New Eastern Corn Belt Weekly Returns Series for Cattle Finishing

In these times of changing feed prices, it has never been as important to thoroughly understand how profitable it is to feed cattle.  However, many of the existing series that you find on the web from USDA or extension sources base their cost and return estimates on monthly data and on prices observed in more western locales.  Weekly data is preferred to monthly data because it gives you a better feel for how volatile returns can be on a group-by-group basis.  And, of course, for those operating in the Eastern Corn Belt , we would prefer to base decisions on local prices.

This month I’ll discuss a new weekly series I’ve calculated and posted on my web page ( ).  The series reflects the average returns to cattle finishing for two different types of finishers.  These series borrow from recent work by John Lawrence at Iowa State that use updated budgets for rates of gain, time on feed and updated labor costs.  The data reflects feed, fat cattle and feeder pig prices that are reported in the Eastern Corn Belt .

The first series is calculated for finishing 550-pound feeder steers.  The feeder steers are priced using the USDA’s weekly price series for Kentucky auction markets, which reports prices for cattle in 50-pound weight intervals.  I use the average of the midpoint of the price ranges for the 500-550# and the 550-600# feeder steers.  I assume these calves face a 2% death loss during their 30 weeks on feed and that they consume 61 bushels of corn, 116 pounds of 48% soybean meal and 0.65 tons of hay.  All other costs, including other ration components, vet charges, labor, utilities, facilities, etc. are assumed to cost $121.50.  I assume these cattle finish at 1150 pounds with 60% grading Choice 2-3 and the remainder grading Select or low Choice.  I use the Eastern Pennsylvania auction prices reported out of Lancaster , PA.   I use prices for Toledo corn, central Illinois 48% soybean meal and central Illinois hay (grass hay grading good).

The second series focuses on finishing 750-pound yearling steers to 1250 pounds (65% Choice 2-3 and 35% Select or low Choice).  I assume these cattle face a 1% death loss during their 22 weeks on feed and that they consume 63 bushels of corn, 110 pounds of bean meal and 0.35 tons of hay.  All other items are assumed to cost $73.  Many of these production and cost assumptions are based on recent Iowa State steer budgets.  Of course, every producer may face slightly different feed efficiencies, death loss and other costs.  Therefore, I’ve set up the spreadsheet so you can alter one or more of the components for either of these series; this, in turn, changes the entire series of data generated and the resulting summary statistics.

The spreadsheet contains data for feeder steers placed beginning the first week of 2002 through the end of April of 2007.  The summary statistics reveal several interesting trends.  The seasonal profit pattern for calf finishers show that finishing these cattle during the winter months – December through March – resulted in negative returns during the 2002-2006 time period under the prevailing assumptions.  All other months yielded similar, mildly positive returns.

In contract, for those finishing yearlings, these winter months were among the strongest in terms of returns.  Indeed, for yearling finishers, only July and August averaged negative returns over these years while every month from October through April represented strong returns.

The spreadsheet also allows a user to input projected weekly prices for feeder steers, fat cattle and feed stuffs over the next several years on the ‘weekly data’ sheet.  This allows a user to generate updated, customized returns series for planning purposes.

Andersons Program in International Trade

Ohio State University Department of Agricultural, Environmental and Development Economics

The Andersons Program in International Trade is a broad-based program focusing on research and outreach in the area of international trade and public policy.  Recent research from the program has focused on:  vertical market structure and the impact of trade liberalization on developing country market access; government labeling policies and credence goods; and the relationship between trade and environmental policy.  Currently, research is being conducted on trade liberalization in the presence of tariff escalation; the impact of harmonization of labeling regimes for credence goods; and also the potential the impact of R&D on market structure in the life sciences sector.  Recent outreach work from the program has covered topics such as: international trade and ethanol; prospects for the Doha Round of the World Trade Organization; regionalism vs. multilateralism in trade liberalization; the connection between trade and the environment; and the US trade deficit.

To access the Andersons Program in International Trade webpage go to:

Employing Minors in the Green Industry

With the school year coming to a close many students will be looking for part or full-time summer employment. In some cases students will be employed in landscaping, lawn mowing, vegetable harvesting, sod farms, or other related businesses. As an employer it is your responsibility to understand the laws and regulations pertaining to the employment of minors. The Ohio Revised Code, Fair Labor Standards Act, and the Secretary of Labor all have rules and regulations in place for the protection of minors. The next few paragraphs will provide you with an overview of the regulations and references for additional information.

Who is Covered?

The employment of minors under age 16 is subject to federal requirements set by the Fair Labor Standards Act and the agriculture requirements are less than for many other industries. In 1967, the U.S. Secretary of Labor determined that certain jobs in agriculture are hazardous to children less than 16 years of age. However, like many other federal regulations, there are exemptions. These include the employment of children less than 16 years of age when employed on farms owned or operated by their parents or guardians and those who have completed an approved tractor and machinery certification course.

In addition to federal hazardous occupation regulations, there are also state regulations. For most Ohio laws, a person under the age of 18 is considered a minor and the Ohio Revised Code prohibits minors from working in certain hazardous jobs related to agriculture. The Ohio list of hazardous occupations is the same as the federal list, but the Ohio code sections and related regulations say the Ohio hazardous occupation list applies to those under 16 years of age .

Hazardous Occupations

The U.S. Secretary of Labor has declared several jobs as hazardous to minors less than 16 years of age. Because of space limitations, not all of the prohibited occupations are listed here. However, those most applicable to those involved in the types of businesses described earlier are listed below:

•  Operating a tractor of more than 20 PTO horsepower, or connecting or disconnecting implements from such a tractor.

•  Operating a fork lift, earth moving equipment, or power-driven circular, band or chain saw.

•  Working on a ladder at a height of more than 20 feet.

•  Handling or applying pesticides with the words or symbols “Danger”, “Poison”, “Skull and Crossbones”, or “Warning” on the label.

When Can Minors Work?

Under the federal regulations, minors under 16 years of age may not be employed during school hours unless employed by their parent or guardian. Unless provided a special exemption, minors are subject to the following restrictions:

• No person under 16 years of age is to be employed:

• During school hours

• Before 7:00am or after 9:00pm from June 1 to September 1 or during any school holiday of five school days or more duration, or after 7:00pm at any other time.

• For more than three hours a day in any school day.

• For more than 18 hours in any week while school is in session.

• For more than eight hours in any day which is not a school day.

• For more than 40 hours in any week that school is not is session.

• No person under 16 years of age is to be employed more than 40 hours in any one week nor during school hours unless the employment is incidental to a state approved program.

• No minor is to be employed more than five consecutive hours without allowing the minor a rest period of at least thirty minutes.

What Records Should I Keep?

The Federal Regulations require employers of minors under 16 years of age to maintain and preserve records with the following information about each minor employee:

• Name in full.

• Place where the minor lives while employed.

• Date of birth.

• Proof of needed parental or guardian signatures.

Keep in mind that minors employed by a parent or guardian are exempt from these record keeping requirements.

The Ohio Revised Code exempts agricultural employers from record keeping provisions related to minors. However, the Ohio Revised Code requires an agreement as to wages for work to be performed be made between the employer and a minor before employment begins. For the protection of the employer, this agreement should be in writing and signed by both parties.

The state agency responsible for enforcement of the Ohio Code as it relates to prohibited jobs for minors is the Division of Minimum Wage, Prevailing Wage and Minors, Department of Industrial Relations. You may contact them at 614-644-2239. The U.S. Department of Labor web site ( ) also contains information of interest to employers.

If you are interested in safety training information for your employees, you may want to access the Agricultural Tailgate Training Safety fact sheets developed by Ohio State University Extension’s Food, Agricultural, and Biological Engineering Department. More than 80 topics are available, including tractor operation, using skid loaders, chain saw safety, and heat stress. These fact sheets are available at or by contacting your local office of Ohio State University Extension.

Hopefully this information will help you fulfill your responsibility as an employer to understand and follow the rules to keep your business a safe place to work. If you have specific questions related to minor labor laws and regulations, please contact the Ohio Department of Industrial Relations.

(This article was written from materials contained in Ohio State University Extension Bulletin 833, Ohio Farm Labor Handbook, written by Dr. Bernie Erven and Russell Coltman, The Ohio State University. Copies of the Ohio Farm Labor Handbook are available for purchase through your local county office of Ohio State University Extension).

Economic Based Nitrogen Rate Calculator Spreadsheet-2007

Nitrogen (N) is typically one of the largest corn fertilization expenses. Nitrogen application is critical because it significantly improves corn yield in many crop rotations. When choosing N rates, producers need to carefully consider both achieving most profitable economic return and advancing environmental stewardship. In 2004, university agronomists from the Corn Belt states began discussions regarding N rate use for corn production. The reasons for the discussions centered on apparent differences in methods for determining N rates across states, misperceptions regarding N rate guidelines, and concerns about application rates as corn yields have climbed to historic levels. An outcome of those discussions was an effort with the objectives to:
develop N rate guidelines that could be applicable on a regional basis and identify the most profitable fertilizer N rates for corn production across the Corn Belt .

This led to the creation of the new Economic Based Nitrogen Rate Calculator for Ohio. The new Economic Based Nitrogen Rate Calculator provides the user more flexibility in rate decisions by providing a range of rates. Inputs required in this Calculator are the cost of nitrogen and the price of corn. Although the range in rates provided by the model is economic, agronomic considerations are also provided for each rate. Nitrogen credits for previous crop are considered in the model, so you do not have to deduct the credit. Manure credits do have to be taken, so if you apply manure in your operation make certain to credit the nitrogen supplied by the manure.

The Economic Based Nitrogen Rate Calculator is available as a downloadable Excel Spreadsheet file at:

Economic Nitrogen Recommendation Spreadsheet-2007!

The Users Guide for the Economic Based Nitrogen Rate Calculator is available online at:

For a complete explanation of the new approach to nitrogen recommendations please access the bulletin “Concepts and Rationale for Regional Nitrogen Rate Guidelines for Corn” at:

Portions of this article are taken from “Concepts and Rationale for Regional Nitrogen Rate Guidelines for Corn”.

The 2006 WTO Ruling on GM Crops: What Impact on the Regulatory Environment?

Ohio State University Department of Agricultural, Environmental and Development Economics

In 2006, the World Trade Organization (WTO) ruled on a complaint by the United States concerning the failure of the European Union (EU) to lift its moratorium on the approval of genetically modified GM crops (WTO, 2006). Set in the context of the US-EU dispute over trade in GM crops, and their differing approaches to biotechnology regulation, this bulletin provides a review and assessment of the WTO’s ruling:

Capital Gains and Corporate Dividend Taxation

Capital gain and dividend tax rates were lowered in the 2001 Tax Act and had been extended two more years through December 31, 2010.   The rates are 0%, 5%, and 15%, but in 2008 would have gone back up to 20%.  The capital gain rates are now are at a maximum of 15%, however if the taxpayer is in an ordinary income tax bracket of 10 or 15 %, the rates on capital gain is only 5% in 2007 and zero for 2008-2010.   In essence, this extension of favorable rates matches the remaining tax legislation time-lines and changes from the 2001 Act, that for the most part “sunsets” in 2011, and reverts back to previous tax law.

Dividends are taxed at ordinary income tax rates, however qualified dividend income was included for the same, favorable capital gain rates, with this legislation, until 31 December 2010.  In other words, a maximum of 15% on qualified dividends, for some taxpayers only 5% in 2007 and zero in years 2008-2010.  This could be important for Corporations, accumulating profits and not paying out enough dividends.  There is a penalty tax, equal to 15% (Accumulated Earnings Tax), on Corporations that accumulates earnings and profits to avoid income tax to its shareholders.  This tax is in addition to the regular corporate tax.  Now, through 2010 would be a good time to consider paying out higher dividend payments to corporate shareholders while this tax is so much lower.

Milk Prices Moving Up

After a long 2006, the forecast for milk prices received by Ohio dairy farmers are projected to make a steady climb during the remainder of 2007 and into the early portion of 2008. Ohio dairy farmers interested in viewing milk price forecasts can access the following links.

Ohio Dairy Web 2007

National Program for Integrated Dairy Risk Management

Penn State Dairy Outlook Web Site

University of Minnesota Dairy Milk Marketing

Chicago Mercantile Exchange Daily Dairy Report

Farm Policy Papers – Farm Bill Summaries and Proposals

With discussion underway on the next Farm Bill and proposed changes to farm policy, it is important that we have an understanding of the issues and proposals on the table. The following newly authored papers and summaries are intended to cover the important points in this discussion. Click on link to read each.

Overview: 2006 Farm Program, 2006 Average Price, 2005 Total Cost of Production: Corn, Soybean, Wheat , U.S.

Selected Key Policy Questions For 2007 Farm Bill:

Commodity Programs, Conservation, Trade, and Energy

Comparison of Revenue Proposals

Proposed Changes In Existing Farm Support Rates, Major Farm Program Crops

National Farmers Union’s Counter-Cyclical Cost of Production Proposal

American Farm Bureau’s Standing Catastrophic Assistance Proposal

Agricultural Employers Not Exempt from "New Hire" Law

One trend emerging in agriculture is that more farms are using hired labor to accomplish their goals. Farm labor laws, while retaining some exceptions, are becoming more reflective of non-farm laws and regulations. Because of this, many of our Ohio farm managers may be unaware of regulations that are applicable to their business.

One law that farmers and agribusinesses may be unaware of is the “Personal Responsibility and Work Opportunity Reconciliation Act” of 1996 (a.k.a. New Hire Law). This law requires all employers to report newly hired employees to a state directory within twenty days of their hire date (this includes all agricultural employers). This new hire information is utilized to speed up the child support income withholding process, expedites collection of child support from parents switching jobs frequently and helps to locate non-custodial parents to enforce child support orders. New hire reporting also helps children receive the support they deserve and helps prevent fraudulent unemployment payments, workers compensation, or welfare benefit payments.

Employers are required to submit the employee’s full name, address, social security number, date of birth, and date of hire. The Ohio New Hire Reporting center offers employers a variety of ways to report new hires including submitting electronically or by mailing or faxing. Producers can receive the reporting form or can complete entries electronically by linking to the following web page:

New hires reporting legislation requires all “employees” to be reported. Any individual who is an employee for purposes of federal income tax withholding should be reported. This includes seasonal workers even if they are hired for a short period of time to help bale hay, relief milk on a dairy farm or harvest fruit crops.

Questions can be directed to the Ohio New Hire Reporting Center at (614) 221-5330 or (888) 872-1490. Frequently asked questions can also be viewed at the Ohio New Hire website located at