Farmers often question the economic value GPS based technology.
Does precision agriculture pay? In most precision agriculture circles, this is the most often asked question, and at times a most difficult question to answer.

Today’s technology allows farmers to vary the application rates of crop inputs throughout a field. These practices are creating vast and sweeping changes on many farms. This technology allows such inputs as herbicide, insecticide, fertilizer, manure, etc. to be altered at any particular point within a field. GIS software allows various field data such as soil test results, crop scouting data and yield data to be analyzed and incorporated into the decision making process.

Theoretically, combining field based data with the ability to vary input usage at specific points within a field should increase input efficiency. Increased efficiency should improve profit margin and result in the adoption of more environmentally sound practices. – But does it pay?

To answer this question data was analyzed from a 45 acre Central Ohio farm. Seven years of accurate and calibrated yield data was available for this field utilizing a GPS based yield monitor. This field was in a strict corn-bean rotation. Fertilizer recommendations were developed utilizing the four following scenarios.

Scenario 1: Fertilizer recommendations were made according to the farmers normal production practices. Variable rate technology was not utilized in this scenario.

Scenario 2 : The field was divided into 2.5 acre grids. Soil samples were collected and sent to a lab for analysis. The fertilizer application data was developed for this field utilizing variable rate technology based upon the results from the soil test data.

Scenario 3 : The field was divided into management zones based upon soil type. Soil samples were then collected from each soil type. Each sample size was approximately 2.5 acres or less. The fertilizer application data was developed for this field utilizing variable rate technology based upon the results from the soil test data.

Scenario 4: GIS software was used to divide the field into management zones. These zones were based upon actual, historic crop removal data from this field. Fertilizer recommendations were based upon the actual crop removal in each of these management zones. Fertilizer applications were made utilizing variable rate technology.

Table 1 contains the data from this analysis. Fertilizer recommendations were made for each of the four scenarios using the Tri-State Fertilizer Recommendations as a guide. Overall fertilizer use was the highest using the farmers normal production practices (scenario 1). Utilizing grid soil sampling and variable rate applications (scenario 2) fertilizer use was reduced by 3,420 pounds. Soil sampling using management zones based upon soil type and utilizing variable rate fertilizer applications (scenario 3) reduced overall fertilizer use by more than 3.5 tons. Scenario 4 which utilized G.I.S. software to divide the field into management zones based upon crop removal and utilizing variable rate fertilizer applications produced the most efficient fertilizer use. This scenario, which is based on the actual field production, shows phosphorus recommendations were reduced by almost 1.5 tons and the potash recommendations were cut in half – But does it pay?

Fertilizer prices of $650/ton for Potash and $850/ton for D.A.P. were used for this analysis. Soil testing charges and variable rate fertilizer application charges were included where appropriate. Scenario 4, fertilizer recommendations based upon crop removal produced the greatest savings. This scenario which had the lowest fertilizer use and no soil testing charges resulted in a savings of $88.04 per acre when compared to the farmers normal production plans. Soil sampling by soil type (scenario 3) and 2.5 acre grid sampling (scenario 2) resulted in savings of $84.91 per acre and $36.36 per acre respectively, when compared to the normal production practices for this farm.

But does it pay? In this analysis Yes! Each scenario involving variable rate fertilizer applications resulted in lower fertilizer use and a greater net return. With today’s soaring fertilizer prices, savings of $36 to more than $88 per acre can have a significant impact on most Central Ohio farms.

Table 1.

Today’s farms are more susceptible to liability claims than ever before. This liability exposure comes in many different forms such as moving large machinery over roadways, inviting customers and vendors onto the business property, and environmental issues. While liability exposure cannot be eliminated, it can be managed.  Liability limiting entities, such as corporations and limited liability companies (LLCs) can be valuable tools in managing liability. This fact sheet will address the liability protection attributes of these entities and how to design a comprehensive business plan for liability protection.

Click here to read this new OSU Extension Fact Sheet.

This article summarizes farm management articles and newsletters from various sources. Below are articles and newsletters that provide focus on farm business planning, financial management, and farm management strategies besides the Ohio Ag Manager Newsletter. We are pleased to work in conjunction with these other newsletters to provide farm management education across the nation.

Ag Decision Maker ( http://www.extension.iastate.edu/agdm/ ) is a publication of Iowa State University . The February 2008 newsletter has a number of excellent articles. I encourage you to read the article Global warming – the science ( http://www.extension.iastate.edu/agdm/homepage.html ) by Eugene Takle and Don Hofstrand. This article is a series of articles that focuses on global warming, the science behind it and the impact global warming may have on Midwestern agriculture. Very good read.

Iowa Ag Review ( http://www.card.iastate.edu/iowa_ag_review/winter_08/ ) is a quarterly publication by the Center for Agricultural and Rural Development. Miguel Carriquiry and Bruce A. Babcock have an interesting article on biodiesel. I want you to read the article, but I’ll let the cat out of the bag as a teaser. The authors contend that the real winners in the biodiesel craze are indeed farmers and landowners and not biodiesel manufacturers.

Purdue Agricultural Economics Report

( http://www.agecon.purdue.edu/extension/pubs/paer/2008/february/patrick.asp ) has a very robust article on Evaluating Livestock Risk Protection for Hogs written by George Patrick, Metin Cakir, and Tim Baker. The authors provide a description of the Livestock Risk Protection Swine policy and coverage.

The farm gate ( http://www.farmgate.uiuc.edu/ ) is one of my personal favorites. It is not a rigid ‘e-newsletter’; rather, it is a free-flowing blog full of very topical issues. Authored by Stu Ellis, formerly with University of Illinois Extension , the blog is designed for cornbelt farmers and agribusinesses. The tag line is “Where Farm Decision-Makers Start Their Day.” You may want to start your day at the farm gate .

Ohio farmers have a number of options when determining how to structure their farm businesses. The most common business entities are sole proprietorships, C-Corporations, S-Corporations, Partnerships, and Limited Liability Companies (LLCs). One of the primary factors to consider when determining which business structure to use is tax structure. The purpose of this publication is to provide a brief overview of the tax characteristics of the aforementioned business entities. The reader is encouraged to get professional tax advice before making a final determination on the tax structure that is best for their business.

Click here to access this new OSU Extenion Fact Sheet

Introduction

Landowners, prospective buyers, farmers and lenders often seek baseline data and trend data with which to base their buy/sell and rental decisions upon. A survey is conducted annually drawing on the expertise of numerous professionals that are knowledgeable of Ohio ‘s cropland markets. Surveyed groups include farm managers, rural appraisers, agricultural lenders, OSU Extension Educators, farmers and Farm Service Agency personnel.

Surveying these agricultural professionals is an attempt to capture unbiased data for evaluating cropland value and cash rents. One hundred twenty-nine surveys were completed, analyzed and summarized. Respondents were asked to give responses based on 3 classes of land in their area; “Top” producing land, “average” producing land and “poor” producing land. The survey results are summarized in Tables 1 and 2.

This survey found that in 2007, Ohio cropland averaged $4456.56 per acre for top land, $3703.60 for average land and $2933.61 for poor land. Top land averages 183.92 bushels of corn per acre, 59.98 bushels of soybeans per acre and rented for $141.37 per acre. Average land yields on average 149.82 bushels of corn per acre, 47.46 bushels of soybeans per acre and rented for $111.47 per acre. Poor cropland averages 117.91 bushels of corn per acre, 35.35 bushels of soybeans per acre and rents for $85.45 per acre.

Respondents were also asked to give their projections of land values and cash rents for 2008. For 2008 land values in Ohio are projected to average $4685.20, $3921.58 and $3123.49 per acre for “Top”, “Average”, and “Poor” land, respectively.

Ohio Results

Top Cropland

Survey results indicate that “top” performing cropland in Ohio averages 183.92 bushels of corn per acre. Results also show that average value of “top” cropland in 2007 was $4456.56 per acre. According to this survey “top” producing cropland in Ohio is expected to be valued at $4685.20 in 2008. This is a projected increase of 5.13%.

“Top” crop land in Ohio rented for an average of $141.37 per acre in 2007 according to survey results. “Top” cropland is expected to rent for $156.88 in 2008. This equates to a cash rent of $0.85 per bushel of corn produced. Rents in the “top” cropland category are expected to equal 3.35% of land value in 2008.

Average Cropland

Survey results for “average” production cropland show an average yield to be 149.82 bushels of corn per acre. Results show that the value of “average” cropland in Ohio was $3703.60 per acre in 2007. According to survey data this “average” producing cropland is expected to be valued at $3921.58 per acre in 2008. This is a projected increase of 5.89%.

“Average” cropland rented for an average of $111.47 per acre in 2007 according to survey results. “Average” cropland is expected to rent for $123.50 per acre in 2008. This equates to a cash rent of $0.82 per bushel of corn produced. Rents in the “average” cropland category are expected to equal 3.04% of land value in 2008.

Poor Cropland

The survey summary shows the average yield for “poor” performing cropland equals 117.91 bushels of corn per acre. Results also show that the average value of “poor” cropland was $2933.61 per acre in 2007. According to survey data this “poor” producing cropland is expected to be valued at $3123.49 in 2008. This is an increase of 6.47%.

“Poor” cropland rented for an average of $85.45 per acre in 2007 according to survey results. Cash Rent for “Poor” cropland is expected to average $94.82 per acre in 2008. This equates to a cash rent of $0.80 per bushel of corn produced. Rents in the “poor” cropland category equal 2.91% of land value.

Northwest Ohio Results

Top Cropland

Survey results indicate that “top” performing cropland in northwest Ohio averages 182.22 bushels of corn per acre or 60.0 bushels of soybeans per acre. Results also show that the average value of “top” cropland was $4040.57 per acre in 2007. According to this survey “top” producing cropland in northwest Ohio is expected to be valued at $4250.94 in 2008. This is a projected increase of 5.21%.

“Top” crop land in northwest Ohio rented for an average of $141.02 per acre in 2007 and is expected to rent for $156.17 in 2008 according to survey results which equals $0.86 per bushel of corn produced. Rents in the “top” cropland category are expected to equal 3.67% of land value.

Average Cropland

Yields for “average” production cropland are 149.09 bushels of corn per acre or 47.55 bushels of soybeans per acre. Results show that the value of “average” cropland in northwest Ohio was $3417.59 per acre in 2007. According to survey data this “average” producing cropland is expected to be valued at $3637.04 per acre in 2008. This is a projected increase of 6.42%.

“Average” cropland rented for an average of $111.39 per acre in 2007 according to survey results and is expected to rent for $125.69 in 2008 which equals $0.84 per bushel of corn produced. Rents in the “average” cropland category are expected to equal 3.46 % of land value in 2008.

Poor Cropland

The survey summary shows the average yield for “poor” performing cropland in northwestern Ohio equals 117.82 bushels of corn per acre or 35.33 bushels of soybeans per acre. Results also show that the average value of “poor” cropland was $2761.32 per acre in 2007 and is expected to average $2946.70 per acre in 2008. This is an increase of 6.71%.

“Poor” cropland rented for an average of $86.76 per acre in 2007 and is expected to average $97.50 per acre in 2008 according to survey results which equals $0.83 per bushel of corn produced. Rents in the “poor” cropland category are expected to equal 3.31% of land value in 2008.

The northwest region for the purposes of this survey includes: Williams, Fulton , Lucas, Ottawa , Defiance , Henry, Wood, Sandusky , Paulding, Putnam, Hancock, Seneca, Van Wert, Allen, Hardin, Wyandot, Crawford, Marion and Morrow Counties .

Southwest Ohio Results

Top Cropland

Survey results indicate that “top” performing cropland in southwest Ohio averages 185.51 bushels of corn per acre or 60.35 bushels of soybeans per acre. Results also show that average value of “top” cropland was $4961.54 per acre in 2007. According to this survey “top” producing cropland in southwest Ohio is expected to be valued at $5213.65 in 2008. This is a projected increase of 5.08%.

“Top” crop land in southwest Ohio rented for an average of $156.44 per acre in 2007 and is expected to rent for $174.92 per acre in 2008 according to survey results which equals $0.94 per bushel of corn produced. Rents in the “top” cropland category are expected to equal 3.36% of land value in 2008.

Average Cropland

Yields for “average” production cropland equal 152.81 bushels of corn per acre. Results show that the value of “average” cropland in southwest Ohio was $4092.16 per acre. According to survey data this “average” producing cropland is expected to be valued at $4297.22 per acre in 2008. This is a projected increase of 5.01%.

“Average” cropland rented for an average of $126.41 per acre in 2007 and is expected to rent for $137.55 per acre in 2008 according to survey results which equals $0.90 per bushel of corn produced. Rents in the “average” cropland category are expected to equal 3.20 % of land value in 2008.

Poor Cropland

The survey summary shows the average yield for “poor” performing cropland in southwestern Ohio equals 122.56 bushels of corn per acre. Results also show that the average value of “poor” cropland was $3157.61 per acre. According to survey data this “poor” producing cropland is expected to be valued at $3350.65 per acre in 2008. This is an increase of 5.01%.

“Poor” cropland rented for an average of $97.77 per acre in 2007 and is expected to average $106.30 per acre in 2008 according to survey results which equals $0.87 per bushel of corn produced. Rents in the “poor” cropland category are expected to equal 3.17% of land value in 2008.

The southwest region for the purposes of this survey includes: Mercer, Auglaize, Shelby , Logan , Union , Delaware , Darke, Miami , Champaign , Clark, Madison , Franklin , Preble, Montgomery , Greene, Butler , Warren , Hamilton , Clermont, Clinton , Fayette and Pickaway Counties .

Summary

This study will add to existing research on Ohio farmland values and cash rents that can assist producers and landowners with purchase and rental decisions. Existing research includes:

Ohio Cropland Values and Cash Rents 2006-07 at:

http://ohioline.osu.edu/ae-fact/pdf/cropland.pdf

Ohio Farm Real Estate Markets at:

http://aede.osu.edu/resources/docs/pdf/C2V16S20-H8CG-UEFY-JGL2H3JPU7Y1PO5J.pdf

Land Rental Rates: Survey Results and Summary at: http://vanwert.osu.edu/ag/landrentalrates.pdf and companion Cash Rent Calculator at:

http://vanwert.osu.edu/ag/calculator.htm

Also, check with your local OSU Extension Office for local land value/rental survey summaries. For additional information on farmland lease issues see the Department of Agricultural, Environmental and Development Economics (AEDE) Farm Management webpage at: http://aede.osu.edu/Programs/FarmManagement/MgtPublications.htm

How many farmers would allow someone to come onto the farm, select and load the best cattle with a verbal promise from the buyer to pay ½ of whatever they were sold for at the market? Sounds ridiculous doesn’t it? Why should selling timber be any different? Selling timber can be one of the most important financial decisions that you make in your lifetime, and an improper timber sale can cause long-term environmental damage, which greatly reduces your forest’s potential to provide future benefits.

With proper planning and assistance: “you can have your cake and eat it too.” It is possible to get significantly more income from your timber sale while keeping the potential of your forest to produce future benefits in place. Call Before You Cut, a program sponsored by several of Ohio ‘s government and non-profit organizations and agencies, is the place to go to get the information that you need to make informed decisions about the management and harvesting of your forest resources. So if you are planning to sell some of your timber, be sure to call (1-877-424-8288) or click ( http://callb4ucut.com ) before you cut.

TOP 10 Reasons to Call Before You Cut

10) Learn if harvesting is right for you & your woods

9) Harvest the proper trees

8) Receive expert advice from a professional forester

7) Save $$$ on taxes

6) Find the best logger for the job

5) Develop a harvest contract to protect you & your forest

4) Assure a healthy & diverse forest for the future

3) Protect your soil & water resources,

and learn about Ohio ‘s resource protection laws

2) Maximize profit from your timber harvest

1) Ensure your overall satisfaction with the harvest!

Call Before You Cut is sponsored by ODNR-Division of Forestry, Ohio State University Extension, Rural Action Sustainable Forestry, ODNR-Division of Soil and Water, Ohio Federation of Soil and Water Conservation Districts, Ohio Society of American Foresters, The Nature Conservancy, Ohio Better Business Bureau and Ohio Tree Farm Committee.