Making a Change

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

The United States Department of Agriculture Economic Research Service (USDA ERS) announced their farm-level price projections for corn, soybeans, and wheat through 2029 on February 14, 2020.  See the chart below.

It is important to remember that these are only projections using information available today, and these forecasts will likely change with time.  However, using these projections, we are likely to see prices for these three commodities remain relatively flat over the next several years.

Let us assume these projections are correct.  Can you continue to operate your farm business when the price you receive for these commodities remains relatively unchanged for the next several years?  If you do not believe you can, what are your options?

Options to consider and evaluate

Following are options to consider as you evaluate the future of your farm business.  There is no “one-size fits all” approach, as each farm, family, and situation is different.

  • Make no changes. Maybe your age, family circumstances, or other reasons allow you to continue with the status quo.  If that’s the case, continue doing what you’ve been doing.
  • Plant more acres of the commodity that is likely to yield the highest dollar return. This may mean that you grow less of one or more crops to grow more of another on acreage you already control.  It might mean you rent or buy additional acres to expand.  Or it may mean not farming some of the less productive ground.  Obviously, the unknown is which commodity will net the highest return over time.
  • Do something completely different. Like the saying goes, “if you do what you’ve always done, you’ll get what you’ve always gotten.”  However, before making a change, do your homework!

Do your homework

Why is it important to do your homework before making changes?  Here are a few items to consider:

  • Know your current financial position. Evaluate your balance sheet, income statement, and financial ratios to understand your performance.  Contact your county Extension Educator to discuss the FINPACK program to perform this analysis.  Knowing this information can help you evaluate alternatives.
  • Do you know your cost to produce corn, soybeans, and wheat? Furthermore, have you calculated the return for each property you are farming?  Is there ground you should not be farming?
  • What are your goals? As you write your goals, make them Specific, Measurable, Attainable, Rewarding, and Timed (SMART).  What goals do your spouse, children, or business partners wish to accomplish?  Now is also a good time to complete a Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis.
  • What other enterprises can you explore raising in addition to, or in place, of some of the crops you currently raise. How much do you need to make in a different enterprise?  Do you have any criteria or parameters to consider as you evaluate a new enterprise?  Brainstorm a list of potential new enterprises or direction for your farm.
  • What does the customer want/need that you could fulfill? Research trends, talk to others about ideas, meet with farmers who have successfully changed their business model.
  • Realize this process takes time and will require work on your part. Changes are not going to happen immediately, but never will if you do not spend time thinking, researching, and evaluating.

Summary

There is comfort in doing what you have always done because you have knowledge, experience, and history.  However, this may be a time to think outside your comfort zone to evaluate alternatives and your business plan.  Invest time and energy talking to your farm and non-farm friends, family members, and local Extension professional for advice and assistance with the process.

Resources

Conducting a SWOT Analysis of Your Agricultural Enterprise https://ohioline.osu.edu/factsheet/anr-42

Developing Goals for the Agricultural Business https://ohioline.osu.edu/factsheet/anr-45

Ohio State University Extension Farm Budgets https://farmoffice.osu.edu/farm-mgt-tools/farm-budgets#2020

USDA Agricultural Projections to 2029 https://www.ers.usda.gov/publications/pub-details/?pubid=95911

Farm Operations Plans in Case of Sudden Illness or Injury

Source: cropwatch.unl.edu

Farming operations are detailed, complex, and often only known by one person. In the event a key farm operator is unable to operate the farm, Nebraska Extension has developed a Crop Operations Plan to help guide someone new to the operation to adequately and successfully operate the farm for the next couple months. This guide is not designed to be a legal document, but it provides some guidance to an employee or neighbor who may not know all of the innerworkings of the farming operation.

The Crop Operations Plan includes key contacts for farming inputs or needs; a field plan for each crop field in production, including seed selection, fertilizer needs, and crop protection plan; and space for day-to-day activities, access to data management software, location of farm supplies, etc. It is important to initially identify two or three potential replacements who may have the knowledge or skills to operate the farm.

It is recommended farm operators complete this plan as soon as possible since no one knows if, or when, they may become ill or unable to perform farming operations. This guide is primarily for use over the next couple months, but it can be modified to include operations beyond that time frame. It can also be incorporated permanently into business plans. Nebraska Extension will also provide an extended operations plan in the near future.

Cow-Calf Operations Plan has also been developed for operations that include cows and calves.

The Crops Operations Plan and Cow-Calf Operations Plan are available in a Word document and can be downloaded by clicking the links above.

Latest COVID-19 legislation to provide more funds for farm businesses

Source: Peggy Hall, OSU Extension

Economic relief measures in the CARES Act have proven difficult for farms, first due to confusion over which and how farmers qualify and also by soaring demand and depleted funding.   But the recently enacted Paycheck Protection Program and Health Care Enhancement Act (HR 266) should help.  The legislation injects more funds into both the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans Program (EIDL) and clarifies that farmers can qualify for EIDL loans.  The bill also came with a bonus:  additional guidance from the USDA and SBA for farmers seeking to access the programs.  Both programs are first-come, first-served, so farm businesses who haven’t applied for the funds should decide whether to do so right away.

Here’s how the new legislation affects agricultural businesses:

  • Allocates another $310 billion for the PPP to provide payroll funding for eligible employers, which includes $60 billion in funding for smaller lending institutions working with PPP loan applicants.
  • Doubles the EIDL program, adding another $10 billion to the SBA disaster loan program for eligible businesses.
  • Clarifies that agricultural enterprises are eligible for EIDL loans.

Using the PPP:  a few quick tips

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Farm Office Live on Monday April 27

OSU Extension is pleased to be offering the third session of “Farm Office Live” session on Monday evening, April 27, 2020 from 8:00 to 9:30 p.m.  Farmers, educators, and ag industry professionals are invited to log-on for the latest updates on the issues impact our farm economy.

The session will begin with the Farm Office Team answering questions asked over the past week.  Topics to be highlighted include:

  • Update on the CARES Paycheck Protection Program
  • Economic Injury Disaster Loan (EIDL)
  • Coronavirus Food Assistance Program (CFAP) Update
  • Ethanol and biofuel update
  • ARC and PLC Forecasts
  • Other legal and economic issues

Plenty of time has been allotted for questions and answers from attendees. Each office session is limited to 500 people and if you miss the on-line office hours, the session recording can be accessed at farmoffice.osu.edu the following day.  Participants can pre-register or join in on Monday evening at  https://go.osu.edu/farmofficelive 

Managing stored grain into summer

Source:  Jason Hartschuh, Elizabeth Hawkins, OSU Extension

If you are storing more grain on farm this spring than usual, you are not alone. Over the last few weeks, we have heard from more producers who are considering holding grain longer into summer months than they normal would. We have also heard a few reports of spoiled grain as producers fill April contracts. Carrying graining into summer has been done for many years successfully but requires much more intensive management than winter grain storage.

Key advice for long term grain storage   

  1. If bins were not cored in early winter core bins now
  2. Verify the moisture content of stored grain is at or below recommended levels
  3. Monitor grain temperature every 3 or 4 weeks throughout storage paying special attention to insect activity and mold
  4. Monitor the roof area for signs of condensation
  5. Cover fans to keep the chimney effect from warming the grain
  6. Provide roof ventilation at two levels above the surface of the grain, one vent should be close to the peak of the bin
  7. Aerate bins on cool mornings every couple weeks as grain at the top of the bin becomes warm

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Ben Brown’s Weekly Market Outlook – 4/24/2020

Here is my market outlook on the likely outcome of large corn supplies in 2020. This is above a market and financial incentive to switch roughly 2 million corn acres to beans in the Eastern Corn-Belt. The full report can be found at [https://u.osu.edu/ohioagmanager/2020/04/24/examining-2020-corn-and-soybean-acreage/](https://u.osu.edu/ohioagmanager/2020/04/24/examining-2020-corn-and-soybean-acreage/)As always a big thank you to Rachel Leggett for her talented video production. Hope to see you around the State of Ohio soon! Go Bucks!

Posted by Ben Brown on Friday, April 24, 2020

USDA Announces Coronavirus Food Assistance Program (CFAP)

Source:  Ben Brown & David Marrison, OSU Extension

On April 17, the preliminary details about the Coronavirus Food Assistance Program (CFAP) were released by the U.S. Department of Agriculture (USDA) program aimed to assist farmers, ranchers, and consumers in response to the COVID-19 pandemic. The CFAP provides $19 billion in funds authorized through the Coronavirus Aid, Relief, and Economic Security Act (CARES).

The $19 billion program includes two major elements. The first element is for Direct Support to Farmers and Ranchers. This program will provide $16 billion in direct support to farmers based on actual losses where prices and market supply chains have been impacted by COVID-19. The program will also assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19.

It has been reported, although not confirmed by the USDA, that in the direct support program, $5.1 billion will be allocated to support cattle producers, $3.9 billion for row crop producers, $2.9 billion for dairy, $2.1 for specialty crops, $1.6 billion for hog producers and $500 million for other commodities.

The Chairman of the Senate Agricultural Appropriations sub-committee has indicated the direct assistance to producers will be one payment comprised of the sum of two parts. The first part is 85% of the losses incurred between January 1 and April 15, 2020 per commodity. The second part will be 30% of the loss in market prices due to COVID-19 between April and the next two quarters. Secretary Perdue has expressed that payments are intended to be made by end of May or early June. To qualify for a payment, a commodity must have declined in price by at least 5% between January and April 15, 2020. While there are several entities illustrating price declines including The Ohio State University, the price series USDA will use to determine eligibility is uncertain. Federal payment limits apply, set at $125,000 per commodity with an overall limit of $250,000 per individual or entity. USDA has indicated that CFAP may take into consideration other farm program benefits regarding payment limitations, which could limit CFAP payments in the case a producer is receiving payments in other federal safety net programs. The exact program limitations and qualifying support are unknown at the present time. The direct payment program will be administered by the Farm Service Agency.  More details will be forthcoming by the Farm Service Agency in the upcoming weeks. Access more information at: https://www.fsa.usda.gov/

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Ben Brown’s Weekly Market Outlook

Howdy folks- here is my market update for the week of April 17 on the potential for US soybean crush moving forward. Soybean crush has been the star of the show lately and the March report was eye popping, but it is hard to see soybean crush sustaining that pace. Although, I do think the 20 million bushel increase in the USDA April report is justified. Demand challenges moving forward- likely mean we won't see another crush report like what we saw in March for a while. The written report for the video can be found here- [https://u.osu.edu/ohioagmanager/](https://u.osu.edu/ohioagmanager/)Big thanks to Rachel Leggett and Rob Leeds for the video. Have a great week and hope to see you around the State of Ohio soon!

Posted by Ben Brown on Friday, April 17, 2020

Agriculture – Knox County’s #1 Industry

Agriculture’s Impact in Knox County

The U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service 2017 Census of Agriculture ranked Knox County 26th (out of 88) in total market value of agricultural products sold in the state of Ohio!  Nationally we ranked 859th out of 3077 counties!  The market value of agricultural products sold in the county was reported at $135,144,000.00

 

 

 

 

Top Commodities

  1. Corn – $27,612,000.
  2. Soybeans – $25,244,000.
  3. Hogs – $16,940,00.
  4. Milk – $12,246,000.
  5. Cattle – $6,985,000.
  6. Nursery & Greenhouse – $1,983,000.
  7. Sheep & Goats – $1,468,000.
  8. Wheat – $907,000.
  9. Fruit & Berries – $787,000.
  10. Vegtables – $364,000.

 

 

 

 

There are 2179 total producers in Knox County,  with 1,402 being male and 777 being female. 1,364 producers are between the age of 35-64, 586 are 65 and older, while 229 are under the age of 35.

Knox County has 1338 farms averaging 145 acres in size with total land in farms at 194,445 acres. 97% of the farms in Knox County are classified as family farms.  Cropland makes up 72% of the land in farms by use, followed by woodland at 12%, pastureland at 9%, and 6% classified as other. No-till farming was practiced on 25%, reduced tillage on 15%, intensive tillage on 10%, and cover crops were used on 12% of the farms in 2017.