges which Ohio farmers are facing during the “Ask the Expert” sessions held each day at the Farm Science Review at the Molly Caren Agricultural Center near London, Ohio.

The 20 minute “Ask the Expert” presentations at Farm Science Review are one segment of the College of Food, Agricultural, and Environmental Sciences (CFAES) and the College of Veterinary Medicine comprehensive extension education efforts during the three days of the Farm Science Review which will be held September 17-19 in London, Ohio.

Our experts will share science-based recommendations and solutions to the issues growers are facing regarding weather impacts, tariffs, veterinarian medicine, and low commodity prices. Producers are encouraged to attend one or more of the sessions throughout the day.

The sessions will take place in the Ohio State Area in the center of the main Farm Science Review exhibit area located at 426 Friday Avenue. This year’s featured sessions are:

Tuesday, September 17, 2019
“Tax Strategies Under the New Tax Law” presented by Barry Ward
10:00 – 10:20 a.m.

“Climate Smart- Weather, Climate & Extremes-Oh My!” presented by Aaron Wilson
10:20 – 10:40 a.m.

“Before the Pearly Gates- Getting Your Farm Affairs in Order” presented by David Marrison
10:40 – 11:00 a.m.

“Crop Inputs & Cash Rent Outlook for 2020” presented by Barry Ward
11:00 – 11:20 a.m.

“Farm Stress-We Got Your Back” presented by Dee Jepsen
11:20 – 11:40 a.m.

“The Legal Buzz on Hemp” presented by Peggy Hall
11:40 – 12:00 noon

“Current Status of African Swine Fever” presented by Scott Kenney
Noon to 12:20 p.m.

“Farm Income Forecasts: Are Farmers Experiencing Financial Stress?” presented by Ani Katchova
12:20 – 12:40 p.m.

“How Much Money Stayed on the Farm? 2018 Ohio Corn & Soybean Production Costs” presented by Dianne Shoemaker
12:40 – 1:00 p.m.

“Where Are We on U.S. Trade Policy” presented by Ian Sheldon
1:00 – 1:20 p.m.

“Farm Accounting: Quicken or Quickbooks” presented by Wm. Bruce Clevenger
1:20 – 1:40 p.m.

“Commodity Markets – Finding Silence in the Noise” by Ben Brown
1:40 – 2:00 p.m.

“GMOs, Food Animals, and Consumers” presented by Dr. Gustavo Schuenemann
2:00 – 2:20 p.m.

“Solar Leasing Options” presented by Peggy Hall & Eric Romich
2:20 – 2:40 p.m.

“Poultry Backyard Disease Management” presented by Dr. Geoffrey Lossie
2:40 – 3:00 p.m.

Wednesday, September 18, 2019
“Climate Smart- Weather, Climate & Extremes-Oh My!” presented by Aaron Wilson
10:00 – 10:20 a.m.

“The Legal Buzz on Hemp” presented by Peggy Hall
10:20 – 10:40 a.m.

“Zoonotic Diseases: Can I really get sick from my 4-H Project?” presented by Dr Jacqueline Nolting
10:40 – 11:00 a.m.

“Solar Leasing Options” presented by Peggy Hall & Eric Romich
11:00 – 11:20 a.m.

“Where Are We on U.S. Trade Policy” presented by Ben Brown
11:20 – 11:40 a.m.

“Impact of Peak Electrical Demand Charges in Agriculture” presented by Eric Romich
11:40 – 12:00 noon

“Crop Inputs & Cash Rent Outlook for 2020” presented by Barry Ward
12:00 – 12:20 p.m.

“Commodity Markets – Finding Silence in the Noise” by Ben Brown
12:20 – 12:40 p.m.

Public Perception Risk: Building Trust in Modern Agriculture by Eric Richer
12:40 – 1:00 p.m.

“Farm Stress-We Got Your Back” presented by Dee Jepsen
1:00 – 1:20 p.m.

“How Much Money Stayed on the Farm? 2018 Ohio Corn & Soybean Production Costs” presented by Dianne Shoemaker
1:20 – 1:40 p.m.

“Poultry Backyard Disease Management” presented by Dr. Geoffrey Lossie
1:40 – 2:00 p.m.

“Tax Strategies Under the New Tax Law” presented by Barry Ward
2:00 – 2:20 p.m.

“CRISPR gene editing: Are super animals within our reach?” presented by Dr. Scott Kenney
2:20 – 2:40 p.m.

“Using On-Farm Research to Make Agronomic and Return on Investment Decisions” presented by Sam Custer
2:40 – 3:00 p.m.

Thursday, September 19, 2019
“Horse Health Care and How to Feed a Horse” presented by Dr. Eric Schroeder
10:00 – 10:20 a.m.

“Farm Stress-We Got Your Back” presented by Dee Jepsen
10:20 – 10:40 a.m.

“Tax Strategies Under the New Tax Law” presented by Barry Ward
10:40 – 11:00 a.m.

“The Legal Buzz on Hemp” presented by Peggy Hall
11:00 – 11:20 a.m.

“Solar Leasing Options” presented by Peggy Hall & Eric Romich
11:20 – 11:40 a.m.

“Commodity Markets – Finding Silence in the Noise” by Ben Brown
11:40 – Noon

“Crop Inputs & Cash Rent Outlook for 2020” presented by Barry Ward
12:00 – 12:20 p.m.

“Antibiotic Use in Animals-Does it Impact for Human Health” presented by Dr. Greg Habing
12:20 to 12:40 p.m.

“Where Are We on U.S. Trade Policy” presented by Ben Brown
12:40 – 1:00 p.m.

“Swine Biosecurity” presented by Dr. Carlos Trincado
1:00 – 1:20 p.m.

“Nutritional Support for Ruminants in Winter” presented by Dr. Jeff Lakritz
1:20 – 1:40 p.m.

“How Much Money Stayed on the Farm? 2018 Ohio Corn & Soybean Production Costs” presented by Dianne Shoemaker
1:40 – 2:00 p.m.

The complete schedule for the Ask the Expert sessions and other events at the 2019 Farm Science Review can be found at: https://fsr.osu.edu/

Additional farm management information from OSU Extension can be found at ohioagmanager.osu.edu or farmoffice.osu.edu

Source:
David Marrison, OSU Extension
740-622-2265
Marrison.2@osu.edu

#leanonyourlandgrant

Back-to-school means different laws apply to youth farm workers

by: Peggy Kirk Hall, Associate Professor, Agricultural & Resource Law

Originally published at: https://farmoffice.osu.edu/blog/mon-08262019-909am/ohio-ag-law-blog%E2%80%94back-school-means-different-laws-apply-youth-farm-workers

When kids head back-to-school, it’s time for farmers to do some homework and recall the rules that apply to youth working on farms during the school year.   Once school is in session, Ohio labor laws place restrictions on the times of day and number of hours that youth under the age of 18 can work on a farm.  The laws don’t apply to parents, grandparents, or legal guardians, however.  For other farm employers, be aware that the laws vary according to the age of the minor and some require written parental consent.  Here’s a quick refresher:

16 and 17 year olds

  • Cannot work before 7:00 a.m. on school days, with the exception that they can work starting at 6:00 a.m. if they were not working past 8:00 p.m. the night before.
  • Cannot work after 11:00 p.m. on a school night, which means a night when the minor has school the next day.
  • No daily or weekly limits on the number of hours the youth can work.

14 and 15 year olds

  • Cannot work during school hours while school is in session.
  • Cannot work before 7:00 a.m. or after 7:00 p.m., but can work until 9:00 p.m. from June 1 to September 1 or during any school holiday or break lasting more than 5 weekdays.
  • Cannot work more than 3 hours during a school day or more than 8 hours during a non-school day.
  • Cannot work more than 18 hours in a week while school is in session, unless the job is part of a work education program such as vocational training or work study.

12 and 13 year olds

  • The same time restrictions and daily and weekly hour limits for 14 and 15 year olds (above) apply to 12 and 13 year olds, but there is no exception to the 18 hour weekly limit for vocational training or work study programs.
  • Employer must obtain written parental consent for the youth to be working, unless the youth’s parent or legal guardian also works on the same farm.

Under 12 years old

  • Can only work on a farm where employees are exempt from the federal minimum wage, which includes a farms of an immediate family member or a “small farm” that used fewer than 500 “man days” of agricultural labor in any calendar quarter the preceding year.  A “man day” is a day during which an employee performs agricultural work for at least one hour.
  • Exception to the above:  local youths 10 and 11 may hand harvest short-season crops outside school hours for no more than 8 weeks between June 1 and October 15 if their employers have obtained special waivers from the U.S. Secretary of Labor.
  • The same daily time restrictions and daily and weekly hour limits for 14 and 15 year olds (above) apply to youth under 12 years old, but there is no exception to the 18 hour weekly limit for vocational training or work study programs.
  • Employer must obtain written parental consent for the youth to be working.

The other labor laws that typically apply to youth doing agricultural work on a farm continue to apply throughout the school year. For example, employers must maintain records for youth employees, provide a written agreement of compensation and a statement of earnings on payday, and a 30-minute rest period if the youth works more than five consecutive hours. An employer can’t assign any youth under the age of 16 with a “hazardous” job or task unless the youth is 14 or 15 and has a certificate of completion for tractor or machine operation. Further information about these and other laws that apply to youth under 18 working on a farm is in our new Law Bulletin, Youth Labor on the Farm: Laws Farmers Need to Know, available here.

https://farmoffice.osu.edu/sites/aglaw/files/site-library/YouthLabor.pdf

Changes on the Horizon for H-2A Temporary Agricultural Labor Rules

Written by Evin Bachelor, Law Fellow, OSU Extension Agricultural & Resource Law Program

Originally published at: https://farmoffice.osu.edu/blog/thu-08292019-1114am/ohio-ag-law-blog-changes-horizon-h-2a-temporary-agricultural-labor-rules

The U.S. Department of Labor (DOL) says that it has found a number of inefficiencies in the H-2A temporary agricultural labor visa program, and the department has a solution: change the program’s rules. The DOL has proposed a number of administrative rule changes that it believes will make the approval process move along quicker, relieve burdens on U.S. farms, and create a more level playing field with regards to pay. Before we talk about the rule changes, let’s recap what the H-2A program is.

H-2A is a visa program for seasonal agricultural laborers from other countries.

Labor shortages have plagued farms across the United States for decades. Congress first created a visa program for non-immigrant labor in the early 1950s, but it wasn’t until 1986 that Congress established the H-2A visa program for temporary agricultural workers. Under this program, farmers may apply to employ H-2A workers on their farm on a temporary or seasonal basis for up to a year, but may apply to renew the worker’s visa for up to three total years.

In order to hire H-2A workers, an employer must certify in an application to the DOL that there are not enough qualified domestic workers willing and able to perform temporary and seasonal agricultural labor. In order to prove that there is not enough domestic labor, the farmer must demonstrate an effort to advertise the available work in the local area.

Further, the farmer must demonstrate to the DOL that employing foreign workers will not negatively affect the wages and working conditions of similarly employed U.S. workers. In other words, a farmer can’t hire foreign labor because it’s cheaper. A farmer is expected to pay the foreign workers the same as the farmer would pay domestic workers, based upon the higher of the DOL’s Adverse Effect Wage Rate, minimum wage, or prevailing wage.

What does the Department of Labor seek to change?

The DOL proposes to make several changes to the H-2A program’s administrative rules. Some of these changes update the rules to reflect what is already happening, while some make slight changes to the program’s overall scope.

  • Mandate e-filing. The DOL currently allows farmers to submit their applications online or in hard copy, but reports that 4/5 of applications are completed online. A review by the DOL has found that online applications get completed more quickly, have fewer errors, and reduce costs relative to hard copy submissions. Under the new rule, the DOL would require all applications to be completed online, unless the farmer has a disability or does not have internet access.
  • Allow e-signatures. The DOL currently requires farmers to sign a hard copy of their applications and either scan the document into the application or mail it. Under the new rule, the DOL would accept e-signatures as equal to handwritten signatures.
  • Subdivide the adverse effect wage rate based upon specific agricultural occupations. In the previous section, we noted that the farmer must pay the foreign workers the same as he or she would pay domestic workers. One way to determine that wage is to use the DOL’s Adverse Effect Wage Rate. Currently, the DOL has one rate for a state or region based upon the combined numbers for field and livestock workers. Under the new rule, the DOL would use Farm Labor Survey data to subdivide agricultural occupations in order to ensure that higher paying occupations, such as supervisors of farmworkers and construction laborers on farms, use an Adverse Effect Wage Rate that properly reflects the wages of those higher paying occupations, rather than one general rate for all agricultural workers.
  • Update the methodology for calculating prevailing wage standards. Another way to calculate the minimum wages of H-2A laborers is to base their pay off of the prevailing wage. The current method of calculating the prevailing wage, which has not been updated since 1981, requires in-person interviews of employers. Under the new rule, the DOL would eliminate the in-person requirement and allow states to collect data using more modern methods.
  • Incorporate guidance letters regarding animal shearing, commercial beekeeping, custom combining, and reforestation occupations into formal rules. When asked for an interpretation of its rules and policies, a federal agency may issue a guidance letter to the person seeking an interpretation. These guidance letters are not necessarily binding, and have no general application beyond the person seeking the interpretation. By incorporating the guidance into a formal rule, the interpretation holds the force of law. The DOL identified these occupations as unique relative to other agricultural occupations, and created a special set of procedures to obtain H-2A laborers to work these types of jobs.
  • Expand the definition of “agriculture” to include reforestation and pine straw activities. Currently, reforestation and pine straw occupations are only available for H-2B applications, which are for non-agricultural occupations. Under the new rule, these activities would be eligible for the agricultural based visa.
  • Reduce the time an employer must allow a domestic worker to apply for a job to 30 days. Currently, the DOL requires a farmer to hire all eligible, willing, and qualified U.S. workers who make themselves available to work until the half way point in the H2-A contract period. This means that if a farmer has H-2A laborers working under a six-month contract, then the farmer must hire any eligible, willing, and qualified domestic worker during the first three months of the contract. Under the new rule, the farmer would only have to leave such opportunity open to domestic workers for 30 days.
  • Allow an employer to stagger the entry of H-2A labor. Sometimes a farmer does not need all of the H-2A labor to arrive at once, but rather needs some to start on one date and then others to start on a different date. Currently, this would require the farmer to submit an application for each date on which the farmer needs H-2A labor. Under the new rule, the farmer would be able to submit one application but stagger the start dates of his or her workers over the course of 120 days. This 120-day clock begins on the day the first H-2A workers enter the U.S.

For more information about the proposed changes, visit the proposed rule’s entry on the Federal Register HERE.

https://www.federalregister.gov/documents/2019/07/26/2019-15307/temporary-agricultural-employment-of-h-2a-nonimmigrants-in-the-united-states

The public may submit comments until September 24, 2019.

As part of the public rulemaking process, the DOL is seeking public input on the proposed rule changes. Members of the public may submit written comments to the DOL until Tuesday, September 24, 2019.

You may submit a comment online (visit https://www.regulations.gov/) or by mail (send to Adele Gagliardi, Administrator, Office of Policy Development and Research, Employment and Training Administration, U.S. Department of Labor, 200 Constitution Avenue NW, Room N-5641, Washington, DC 20210). When mailing comments, be sure to include the rule’s Regulatory Information Number (RIN): 1205-AB89.

Corn Market Considerations

By: Clint Schroeder OSU Extension

Originally Published on

The United States Department of Agriculture (USDA) released their World Agriculture Supply and Demand Estimates (WASDE) report earlier this week and it has certainly taken the market by surprise. The debate continues to rage over how acres are classified by USDA and if the information contained in the report is accurate. The WASDE reported that corn acres nationally are at 90 million with another 11.2 million classified as Prevented Plant. The USDA also increased their national yield forecast to an average of 169.5 bushels per acre. This came as a major shock to the market and sent corn futures sharply lower. The December ’19 corn futures have traded 61 cents lower in the days following the report.

This report is especially problematic for producers in Ohio that have not forward contracted any bushels based on uncertainty of yields associated with delayed plantings.  There are also producers that are holding old crop corn in hopes that the cash price would reach levels over $5. This has lead to a very strong regional basis through the summer. It has also begun the process of demand rationing.  One of the major end users in Ohio is obviously the ethanol industry.  Unfortunately, September ethanol futures on the Chicago Board of Trade are trading at their lowest levels since October of 2014. One of the reasons for this is increased stocks. The industry closed the month of July with a new record of 24.5 million barrels stockpiled.  That represents an increase of 11% from the previous year. Needless to say these cumbersome stocks combined with a low futures price and a higher cash corn price, due to the strong basis, have had a negative impact on ethanol margins. It is important for producers to be aware of this situation as any significant rally in the futures or strengthening of the basis will ratchet up the pressure on ethanol plant managers. This could lead to the temporary shutdowns at plants throughout Ohio as managers wait for margins to improve.

Provided by Stephanie Karhoff – OSU Extension

The USDA will release the next WASDE on September 12th and it is unlikely that it will have as great of an impact as the August report. Many of the questions that farmers and traders have been left with will not be answered fully until after harvest data comes in. Given the unprecedented number of unplanted or delayed acres there are many questions on how many acres will actually end up harvested for grain. Ohio had reported over 880,000 of prevent plant corn acres to the USDA as of August 1st.  This will continue to be reflected in a stronger than normal basis in those areas that were most impacted. There also remains plentiful speculation on the possibilities of meeting the yield numbers that USDA has forecasted.

15 Measures of Dairy Farm Competitiveness Bulletin Revised

by: Chris Zoller, Extension Educator, ANR in Tuscarawas County

Originally published in 1997, the 15 Measures of Dairy Farm Competitiveness is an Ohio State University Extension publication that has undergone revisions and is now available for use by dairy farmers, lenders, and others interested in dairy farm finances. The bulletin is available at https://dairy.osu.edu or by contacting your local Ohio State University Extension office.

The measures described in the bulletin represent key characteristics of the most competitive dairy producers in the Midwest. While a single dairy may not meet all 15 measures, those that meet the majority should maintain long-term competitiveness. The measures fall into the following broad areas which provide an overview of the competitiveness of a dairy farm business:

  1. Rate of production
  2. Cost control
  3. Capital efficiency
  4. Profitability
  5. Liquidity
  6. Repayment schedule
  7. Solvency
  8. Mission
  9. Maintain family’s standard of living
  10. Motivated labor force
  11. Capturing dairy manure nutrients

The bulletin provides a summary of each measure, along with instructions for calculating, evaluating, and interpreting the measure, followed by a discussion of the competitive range.

The first measure, Rate of Production: Pounds of Milk Sold per Worker, evaluates the pounds of Energy Corrected Milk (ECM) sold per worker. ECM is calculated using the following formula:

ECM = (7.2 x lb of protein) + (12.95 x lb of fat) + (0.327 x lb of milk)

 

Competitive Level Example
1,000,000 lbs per worker 8,500,000 lb of ECM sold/(20,000 hrs/2,500 hrs) = 1,065,500 pounds of milk sold per worker

Pounds of ECM sold per worker is an important tool for evaluating the productivity of workers and cattle. It combines efficient labor utilization with good to excellent herd production. If all feed is purchased, the general rule is to double these benchmarks.

Because free-stall parlor systems can handle more cows, these systems allow more pounds of milk per year per worker than tie stall or stanchion systems. Tie stall or stanchion barns entail considerably higher costs per cow than larger, modern free-stall facilities. The combination of lower investment per cow and more efficient labor utilization make free-stall housing systems much more economical because they generally result in lower costs for producing each unit of milk. However, existing tie stall or stanchion facilities may be able to compete with freestall systems if the operation carries little or no debt.

Fewer pounds of milk per worker will likely be sold per year for small versus large breed herds, but the value of ECM sold per year may be similar under similar management systems. This occurs because of the higher value per cwt of milk for the small breeds of dairy cattle (milk is higher in concentration of fat and protein). However, because the value of milk sold is affected by milk price fluctuations, gross milk sales is not a very useful tool for measuring productivity trends over time.

If the pounds of milk sold per worker is below the competitive level:

  1. Evaluate herd productivity. To achieve the desired level of pounds of ECM sold per worker, cows will most likely need to be above average in production for their breed. Many competitive farmers implement strategies to increase herd productivity. Some strategies include feeding balanced rations, optimizing cow comfort, using proven milking technologies, improving cow flow in the parlor, milking more than two times per day, and filling facilities over 100% when labor is only slightly affected.
  2. Evaluate labor efficiency. Antiquated facilities and uncomfortable working conditions reduce labor efficiency. Careful hiring also plays an important role in labor efficiency. Employee training, motivation, and pride in doing a job well help workers to be more efficient and effective, whether they are family members or unrelated employees. Workers in tie stall or stanchion systems should be able to handle30 to 35 cows per FTE, including raising crops. Workers in free-stall systems should be able to handle 40 to 50 cows per FTE, including raising crops. Efficiently operating parlors will turn a minimum of four times per hour.
  3. Set a realistic goal. Collect information for your own farm, compare your performance with the goal, and take appropriate corrective action, if needed.

For additional information, visit https://dairy.osu.edu to access a copy of the 15 Measures of Dairy Farm Competitiveness bulletin. Ohio State University Extension educators and specialists are available to analyze, evaluate, and provide recommendations to help you be successful.

This article was originally published in Farm and Dairy, August 29, 2019.

 

 

 

 

Solar Leasing Guide Available

By: Peggy Kirk Hall
Source: https://farmoffice.osu.edu/blog
Large “utility-scale” solar energy development is on the rise in Ohio.  In the past two years, the Ohio Power Siting Board has approved six large scale solar projects with generating capacities of 50MW or more, and three more projects are pending approval.   These “solar farms” require a large land base, and in Ohio that land base is predominantly farmland.   The nine solar energy facilities noted on this map will cover about 16,500 acres in Brown, Clermont, Hardin, Highland and Vinton counties.  About 12,300 of those acres were previously used for agriculture.

With solar energy development, then, comes a new demand for farmland:  solar leasing.  Many Ohio farmland owners have received post cards and letters about the potential of leasing land to a solar energy developer.  This prospect might sound appealing at first, particularly in a difficult farming year like this one.  But leasing land for a solar energy development raises many implications for the land, family, farm operation, and community.  It’s a long-term legal commitment–usually 25 years or more–that requires careful assessment and a bit of homework.

To help landowners who are considering solar leasing, we’ve joined forces with Eric Romich, OSU Extension’s Field Specialist in Energy Education, to publish the Farmland Owner’s Guide to Solar Leasing.  The online guide explains the state of solar energy development in Ohio, reviews initial considerations for leasing farmland to solar, and describes legal documents and common terms used for solar leasing.  The guide’s solar leasing checklist organizes the information into a list of issues to consider, things to do, people to consult, and questions to ask before deciding whether to enter into a solar lease.

The Farmland Owner’s Guide to Solar Leasing is available at no cost on our Farm Office website, here.  A separate Law Bulletin of The Farmland Owner’s Solar Leasing Checklist is also available on Farm Office, here.  We produced the guide in partnership with the National Agricultural Law Center at the University of Arkansas, with funding from the National Agricultural Library, Agricultural Research Service, at the United States Department of Agriculture.

“Timber Harvesting-Things to Consider” program held at Zaleski State Forest on Friday, September 13

Timber harvest is a tool you can utilize to not only provide much needed income, but also to help you achieve a wide range of goals from improving forest health to enhancing wildlife habitat. However, without proper planning and implementation, harvests can have long-term negative consequences for your woodland and for your family’s ability to earn a sustainable income from your property in the future.

Timber Harvesting-Things to Consider, a program designed to help you make informed decisions about harvesting timber, will take place at the Zaleski – ODNR Complex on September 13. If you are thinking about selling timber in the future, consider attending this workshop where you will have the opportunity to:

Learn how to make sure your timber harvest is compatible with your goal

Obtain information on how to market and sell your timber to ensure you receive a competitive price

Understand where to get help with planning and implementation of your timber harvest

Visit properly planned and implemented timber harvests at Zaleski State Forest

Learn about Call Before You Cut (1-877-424-8288 or http://callB4Ucut.com) and other available resources

The program starts at 9:00 AM and ends at 3:30 PM. A registration fee of $12 will cover the cost of lunch and program materials.

Please RSVP by calling OSU Extension Vinton County at 740-596-5212, or email Dave Apsley at apsley.1@osu.edu by September 9. The Zaleski ODNR Complex is located at 29371 Wheelabout Road, McArthur, Ohio 45651

“A Day in the Woods” and the “2nd Friday Series” programs run from May through November and are sponsored by the Education and Demonstration Subcommittee of the Vinton Furnace State Forest with support from Ohio State University Extension, Ohio Department of Natural Resources Divisions of Forestry and Wildlife, Central State University Extension, USDA Forest Service, Vinton County Soil and Water Conservation District, National Wild Turkey Federation, Pixelle Specialty Solutions, Ohio Tree Farm Committee, U.S. Fish and Wildlife Service, Hocking College, and Ohio’s SFI Implementation Committee.

“Ask the Expert” Area Seeks to Help Farmers Mitigate the Challenges of 2019 at this year’s Farm Science Review

Each year, faculty and staff of The Ohio State University address some of the top farm management challenges which Ohio farmers are facing during the “Ask the Expert” sessions held each day at the Farm Science Review at the Molly Caren Agricultural Center near London, Ohio.  The 20 minute “Ask the Expert” presentations at Farm Science Review are one segment of the College of Food, Agricultural, and Environmental Sciences (CFAES) comprehensive extension education efforts during the three days of the Farm Science Review which will be held September 17-19 in London, Ohio.

The 2019 growing season has particularly challenging for Ohio growers and producers due to the historic rainfall in Ohio. Twenty-seven of this year’s “Ask the Expert” sessions will feature discussions aimed at helping farmers mitigate the challenges faced by agricultural producers in 2019 and beyond.   Our experts will share science-based recommendations and solutions to the issues growers are facing regarding weather impacts, tariffs, and low commodity prices.   Producers are encouraged to attend one or more of the sessions throughout the day.

The sessions will take place in the Ohio State Area in the center of the main Farm Science Review exhibit area located at 426 Friday Avenue. The farm management sessions will be featured include:

Tuesday, September 17, 2019

“Tax Strategies Under the New Tax Law” presented by Barry Ward 10:00 – 10:20 a.m.

“Climate Smart- Weather, Climate & Extremes-Oh My!” presented by Aaron Wilson 10:20 – 10:40 a.m.

 “Before the Pearly Gates- Getting Your Farm Affairs in Order” presented by David Marrison 10:40 – 11:00 a.m.

“Crop Inputs & Cash Rent Outlook for 2020” presented by Barry Ward 11:00 – 11:20 a.m.

“Farm Stress-We Got Your Back” presented by Dee Jepsen 11:20 – 11:40 a.m.

“Farm Income Forecasts: Are Farmers Experiencing Financial Stress?” presented by Ani Katchova  12:20 – 12:40 p.m.

“How Much Money Stayed on the Farm? 2018 Ohio Corn & Soybean Production Costs” presented by Dianne Shoemaker  12:40 – 1:00 p.m.

“Where Are We on U.S. Trade Policy” presented by Ian Sheldon 1:00 – 1:20 p.m.

“Farm Accounting: Quicken or Quickbooks” presented by Wm. Bruce Clevenger  1:20 – 1:40 p.m.

“Commodity Markets – Finding Silence in the Noise” by Ben Brown 1:40 – 2:00 p.m.

Wednesday, September 18, 2019

“Climate Smart- Weather, Climate & Extremes-Oh My!” presented by Aaron Wilson 10:00 – 10:20 a.m.

“Solar Leasing Options” presented by Peggy Hall & Eric Romich 11:00 – 11:20 a.m.

 “Where Are We on U.S. Trade Policy” presented by Ben Brown 11:20 – 11:40 a.m.

“Crop Inputs & Cash Rent Outlook for 2020” presented by Barry Ward 12:00 – 12:20 p.m.

“Commodity Markets – Finding Silence in the Noise” by Ben Brown 12:20 – 12:40 p.m.

 Public Perception Risk: Building Trust in Modern Agriculture by Eric Richer 12:40 – 1:00 p.m.

“Farm Stress-We Got Your Back” presented by Dee Jepsen 1:00 – 1:20 p.m.

“How Much Money Stayed on the Farm? 2018 Ohio Corn & Soybean Production Costs” presented by Dianne Shoemaker 1:20 – 1:40 p.m.

 “Tax Strategies Under the New Tax Law” presented by Barry Ward 2:00 – 2:20 p.m.

 “Using On-Farm Research to Make Agronomic and Return on Investment Decisions” presented by Sam Custer 2:40 – 3:00 p.m.

Thursday, September 19, 2019

“Farm Stress-We Got Your Back” presented by Dee Jepsen 10:20 – 10:40 a.m.

“Tax Strategies Under the New Tax Law” presented by Barry Ward 10:40 – 11:00 a.m.

 “Solar Leasing Options” presented by Peggy Hall & Eric Romich   11:20 – 11:40 a.m.

 “Commodity Markets – Finding Silence in the Noise” by Ben Brown 11:40 – Noon

 “Crop Inputs & Cash Rent Outlook for 2020” presented by Barry Ward 12:00 – 12:20 p.m.

 “Where Are We on U.S. Trade Policy” presented by Ben Brown 12:40 – 1:00 p.m.

 “How Much Money Stayed on the Farm? 2018 Ohio Corn & Soybean Production Costs” presented by Dianne Shoemaker 1:40 – 2:00 p.m.

The complete schedule for the Ask the Expert sessions and other events at the 2019 Farm Science Review can be found at: https://fsr.osu.edu/

Additional farm management information from OSU Extension can be found at ohioagmanager.osu.edu or farmoffice.osu.edu

Source:

David Marrison, OSU Extension

740-622-2265

Marrison.2@osu.edu

#leanonyourlandgrant

Qualified Business Income Deduction for Sales to Cooperatives – Proposed Regulations

by: Barry Ward, Leader, Production Business Management
Director, OSU Income Tax Schools

Soon after the Tax Cuts and Jobs Act became law in December of 2017 it became evident that cooperatives had been granted a significant advantage under the new tax law. Sales to cooperatives would be allowed a Qualified Business Income Deduction (QBID) of 20% of gross income and not of net income. Sales to businesses other than cooperatives would be eligible only for the QBID of net income which was a significant disadvantage. Suddenly cooperatives had an advantage that non-cooperative businesses couldn’t match and most of the farm sector scrambled to position themselves to take advantage of this tax advantage. Some farmers directed larger portions of their sales or prospective sales toward cooperatives. Non-cooperative businesses lobbied for a change to this piece of the new tax law while looking for ways to add a cooperative model to their own businesses to stay competitive.

Congress passed the Consolidated Appropriations Act of 2018 in March of 2018 which eliminated this advantage to cooperatives and replaced it with a new hybrid QBID for sales to cooperatives which offered more tax neutrality between sales to cooperatives and non-cooperatives. While this new legislation leveled the playing field between cooperatives and non-cooperatives, it left many questions unanswered; chief among them was how taxpayers should allocate expenses between sales to cooperatives and non-cooperatives.

One area that was clarified for calculating the QBID for all businesses including cooperatives was how certain deductions should be handled with respect to the Qualified Business Income Deduction (QBID).

For purposes of the QBID (IRC §199A), deductions such as the deductible portion of the tax on self-employment income under § 164(f), the self-employed health insurance deduction under § 162(l), and the deduction for contributions to qualified retirement plans under § 404 are considered attributable to a trade or business (including farm businesses) to the extent that the individual’s gross income from the trade or business is taken into account in calculating the allowable deduction, on a proportionate basis.

Under the final regulations, expenses for half the self-employment (SE) tax, self-employed health insurance, and pension contributions must be subtracted from preliminary QBI figure, before any cooperative reductions are made (if applicable).

While final regulations on the new QBID were published on Jan. 18, 2019, there were still many questions left unanswered as to how the deduction would be handled in relation to cooperatives. As the QBID is calculated differently between the income from sales to cooperatives and non-cooperatives, taxpayers and tax practitioners were left with uncertainty.

A simplified explanation of the steps used to calculate the QBID under Internal Revenue Code (IRC) §199A for income attributable to sales to cooperatives is listed here:

Step 1: First, patrons calculate the 20 percent §199A QBID that would apply if they had sold the commodity to a non-cooperative.

Step 2: The patron must then subtract from that initial §199A deduction amount whichever of the following is smaller:

  • 9 percent of the QBI allocable to cooperative sale(s) OR
  • 50 percent of W-2 wages paid allocable to income from sales to cooperatives

Step 3: Add the “Domestic Production Activities Deduction (DPAD)-like” deduction (if any) passed through to them by the cooperative pursuant to IRC §199A(g)(2)(A). The determination of the amount of this new “DPAD-like” deduction will generally range from 0 to 9 percent of the cooperative’s qualified production activities income (QPAI) attributable to that patron’s sales.

Parts of the new tax law do offer some simplification. Calculating the QBID isn’t necessarily one of those parts. The result of all of these calculations is that income attributable to sales to cooperatives may result in an effective net QBID that is:

  • Possibly greater than 20% if the farmer taxpayer pays no or few W2 wages and coop passes through all or a large portion of the allocable “DPAD-like” deduction
  • Approximately equal to 20% if the farmer taxpayer pays enough W2 wages to fully limit their coop sales QBID to 11% and the coop passes through all allocable “DPAD-like” deduction
  • Possibly less than 20% if farmer taxpayer pays enough W2 wages to fully limit their coop sales QBID to 11% and the coop passes through less than the allocable “DPAD-like” deduction

On June 18th, the IRS released proposed regulations under IRC §199A on the patron deduction and the IRC §199A calculations for cooperatives. The proposed regulations provide that when a taxpayer receives both qualified payments from cooperatives and other income from non-cooperatives, the taxpayer must allocate deductions using a “reasonable method based on all the facts and circumstances.” Different reasonable methods may be used for the different items and related deductions. The chosen reasonable method, however, must be consistently applied from one tax year to another and must clearly reflect the income and expenses of the business.

So what “reasonable methods” might be accepted by the IRS? The final regulations (when they are provided) may give us further guidance or we may be left to choose some “reasonable” method in allocating expenses between the two types of income. Acceptable methods may include allocating expenses on a prorated basis by bushel/cwt or by gross sales attributable to cooperatives and non-cooperatives. Producers may also consider tracing costs on a per field basis and tracking sales of those bushels/cwt to either a cooperative or non-cooperative.

Included in the proposed regulations released in June was a set of rules for “safe harbor”. A taxpayer with taxable income under the QBID threshold ($157,500 Single Filer / $315,000 Joint Filer) may ratably apportion business expenses based on the amount of payments from sales to cooperative and non-cooperatives as they relate to total gross receipts. In other words, expenses may be allocated between cooperative and non-cooperative income based on the respective proportions of gross sales that fall to cooperatives and non-cooperatives.

Some questions that haven’t been answered clearly is how certain other income should be allocated between income from cooperatives and non-cooperatives. Tax reform now requires farmers to report gain on traded-in farm equipment. In many cases, farm income will be negative and all of the income for the business will be from trading-in farm equipment. The question is how do we allocate this income (IRC §1245 Gain)? Some commentators contend that none of these gains should be allocated to cooperative income which would eliminate the issue, however, the depreciation deduction taken on the equipment was likely allocated to cooperative income, thus reducing the effect of the 9% of AGI patron reduction. This would suggest that these gains may have to be allocated between cooperative and non-cooperative income.

How should government payments be allocated? If a farmer sells all of their commodities to a cooperative and receive a government payment (i.e. ARC or PLC), should that be treated as cooperative income or not. Hopefully, the final regulations will provide some further clarity on these issues.

The information in this article is the opinion of the author and is intended for educational purposes only. You are encouraged to consult professional tax or legal advice in regards to your facts and circumstances regarding the application of the general tax principles cited in this article.