Soybean Price Prospects Moving into 2020

By: Todd Hubbs, Department of Agricultural and Consumer Economics University of Illinois .December 9, 2019. farmdoc daily (9):230

The two major drivers of uncertainty impacting soybean prices in 2019 appear set to carry over into 2020.  The status of trade negotiations with China continues to move soybean markets despite numerous fits and starts in the process. Another USDA estimate of the 2019 soybean crop comes out in January.  Without supportive information on either issue, the sustainability of the recent price rally into 2020 seems remote.

Nearby soybean futures prices since the middle of September ranged between $8.70 and $9.40.  The highest prices came in mid-October in association with a reduced soybean production level in the October WASDE report and thawing relations on the trade front.  The lowest prices occurred in early December after another round of trade frictions.  Soybean basis during the recent rally in central Illinois sits in a stronger position than during the October price jump.  Soybean basis strengthened almost twenty cents in the region from October levels with cash prices at soybean processors showing particularly strong bids. Continue reading

Registration is Open for Farmer and Farmland Owner Income Tax Webinar

By:  Barry Ward, Director, OSU Income Tax Schools

Columbus, Ohio – Are you getting the most from your tax return? Farmers and farmland owners who wish to increase their tax knowledge should consider attending this webinar that will address tax issues specific to this industry. Content focuses on important tax issues and will offer insight into new tax legislation and further guidelines that have been released this year.

Mark your calendars for January 13th, 2020 to participate in this live webinar from 1 to 3 pm. Continue reading

Weekly Outlook: Acreage in 2020

By: Todd Hubbs, Department of Agricultural and Consumer Economics, University of Illinois. November 25, 2019. farmdoc daily (9):222

The 2019 crop year will live long in the memory.  A record amount of prevent plant acres, delayed harvest, and considerable dismay over USDA reports compounded the uncertainty associated with the trade war.   Speculation about the acreage levels in 2020 is already underway.  Current market conditions support acreage increases in corn and soybeans in 2020.  It appears only the magnitude of those increases is in doubt.

A variety of surveys and projections by industry analysts place 2020 corn acreage close to 94 million acres.  Soybean acreage projections come in around 84 million acres. Continue reading

USDA Will Issue Second MFP Payments Before Thanksgiving

Source: USDA

U.S. Secretary of Agriculture Sonny Perdue announced the second tranche of 2019 Market Facilitation Program (MFP) payments aimed at assisting farmers suffering from damage due to unjustified trade retaliation by foreign nations. The payments will begin the week before Thanksgiving. Producers of MFP-eligible commodities will now be eligible to receive 25% of the total payment expected, in addition to the 50% they have already received from the 2019 MFP. Continue reading

Change Your Employee Recruitment and Interview Mindset

By: Rory Lewandowski, Extension Educator Wayne County

Originally written for Dairy Excel column for the 10-31-19 Farm and Dairy

Labor is an important component of any farm operation.  Beyond just checking the box that a certain task has been completed, farm profitability often turns on how well a task was completed, the attention to detail and protocol.  Improving employee recruiting and interviewing skills increases the chance of hiring the right employee for your farm situation.  For many farms, employee recruitment, interviewing and hiring requires a mindset adjustment. Continue reading

When Creating 2020 Budgets, Keep in Mind Family Living Costs

By: Bradley Zwilling, Illinois FBFM Association and Department of Agricultural and Consumer Economics. University of Illinois. farmdoc Daily (9):216

In 2018, the total noncapital living expenses of 1,306 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) average was $77,999–or $6,500 a month for each family. This average was 2.3 percent lower than in 2017.  Another $4,579 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment.  Thus, the grand total for living expenses averaged $82,578 for 2018 compared with $85,542 for 2017, or a $2,964 decrease per family. Continue reading

Farm Bill Meetings To Be Held Across Ohio

By: Davis Marrison, OSU Extension

Click here for complete article with locations of meetings

Ohio State University Extension and the USDA Farm Service Agency in Ohio are partnering to provide a series of educational Farm Bill meetings this winter to help producers make informed decisions related to enrollment in commodity programs.

The 2018 Farm Bill reauthorized the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) safety net programs that were in the 2014 Farm Bill. While the ARC and PLC programs under the new farm bill remain very similar to the previous farm bill, there are some changes that producers should be aware of.

Farm Bill meetings will review changes to the ARC/PLC programs as well as important dates and deadlines. Additionally, attendees will learn about decision tools and calculators available to help, which program best fits the needs of their farms under current market conditions and outlook. Continue reading

Measuring Financial Stress

By: Michael Langemeier, Center for Commercial Agriculture, Purdue University. November 1, 2019. farmdoc daily (9):206

Financial stress is typically measured using a profitability measure and a solvency measure.  For example, profitability could be measured using the operating profit margin ratio and solvency could be measured using the debt to asset ratio.  As noted in Langemeier (2016) and Langemeier and Yeager (2018), the operating profit margin is a useful benchmark when comparing financial performance among farms.  The operating profit margin ratio is computed by adding interest expense and subtracting unpaid family and operator labor from net farm income and dividing the result by either value of farm production or gross revenue. Continue reading

The Case for Looking at the ARC-IC (ARC-Individual) Program Option

By: Carl Zulauf and Ben Brown, Ohio State University, and Gary Schnitkey, Krista Swanson, Jonathan Coppess, and Nick Paulson, University of Illinois at Urbana-Champaign, October 2019

Click here for the complete article as PDF

ARC-IC (Agriculture Risk Coverage – Individual) has received less attention than ARC-CO (ARC – County) and PLC (Price Loss Coverage).  ARC-IC is operationally more complex, thus harder to explain and understand.  It pays on only 65% of program base acres while ARC-CO and PLC pay on 85% of base acres.  Nevertheless, ARC-IC is worth considering if an FSA farm has one or more of the appropriate production attributes.  These attributes include (1) 100% prevent plant acres on a FSA farm, (2) high year-to-year production variability, (3) much higher farm than ARC-CO and PLC yields, and/or (4) acres planted to fruits and vegetables.  The prevent plant attribute is more relevant than normal in 2019. Continue reading

Ohio CAUV Values Projected to Decline Through 2020

By: David Marrison, OSU Extension Coshocton Co.

The Current Agricultural Use Valuation (CAUV) program allows farmland devoted exclusively to commercial agriculture to be taxed based on their value in agriculture, rather than the full market value, resulting in a substantially lower tax bill for the farmer.

The formula for CAUV values incorporates agricultural factors (soil types, yields, prices, and non-land costs for corn, soybeans, and wheat) to calculate the capitalized net returns to farming land based on the previous 5 to 10 years. CAUV underwent large-scale changes to its calculation in 2017 that was targeted to reduce the property tax burden of farmland.

A new report, Ohio CAUV Values Projected to Decline Through 2020, shows the projection of CAUV values though 2020. According to the study authors, OSU agricultural economists Robert Dinterman and Ani Katchova forecast a decrease in the assessed value of agricultural land to an average CAUV value of approximately $600 in 2020.

Access this report at:

https://aede.osu.edu/sites/aede/files/publication_files/CAUVProjectionsFall2019.pdf