By: Barry Ward, Leader, Production Business Management & Director, OSU Income Tax Schools
Prevented Planting Crop Insurance Indemnity Payments
With unprecedented amounts of prevented planting insurance claims this year in Ohio and other parts of the Midwest, many producers will be considering different tax management strategies in dealing with this unusual income stream. In a normal year, producers have flexibility in how they generate and report income. In a year such as this when they will have a large amount of income from insurance indemnity payments the flexibility is greatly reduced. Continue reading
By: Barry Ward, Leader, Production Business Management, Director, OSU Income Tax Schools
Ohio cropland values and cash rental rates are projected to decrease slightly in 2019. According to the Western Ohio Cropland Values and Cash Rents Survey, bare cropland values in western Ohio are expected to decline by 1.3 to 2.9 percent in 2019 depending on the region and land class. Cash rents are expected to decrease from one-half a percent to 2.5 percent depending on the region and land class.
The Western Ohio Cropland Values and Cash Rents study was conducted from February through April in 2019. The opinion-based study surveyed professionals with a knowledge of Ohio’s cropland values and rental rates. Professionals surveyed were farm managers, rural appraisers, agricultural lenders, OSU Extension educators, farmers, landowners, and Farm Service Agency personnel. The study results are based on 162 surveys returned, analyzed, and summarized. For the complete survey summary go to the OSU Extension FarmOffice website at:
By: Schnitkey, G., K. Swanson, C. Zulauf, R. Batts and J. Coppess. “Soybean Prevent Planting Decisions in Middle June, Cover Crops, and MFP Payments.” farmdoc daily (9):114, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, June 20, 2019.
Farmers across the Midwest can now take prevent planting payments on soybeans, as final planting dates for crop insurance purposes have arrived. Our comparisons suggest that planting soybeans do not have higher returns than taking a prevent planting payment given a high coverage level on crop insurance. However, the risk for lower returns from planting as compared to taking the prevent planting payment is limited as crop insurance provides a floor on revenue. These risks become greater the later soybeans are planted in the late planting period. The economic advisability of planting soybeans depends on receiving Market Facilitation Payments and no additional Federal aid for prevent planting acres. Our current projections indicate that returns from either prevent planting or planting soybeans will not cover costs and working capital will be eroded. At the end of this article, links to YouTube videos provide the latest information on cover crops and the Market Facilitation Program as well as a general background on preventing planting. Continue reading
By: Gary Schnitkey, Krista Swanson, Jonathan Coppess, and Ryan Batts, Department of Agricultural and Consumer Economics, University of Illinois and Carl Zulauf, Department of Agricultural, Environmental and Development Economics, Ohio State University
Many unplanted acres remain across the Corn Belt and in Illinois. As of the week ending on June 9, only 73% of the intended corn acres and 49% of the soybean acres have been planted in Illinois (Planting Progress, June 10, 2019). In this article, prevent planting decisions on intended corn acres are examined first. For farmers that have not incurred costs, prices must rise before planting corn in mid-June will return more than taking prevent planting payments, for those with that insurance option. In most circumstances, a corn prevent planting payment will have higher returns than planting soybeans. Continue reading
By: Robert Moore, Wright and Moore. Previously published by the Ohio Farmer online
There are several different ways to avoid probate when transferring real estate at death. It is generally better to avoid probate to save time and expenses for the heirs. Each method to avoid probate needs to be understood to be sure the right plan is implemented.
A life estate is one common method to avoid probate on real estate. In this method, the owner of the real estate executes a deed that creates a current right and a future right. Owners retain a life estate, which means they keep control and use of the real estate until they die. The deed identifies the future owner who will inherit the real estate when the current owner dies. This is called the remainder interest. Upon the death of the current owner, the remainder interest is inherited by the heir without going through probate. Continue reading
By: Gary Schnitkey, Krista Swanson, Ryan Batts and Jonathan Coppess with the University of Illinois Department of Agricultural and Consumer Economics University of Illinois and Carl Zulauf, with the Ohio State University Department of Agricultural, Environmental and Development Economics
We stand at a point of extreme price and policy uncertainty. In the Midwest, corn planting is historically late and many acres are or soon will be eligible for prevented planting payments on corn crop insurance policies. On many farms, corn prices have not increased enough to cause net returns from planting corn to exceed net returns from prevented planting. However, the U.S. Department of Agriculture announced a 2019 Market Facilitation Program (MFP) and has currently indicated that payments will be tied to 2019 planted acres. The 2019 MFP could provide incentives to plant crops and not take prevented plantingpayments. Moreover, this program could bring a little used option into play this year: take 35% of the corn prevented planting payment and plant soybeans after the late planting period for corn. Adding confusion to this situation is a disaster assistance program that, has passed Congress and recently signed by President Donald Trump. Continue reading
By: Barry Ward, Assistant Extension Professor, Leader Production Business Management, Department of Agricultural, Environmental, and Development Economics
Wet weather and planting delays throughout much of Ohio and the eastern Cornbelt have many producers thinking about switching corn acres to soybeans or the taking the prevented planting option of their Multiple Peril Crop Insurance policy. Ohio had 9% of intended corn acres planted by May 19thwhich is far behind the 5 year average of 62%. Farms with pre-plant nitrogen or herbicides applied for corn production may have no option to switch to soybeans. Seed availability may also limit choice for some. Continue reading
Eric Richer & Chris Bruynis, OSU Extension Educators
Wet conditions in Ohio and the Eastern Corn Belt has slowed (halted?) planting progress for Ohio producers. According to the May 20th Crop Progress Report by USDA National Ag Statistics Service, Ohio had only 9% corn planted. Surprisingly that was ‘double’ what was planted the week before and well behind the 5-year average of 62% planted. In 2018, Ohio was 69% planted by this report date.
Certainly, the Prevent Plant (PP) crop insurance tool has become a hot topic this year. Many of you have had the chance to attend prevent plant meetings or speak with your crop insurance agent. If not, we will try to briefly summarize your options and strongly suggest you talk to your agent or utilize one of the calculators (see associated “Decision Tools” article by Sam Custer) to determine which option best suits your farm operation. Continue reading
By: Sam Custer, OSU Extension Educator, Darke County
We have reviewed two prevented planting decision tools that can serve as a resource in your decision making process with your crop insurance agent. Both tools also provide resources for determining replant decisions.
In a recent Farmdocdaily article Schnitkey, G., C. Zulauf, K. Swanson and R. Batts. “Prevented Planting Decision for Corn in the Midwest.” farmdoc daily (9):88, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, May 14, 2019 they highlighted their decision tool. Continue reading
By: Todd Hubbs and Scott Irwin, Department of Agricultural and Consumer Economics, University of Illinois. farmDoc Daily
USDA’s release of the Crop Progress report on May 20 showed corn planting at 49 percent nationally. The planting progress in numerous major corn producing states lags behind historical averages significantly. The implications for corn acreage and yield are potentially large in 2019. The purpose of this article is to explore the implications of late planting on corn acreage and yield and investigate the consequences for the corn balance sheet in the 2019-20 marketing year.
Acreage Implications Continue reading