Producer and Land Owner Options with Farm Services Agency Closures

By: Chris Bruynis, Assistant Professor & Extension Educator

The decision to approve the consolidation of 125 FSA offices nationwide under the authority provided in the 2008 Farm Bill was announced on May 29, 2012. These office closures were influenced by the following criteria used by USDA:

  1.  USDA followed Congressional direction under the 2008 Farm Bill to propose first for consolidation, to the maximum extent practicable, all offices which are located less than 20 miles from another office, and which employ 2 or fewer permanent full-time employees.
  2. USDA identified all FSA offices that currently have zero permanent employees – regardless of location.

The decision to finalize a consolidation plan followed a thorough process, also guided by provisions in the 2008 Farm Bill.  Public meetings were held in every county affected by the proposal; the Department formally notified Congress of the proposal on February 27, 2012; and finally, the Department carefully reviewed public comments and data used to create the proposal during a 90-day Congressional notification period.  During this review, USDA determined that six of the original 131 proposed offices did not meet the 2008 Farm Bill criteria for office consolidations. As a result, they are not included in the closure plan announced by USDA. The list detailing the consolidation plan is attached.

Steven Maurer, the Ohio Farm Service Agency State Executive Director, provided the following proposal of consolidation for the clientele of the five offices within USDA’s Ohio FSA that are closing. 

  • Carroll County will be consolidated with the Tuscarawas County FSA office and located in New Philadelphia, Ohio. 
  • Clark County will be consolidated with the Madison County FSA office and located in London, Ohio. 
  • Meigs County will be consolidated with the Gallia/Lawrence County FSA office and located in Gallipolis, Ohio. 
  • Montgomery County will be consolidated with the Preble County FSA office and located in Eaton, Ohio. 
  • Perry County will be consolidated with the Fairfield County FSA office and located in Lancaster, Ohio. 

Even though there is a plan on where the FSA office workload will be moved for the affected counties, farmers still have an option to choose the office most convenient for them. When farms are transferred to an administrative county due to County Office closure, producers have the ability to request a new administrative County Office based on convenience of the producer. There are a set of guidelines that need to be followed and approval is dependent on either the county committee or the state committee depending on the request. Producers on farms affected by County Office closures have 30 calendar days from the date of the letter they receive notifying them of the closure to select a new administrative County Office. If you are interested in learning more about selecting a new administrative County Office, contact your current or future FSA office for details.

2012 Ohio Swine Enterprise Budgets

By: Barry Ward, Leader, Production Business Management, Ohio State University Extension Department of Agricultural, Environmental, and Development Economics

Newly updated OSU Extension Swine Enterprise Budgets for 2012 have been completed and posted to the Farm Management Website of the Department of Agricultural, Environmental and Development Economics. Updated Enterprise Budgets can be viewed and downloaded from the following website: http://aede.osu.edu/programs/farmmanagement/budgets

Updated Swine Enterprise Budgets include:
Farrow to Wean – Sow Producing 1 Litter
Wean to Finish – 1 Hog

These enterprise budgets are constructed differently from our other enterprise budgets. They include variable costs only in the budget analysis and offer the user the ability to calculate “Returns Above Variable Costs” and “Returns Above Feed Costs”.

Our enterprise budgets are compiled on downloadable Excel Spreadsheets that contain macros for ease of use. Users can input their own production and price levels to calculate their own numbers. Detailed footnotes are included to help explain methodologies used to obtain the budget numbers.

Authors of these swine budgets include: Dale Ricker, Extension Swine Specialist, OSU Extension; Barry Ward, Leader, Production Business Management, OSU Extension and OSU Department of Agricultural, Environmental and Development Economics ; and Seth Wilkerson, Undergraduate Student, Agribusiness and Applied Economics, OSU Department of Agricultural, Environmental and Development Economics.

Should You Consider Growing Wheat?

By: Chris Zoller, Extension Educator (ANR in Tuscarawas County); Brian Roe, AEDE Extension Specialist; & Bruce Clevenger, Extension Educator (ANR, Defiance County)

Wheat straw is in high demand across all of Ohio for a variety of reasons, including fewer acres devoted to wheat production, its use in reclamation of gas and oil well drilling sites, and fields being planted to soybeans following wheat harvest without the straw being baled. Reports of higher than normal prices per bale are found across the state. The Farmerstown, Ohio, Auction on May 15 reported large square bales of straw selling for $165 per ton and small square bales bringing $180 per ton, while per-ton prices over the past two months have averaged $167 in central Pennsylvania and $140 in central Illinois. Further analysis of the central Pennsylvania auction prices reveals that these strong prices for straw have persisted for the past two years and are significantly higher than 2010 prices.

Obviously, supply and demand will continue to drive the price of straw, and prices per bale will probably decline at some point, but there may be an opportunity for farmers to plant more acres to wheat to meet the demand. If you have wheat this year and had not planned to bale the straw, this may be the year to do so. It’s important to do some homework before jumping into this venture and we encourage farmers to evaluate the pros and cons of growing wheat, baling the straw, and completing an assessment of the potential market for baled straw.

Production:
Wheat works very well into a rotation of corn and soybeans with a three-year rotation of corn, soybeans, and wheat viewed as the ideal combination. This rotation allows for an Integrated Pest Management (IPM) approach to production agriculture by helping to reduce pest problems.

Wheat can be grown on a variety of soil types, but fields that are well drained are best. This may require tiling of some fields to reduce the potential for diseases that harm the crop.

Planting date is critical. Wheat should never be planted before the fly-safe date because of the potential for damage by disease and Hessian fly. Depending upon your location the fly-safe date ranges from late September to early October. A map of the fly-safe date for each Ohio county is available in the Ohio Agronomy Guide.

Like any other crop, the soil has to be able to supply adequate nutrients to maximize yield potential. Consider that the Bray P1 critical soil test level for phosphorus is higher for wheat (25ppm/50lbs/acre) compared to corn and soybeans (15ppm/30lbs/acre) but the same for alfalfa (25ppm/50lbs/acre). Fertilizer recommendations are provided in the Tri-State Fertilizer Recommendations for Corn, Soybeans, Wheat, and Alfalfa available from your local Extension office.

Economics:
Barry Ward, OSU Extension Farm Management Specialist, has prepared crop budgets that allow growers to input values to reflect changes in production and expenses. These budgets are available at: http://aede.osu.edu/programs/farmmanagement/budgets.

The 2012 wheat budget divides the receipts from the grain and straw separately to allow growers the opportunity to evaluate the economics of both. The straw-only budget reflects receipts at $100 per ton, with total variable and fixed costs of almost $55.00 per acre, resulting in a return above total costs of just over $43.00 per acre.

What is the value of the nutrients being removed when straw is baled? This is an important question to ask when deciding whether to leave the straw in the field or bale it for sale at a later time. In mid-May, Potash (0-0-60) cost $645 per ton and DAP (18-46-0) was priced at $672 per ton. A good wheat crop will yield between 1.0 and 1.2 tons of straw per acre on a dry matter basis. A ton of wheat straw contains between 9 and 14 pounds of nitrogen, 3 to 5 pounds of P2O5, and 15 to 35 pounds of K2O.

The straw harvesting equipment determines whether the straw will be in small square bales, big square bales, or large round bales. This may affect the cost of straw harvest, handling, storage and transport. Furthermore, there exist significant price differences by the type of bale. In recent trading in central Illinois, small square bales brought $130 – $150 per ton, big square bales brought $110 – $125 per ton while large round bales brought $70 – $90 per ton. Careful consideration should be given to your cost differences for producing different types of bales and prevailing price differences by bale type. USDA reports straw prices as part of many of its reports on hay markets and can provide a basis for choosing the method of straw harvesting for those who have flexibility on bale type production.

Reviewed by: Greg Labarge, OSU Extension Agronomy Field Specialist

U.S. Senate Ag Committee Version of New Farm Bill

By: Carl Zulauf, Department Agricultural, Environmental, and Development Economics, The Ohio State University

On April 26, 2012; the U.S. Senate Committee on Agriculture, Nutrition, and Forestry reported the Agriculture Reform, Food, and Jobs Act of 2012 (2012 Farm Bill) to the full Senate for its consideration. This article summarizes provisions that concern the safety net for U.S. crops: The provisions are in Title I, Commodity Programs; Title XI, Crop Insurance; and Title XII, Miscellaneous. Read the full article at http://www.farmdocdaily.illinois.edu/2012/05/us_senate_ag_committee_version.html.

Ask the Expert Widget now on Ohio Ag Manager Website.

Farm managers and landowners now have an opportunity to ask a question to one of the farm management experts that serve on the Ohio Ag Manager Team!  All that is required is to click on the Ask the Expert sign on the top left side of the Ohio Ag Manager Homepage. Type in your question and enter your email address so we can respond to your question. We look forward to serving your farm management educational needs!

Tax Credit Available for Hiring Veterans

Issued by Gary Hoff and Carolyn J. Schimpler

Re-printed with permission from FarmDocDaily

Farmers who plan to add additional help this year may want to consider hiring veterans. There is a substantial increase in the job pool as these individuals come back into the civilian workforce. As a further incentive, you may be eligible for a generous tax credit for hiring unemployed veterans. The credit can apply to seasonal employees if they work at least 120 hours.

Recent legislation has expanded the Work Opportunity Tax Credit (WOTC) to include qualified veterans who begin work after November 21, 2011, and before January 1, 2013. To qualify for the WOTC, the veteran must have been unemployed for at least four weeks in the year prior to being hired. A qualified veteran is a veteran who falls into one of the following categories.

• Unemployed for at least six months in the 1-year period ending on the hiring date

• A member of a family receiving assistance under the Supplemental Nutrition Assistance Program (food stamps) for at least three months during the 15-month period ending on the hiring date

• Entitled to compensation for a service-connected disability and hired within one year after being discharged or released from active duty

• Entitled to compensation for a service-connected disability and unemployed for at least six months in the 1-year period ending on the hiring date

The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment, hours the veteran works, and the amount of first-year wages paid.

Ineligible Individuals

Wages paid to certain employees do not qualify for the credit even if the employee is a qualified veteran. Ineligible individuals include the following.

1. Persons related to the employer

2. Dependents of the owner of the business

3. Prior employees

4. Individuals working fewer than 120 hours

5. Individuals hired as replacement workers during a strike or walkout

6. Individuals who receive no more than half of their wages from the employer for working in the employer’s trade or business

WOTC Certification

Farmers must obtain certification for potential employees from the state workforce agency in order to qualify for the WOTC. The following steps are required for WOTC certification.

1. The farmer prescreens potential employees by completing Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit. If the farmer believes the applicant is a member of a targeted group, the form must be completed no later than the day the job offer is made. Form 8850 must then be submitted to the state workforce agency no later than the 28th day after the job applicant begins work for the farmer.

2. One of the following forms must be completed and sent to the state WOTC coordinator.

a. ETA Form 9062, Conditional Certification Form, if the job applicant received this form from a participating agency, such as the Jobs Corps

b. ETA Form 9061, Individual Characteristics Form, if the job applicant did not receive a conditional certification

3. The state WOTC coordinator must certify the job applicant as a qualified veteran.

Calculating the Credit

In order to claim the WOTC, the farmer must keep track of how many hours the qualified veteran worked, the veteran’s hire date, wages paid during the year, and in which category the veteran was certified before completing Form 5884, Work Opportunity Credit.

Qualified wages for purposes of the credit generally include all compensation considered as wages for federal unemployment tax (FUTA) purposes. If the work performed by an employee during more than half of any pay period qualifies under FUTA as agricultural labor, that employee’s wages subject to social security and Medicare taxes are qualified wages. In other words, the wages still qualify even if the farmer is exempt from FUTA because he does not pay more than $20,000 in wages per quarter or employ more than 10 workers during any 20-week period.

Generally, the credit is 40% of the applicable first-year wages for the qualified veteran. However, if the veteran has worked at least 120 hours but less than 400 hours for the employer, the credit is limited to 25% of the applicable first-year wages.

The amount of qualified first-year wages that can be taken into account for a qualified veteran is limited to the following.

• $6,000 for a qualified veteran certified as being either:

A member of a family receiving assistance under the Supplemental Nutrition Assistance Program for at least a 3-month period during the 15-month period ending on the hiring date, or

Unemployed for at least four weeks but less than six months in the 1-year period ending on the hiring date.

•$12,000 for a qualified veteran certified as being entitled to compensation for a service-connected disability and either:

Hired not more than one year after being discharged or released from active duty in the U.S. Armed Forces, or

Began work before November 22, 2011, and was unemployed for at least six months in the 1-year period ending on the hiring date.

• $14,000 for a qualified veteran who began work after November 21, 2011, and was certified as being unemployed for at least six months in the 1-year period ending on the hiring date

•$24,000 for a qualified veteran who began work after November 21, 2011, and was certified as being entitled to compensation for a service-connected disability, and was unemployed for at least six months in the 1-year period ending on the hiring date

After calculating the amount of the credit, the deduction for wages paid must be reduced by the amount of the credit.

Example 1. Ted Tiller hires Marc to work full time during the April/May planting season. Marc works for a total of 240 hours and earns $3,600. If Marc had been unemployed for at least 4 weeks, he would qualify for the 25% credit on the $3,600 of wages, or $900.

Example 2. Use the same facts as above, except Marc becomes a full-time employee and works for more than 400 hours during 2012. Marc had also been unemployed for more than six months. If he earned $20,000, he would qualify for a 40% credit on $14,000, or $5,600.

Caution. To qualify for the credit, the employer must complete the certification papers when the worker is hired. These forms can be downloaded at:

http://www.irs.gov/pub/irs-pdf/f8850.pdf

http://www.doleta.gov/business/incentives/opptax/PDF/eta_form_9061.pdf

A worker that has been pre-certified must give the employer Form 9062.

Issued by Gary Hoff and Carolyn J. Schimpler
Department of Agricultural and Consumer Economics
University of Illinois

Hiring Farm Workers Under the Age of 16

By Dee Jepsen, State Agricultural Safety Leader, Ohio State University Extension, Department of Food, Agricultural, and Biological Engineering

Ohio farmers will continue to hire teens younger than 16 years old, now that Department of Labor has rescinded their stricter proposal to ban all contact with tractors and power-driven machinery. So what does that mean for Ohio teens looking for summer employment?

The current legislation is part of the Fair Labor Standards Act and falls under the Wage and Hour Division within the Department of Labor. This law was written nearly 45 years ago when it was determined certain tasks were dangerous for children under 16 years of age. Working with tractors greater than 20 horsepower and farm machinery were considered hazardous situations. However, there was an educational exemption put into place that would – and still does – allow students to be trained about these dangers, and then permitted to be hired.  This program is commonly called the Tractor and Machinery Certification program.  This is a 24-hour training class that ends with a written exam and a tractor skill test.

The current book that satisfies the educational training can be obtained through any OSU Extension county office. It is cataloged in the 4-H Family Guide, titled the National Safe Tractor and Machinery Operation Program. While this booklet will offer the educational piece for teens to self-study, the students will still need to complete the accompanying testing before certificates can be issued. 

According to the current legislation, the training programs can be offered through Extension and secondary school agricultural programs. While Ohio typically certifies 150 – 300 students each year, trainings are typically not available in every county of our state.  With the recent attention to this legislation, there has been an increase in awareness about the trainings. Farm managers may have become relaxed in requiring their student hires to have the certification. However, there has always been laws in this area, and will continue to be there until changes are made. Therefore, it may be to the best interest of the farm to be sure the students younger than 16 have training before they operate tractors greater than 20 HP and farm machinery. 

Not having the training course does not exclude students from doing entry-level work; it merely keeps them from working in those environments that were deemed “hazardous” by the Secretary of Labor.  A complete list of those tasks include:

  1. Operating a tractor of over 20 PTO horsepower, or connecting or disconnecting an implement of any or its parts to or from such a tractor.
  2. Operating or assisting to operate (including starting, stopping, adjusting, feeding, or any other activity involving physical contact associated with the operation) of the following machines: Corn picker, cotton picker, grain combine, hay mower, forage harvester, hay baler, potato digger, mobile pea viner, feed grinder, crop dryer, forage blower, auger conveyor, or the unloading mechanism of a non-gravity type self-unloading wagon or trailer, power post-hole digger, power post driver, or non-walking type rotary tiller.
  3. Operating or assisting to operate (including starting, stopping, adjusting, feeding, or any other activity involving physical contact associated with the operation of) any of the following machines: Trencher or earth moving equipment, fork lift, or power-driven circular, band, or chain saw.
  4. Working on a farm in a yard, pen, or stall occupied by a: Bull, boar, or stud horse maintained for breeding purposes; or sow with suckling pigs, or cow with newborn calf (with umbilical cord present).
  5. Felling, bucking, skidding, loading, or unloading timber with butt diameter of more than six inches.
  6. Working from a ladder or scaffold (painting, repairing, or building structures, pruning trees, picking fruit, etc.) at a height of over 20 feet.
  7. Driving a bus, truck, or automobile when transporting passengers, or riding on a tractor as a passenger or helper.
  8. Working inside: A fruit, forage, or grain storage designed to retain an oxygen deficient or toxic atmosphere; an upright silo within two weeks after silage has been added or when a top unloading devise is in operating position; a manure pit; or a horizontal silo when operating a tractor for packing purposes.
  9. Handling or applying (including cleaning or decontaminating equipment, disposal or return of empty containers, or serving as a flagman for aircraft applying) agricultural chemicals classified under the Federal Insecticide, Fungicide, and Rodenticide Act (as amended by Federal Environmental Pesticide Control Act of 1972) as Toxicity Category II, identified by the word “Warning” on the label;
  10. Handling or using a blasting agent, including but not limited to, dynamite, black powder, sensitized ammonium nitrate, blasting caps, and primer cord.
  11. Transporting, transferring, or applying anhydrous ammonia.

Additional information about the Fair Labor Standards Act and the Hazardous Occupations for children working in Agriculture, you can read the factsheet, Know the Rules When Employing Minors on Your Farm:  ohioline.osu.edu/anr-fact/pdf/0026.pdf  

 It should be noted that these rules and training programs are not required when the students are working for their parents’ farms.

Ohio Farm Custom Rates 2012

By: Barry Ward, Leader, Production Business Management, Ohio State University Extension, Department of Agricultural, Environmental and Development Economics

A large number of Ohio farmers hire machinery operations and other farm related work to be completed by others. This is often due to lack of proper equipment, lack of time or lack of expertise for a particular operation.  Many farm business owners do not own equipment for every possible job that they may encounter in the course of operating a farm and may, instead of purchasing the equipment needed, seek out someone with the proper tools necessary to complete the job. This farm work completed by others is often referred to as “custom farm work” or more simply “custom work”. A “custom rate” is the amount agreed upon by both parties to be paid by the custom work customer to the custom work provider.

The custom rates reported in this publication are based on a statewide survey of 122 farmers, custom operators, farm managers and landowners conducted in 2012. These rates, except where noted, include the implement and tractor if required, all variable machinery costs such as fuel, oil, lube, twine etc., and the labor for the operation.

There is no assurance that the average rates reported in this publication will cover your total costs for performing the custom service or that you will be able to hire a custom operator for the average rate published in this factsheet. Calculate your own costs carefully before determining the rate to charge or pay.

Some custom rates published in this article have a wide range. Possible explanations are the type or size of equipment used, size/shape of fields, condition of crop (for harvesting operations), the value of labor, the mix of labor and equipment used and the different income needs of full-time custom operators versus farmers supplementing their income. Also some custom operations are provided at bargain rates due to family relationships between the parties or due to the fact that custom providers may see an increased probability of eventually securing the custom farmed farmland in a cash rental or other rental agreement.

Charges may be added if the custom provider considers a job abnormal such as distance from the operator’s base location, difficulty of terrain, amount of product or labor involved with the operation, or other special requirements of the custom work customer.

Publications are available that may help in calculating your total costs of performing a given custom operation. Some of the online resources available that may be of assistance include:

Farm Machinery Cost Estimates available at:

http://faculty.apec.umn.edu/wlazarus/documents/machdata.pdf

Machinery Economics at farmdoc:

http://www.farmdoc.illinois.edu/manage/index.asp

Estimating Farm Machinery Costs

http://www.extension.iastate.edu/agdm/crops/html/a3-29.html

Before entering into an agreement, discuss all of the details of the specific job with the other party.

Fuel prices have an impact on custom rates and rates may fluctuate based on large movements in fuel prices. The approximate price of diesel fuel at the time of this survey was $3.75-$4.00 per gallon for off-road (farm) usage.

For the custom rates reported in this publication the average is a simple average of all the survey responses. The “Low” and ‘High” rates represent -/+ one standard deviation around the average. (Standard deviation is a measure of the variability of the survey responses and one standard deviation both above and below the average includes approximately two-thirds of all survey responses.)

The Factsheet complete with all published Ohio Farm Custom Rates for 2012 is available online at:

http://aede.osu.edu/programs-and-research/osu-farm-management/publications

2012 Ohio Beef Enterprise Budgets

By: Barry Ward, Leader, Production Business Management
Department of Agricultural, Environmental, and Development Economics

Newly updated OSU Extension Beef Enterprise Budgets for 2012 have been completed and posted to the Farm Management Website of the Department of Agricultural, Environmental and Development Economics. Updated Enterprise Budgets can be viewed and downloaded from the following website:

http://aede.osu.edu/programs/farmmanagement/budgets

Beef Enterprise Budgets posted for 2012 include:

Market Steer Budget – Days on Feed – 232 (Corn/Soybean Meal Ration)
Market Steer Budget – Days on Feed – 250 (Corn/DDG Ration)
Yearling Market Steer Budget – Days on Feed – 182 (Corn/Soybean Meal Ration)
Yearling Market Steer Budget – Days on Feed – 190 (Corn/DDG Ration)
Market Heifer Budget – Days on Feed – 220 (Corn/Soybean Meal Ration)
Cow-Calf Budget – Spring Calving

 

Our enterprise budgets are compiled on downloadable Excel Spreadsheets that contain macros for ease of use. Users can input their own production and price levels to calculate their own numbers. Detailed footnotes are included to help explain methodologies used to obtain the budget numbers.

Authors of these beef budgets include Dr. Steve Boyles, Extension Beef Specialist; John Grimes, OSU Extension Beef Coordinator; David Dugan, Extension Educator, Agriculture and Natural Resources, Brown, Adams and Highland Counties; Mike Estadt, Extension Educator, Agriculture and Natural Resources, Pickaway County; Stan Smith, Extension Program Assistant, Agriculture and Natural Resources, Fairfield County; Jeff Fisher, Extension Educator, Agriculture and Natural Resources, Pike County; Barry Ward, OSU Extension, Leader, Production Business Management; and Seth Wilkerson, Undergraduate Student, Agribusiness and Applied Economics, OSU Department of Agricultural, Environmental and Development Economics.