Reducing soybean planting rates can increase income

source: Michael Staton, MSU Extension (edited), John Barker OSU Extension

Results from 40 on-farm replicated trials conducted in Michigan from 2015 to 2018 build a compelling case for reducing soybean planting rates.

Michigan soybean producers have consistently identified planting rates as the highest priority topic to evaluate in on-farm replicated trials. Furthermore, the producers wanted to evaluate the effect of low planting rates on soybean yield and income. The two factors driving the increased interest in reducing soybean planting rates are seed cost and white mold. To help Michigan soybean producers make planting rate decisions, the SMaRT (Soybean Management and Research Technologies) program conducted a total of 40 on-farm replicated trials from 2015 to 2018. Please see Figure 1 for the trial locations.

Eleven planting rate trials were conducted each year from 2015 to 2017 and seven trials were conducted in 2018. Four target planting rates (80,00, 100,000, 130,000, and 160,000 seeds per acre) were compared at all but one location where the lowest rate was not included. Stand counts were taken to determine actual final plant stands at each location in all years. To calculate the income (gross income – seed cost) generated by each planting rate, we used the USDA projected prices and average seed costs for treated seed for each year. None of the varieties planted in the trials were straight line or thin line plant type and a complete seed treatment was used at 33 of the locations.

Because we conducted the trials over four years, we learned how the planting rates performed over a range of growing conditions. Planting conditions were nearly ideal in 2015 but were much more challenging in 2016, 2017 and 2018 as evidenced by the average stand loss shown in Table 1. Statewide record yields were achieved in 2015 and again in 2016. However, yields declined significantly in 2017 due to excessive early rains and a lack of rain in August and September. Yields rebounded in 2018.

The effects of soybean planting rates on yield and income are shown in Fgure 2. The bars represent yield and the lines represent income. The figure clearly shows the year-to-year variability in yield and income. It also shows that the lowest two planting rates were the most profitable in 2015 and 2018 and the highest planting rate was the least profitable each year. Table 2 shows the average yield and income for all 40 locations.

When all 40 sites were combined, the yields from the highest two planting rates were identical and they beat the 100,000 seeds per acre planting rate by less than one bushel per acre and the 80,000 rate by only 2.2 bushels per acre. The 100,000 seeds per acre planting rate generated the most income.

These results are very similar to the 2018 Knox County Soybean Seeding Rate Trials shown below.

Click here to see the 2018 Knox County data from plot #1

Click here to see the 2018 Knox County data from plot # 2

Click here for the 2018 OSU eFields report

Click here for the MSU data mentioned above

Tips for Speaking with Your Lender

by: Chris Zoller, Extension Educator, ANR

2019 is upon us and you may be meeting soon with your lender to discuss financial needs for the year. We all know agriculture is suffering from poor economic conditions – and the outlook for many sectors of the industry doesn’t look real promising. A variety of factors are forcing lenders to be more critical of loan applications. Let’s review a few things you can do to assist your lender as they review your loan application.

Financial Forms:

A year-end Balance Sheet is very helpful and provides a snapshot of the assets, liabilities, and net worth of your farm. Get in the habit of completing one each year for your lender to keep on file and for your own reference so you can monitor changes over time. You can get a blank balance sheet from your lender or access one here: https://farmoffice.osu.edu/farm-management-tools/farm-management-resources.

Cost of Production:

Know your cost of production. What does it cost you to produce 100 pounds of milk? What is your per acre or per ton cost to grow and harvest crops? If you need assistance with determining these, please see: https://farmoffice.osu.edu/ for copies of Ohio State University Extension production budgets and https://farmprofitability.osu.edu/business-summariesfor copies of the Ohio Farm Business Summaries.

Goals:

Why are you requesting money from your lender? What is your goal(s)? What are you hoping to accomplish with the money you are requesting? Will you use the money as an operating loan to plant your crops? Are you planning an expansion? Are you wanting to consolidate existing debt? Regardless of the reason, your lender is going to need to know how you plan to repay the loan. A budget and cash flow projections will help everyone understand how the money will be used and how it will be repaid. Research has proven that you are more likely to accomplish your goals if they are written. Be sure your goals are Specific, Measurable, Attainable, Rewarding, and Timed (SMART). See this Ohio State University Extension fact sheet for information about writing SMART goals: https://ohioline.osu.edu/factsheet/node/767.

Tax Returns:

Your lender may request copies of your tax returns. Make sure you categorize income and expenses the same way each year. This allows the lender to compare apples-to-apples when evaluating your historic income and expenses. Also, if you pre-pay expenses or defer income, make sure your lender is aware of this so they can make accrual adjustments.

Communication:

Communication with your lender is critical. Your lender is interested in understanding your farm, knowing how you are progressing, and what your plans are for the short and long-term. Invite your lender to visit the farm for a tour, a ride in the tractor, or to assist with milking!

Business Plan:

Every lender would love to see each client have a written business plan. A business plan is made up of five parts: Executive Summary, Description, Operations, Marketing Plan, and Financial Plan. The University of Minnesota Extension has a template available at the following site: https://agplan.umn.edu/.

Summary: The items discussed in this article are ones you can control. Focus on these areas and make adjustments accordingly to make improvements. Contact the Knox County Extension Office for assistance.

Legal defenses for agricultural production activities

Source: Ohio Agricultural Aw Blog

Whether producing crops, livestock, or other agricultural products, it can be challenging if not impossible for a farmer to completely prevent dust, odors, surface water runoff, noise, and other unintended impacts.   Ohio law recognizes these challenges as well as the value of agricultural production by extending legal protections to farmers.  The protections are “affirmative defenses” that can shield a farmer from liability if someone files a private civil lawsuit against the farmer because of the unintended impacts of farming.  A court will dismiss the lawsuit if the farmer successfully raises and proves an applicable affirmative legal defense.

In our latest law bulletin, we summarize Ohio’s affirmative defenses that relate to production agriculture.  The laws afford legal protections based on the type of activity and the type of resulting harm.  For example, one offers protections to farmers who obtain fertilizer application certification training and operate in compliance with an approved nutrient management plan, while another offers nuisance lawsuit protection against neighbors who move to an agricultural area.  Each affirmative defense has different requirements a farmer must meet but a common thread among the laws is that a farmer must be a “good farmer” who is in compliance with the law and utilizing generally accepted agricultural practices.  It is important for farmers to understand these laws and know how the laws apply to a farm’s production activities.

To learn more about Ohio’s affirmative defenses for agricultural production activities, view our latest law bulletin HERE.

Agriculture Improvement Act (Farm Bill) of 2018: Summary

Source: Carl Zulauf, Emeritus Professor, and Ben Brown, Program Manager – Farm Management Ohio State University, Department of Agricultural, Environmental, and Development Economics

Some information is beginning to come out regarding the new Farm Bill.  The complete farm bill is 807 pages.  Click on the following link to read the complete 9 page summary compiled by Dr. Carl Zulauf and Ben Brown  Farm Bill-196wwqa

The New Tax Law and the New Business “Qualified Business Income” Deduction

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

The new tax law known as the Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017 and will affect income tax returns for all of us for 2018 (to be filed in the next few months). The headline pieces of the new tax law include new tax brackets, higher standard deductions, elimination of personal exemptions and a new corporate flat tax rate of 21%. This will amount to lower total federal income tax for the large majority of taxpayers and C-corporations. Parts of the new tax law will make tax preparation simpler while parts will add complexity to the process.

With the new lower tax rate for corporations (specifically C-corporations) of 21% (a flat 21% rate) this replaces the old graduated tax brackets for C-corporations that started at 15% and topped out at 35%. The new lower tax rate for C-corporations may have created a decidedly uneven playing field if the new tax law hadn’t included a new deduction for all other businesses. This new Qualified Business Income Deduction (QBID) (sometimes referred to as the Pass-Through Deduction) is a 20% deduction of a businesses’ Qualified Business Income (QBI). Without this, businesses across the U.S. would have been strongly considering a change to a C-Corp structure for income tax purposes. With this QBID, the playing field between the different tax entities is mostly re-leveled. There may be inequalities that show up with the new tax law as it relates to business entity selection but it may take some time for these inequalities to reveal themselves.

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Conservation Tillage Conference: March 5-6 in Ada

A world-renowned scientist will be the keynote speaker on the first day of this year’s Conservation Tillage Conference (CTC) in Ada.  Christine Jones, an Australian Soil Ecologist, will be giving the keynote of the annual event with the topic “Building New Topsoil Through the Liquid Carbon Pathway for Long Term Production and Profit.”  The annual conference is scheduled for March 5thand 6th at Ohio Northern University.  The McIntosh Center and Chapel on campus will once again be the location where about 60 presenters, several agribusiness exhibitors, and approximately 900 participants will come together to learn about the latest topics in crop production.

Farmers will be able to choose from four concurrent rooms that will host a variety of speakers from several land grant universities as well as agricultural agency and industry personnel.  Tuesday, March 5th there will be Corn University; Nutrient Management; Precision Agriculture and Digital Technologies; Cover Crops, No-Till, and Soil-Health speakers in each of these rooms.  Wednesday, March 6ththere will be Cover Crops: Issues and Benefits; New Tri-State Fertilizer Recommendations; Soybean School; Water Quality Research and Best Management Practices; Soil Balancing – Is it Important to Manage the Calcium: Magnesium Ratio in Soils?; and Identity Preserved Crops.

The conference fee is $85 for both days ($65 for one day) if paid online by February 21; registration afterwards and day of the event is $80 for one day or $105 for both days.  Registration includes lunch and break refreshments during the day.  Registration information and a detailed program schedule may be found at http://ctc.osu.edu. The detailed program also includes information on continuing education categories for each presentation.  Certified Crop Advisers (CCA) will be able to receive seven hours of continuing education credits each day.  Hours will be offered in all categories, including hard to get categories of Soil and Water Management and Nutrient Management.

Grain Marketing Webinars Offered

Do you want to do a better job of pricing your corn and soybeans? Is grain marketing a confusing and daunting task? If so, this webinar is for you!

Ohio State University Extension is offering a two-session webinar focused on helping farmers become better grain marketers. Participants will have a better understanding of risk, marketing tools, and the development of written marketing plans. These workshops are funded through a North Central Risk Management Education Grant.  Additional information can be found at http://go.osu.edu/grainplan.

Participants will learn to identify their personal risk tolerance and their farm’s financial risk capacity. Both of these are important in developing a successful grain marketing plan. Participants will also learn how crop insurance products effect marketing decisions and effect risk capacity. Grain marketing consists of understanding and managing many pieces of information. Information on the different grain marketing contracts will be presented. These include basis, hedging, cash, futures, and option contracts.  Additionally, participants will be provided an example of a grain marketing plan and the fundamental principles that should be included.

The courses will be offered on two consecutive Tuesdays, starting on March 12, 2019.  For specific times, as well as program registration instruction, go to http://go.osu.edu/grainwebinar. Cost for the program is $30.00.

To request additional information or have questions answered, contact Amanda Bennett at 937-440-3945 or at bennett.709@osu.edu

Knox County Soybean Starter Fertilizer Trial

A BIG thank you to David & Emily Mitchem for allowing me to put my Soybean Starter Fertilizer trial on their farm this year!

 

The results are listed in the tables below.

The 2018 report is now available in both a print and e-version. To receive a printed copy, stop by the Knox County Extension office.  The e-version can be viewed and downloaded here at go.osu.edu/eFields.

Artificial Intelligence – How Is It Going To Change Our Industry?

Knox County’s 1st Autonomous Tractor

Only 33 days until the 2019 Central Ohio Precision Ag Symposium – Register now!

We are in the midst of unique and exciting times, when agriculture is transforming from the “old” precision agriculture to the era of artificial intelligence.  Artificial intelligence (AI) is a technology that exhibits behavior that could be interpreted as human intelligence. Can we apply artificial intelligence in agriculture? Can a computer be better than man in making decisions.  Can an algorithm beat farmer’s gut instinct and experience?

In recent years, agriculture has gone through a major revolution. From being one of the most traditional sectors, it has become one of the most progressive ones.

Artificial Intelligence will be a part of may presentations at the 2019 Central Ohio Precision Ag Symposium.  This program is sponsored by The Ohio State University Extension, AgInfoTech, Advantage Ag & Equipment, Ag Leader, B&B Farm Service, Beck’s, Capstan, Centerra Co-op, Central Ohio Farmers Co-op, Channel, Clark Seeds, Climate Corp., Evolution Ag, Farm Credit Services, Farm Mobile, First Knox National Bank,  JD Equipment,  Ohio Ag Equipment, Precision Planting, Seed Consultants, Smart Ag and Soil-Max.

Click here for agenda and registration information: CentralOhioPrecisionAg19 FNL-2nc71zi