Manure Regulation in Ohio

Although long considered a natural fertilizer that can benefit our soils, manure has a history of increased regulation in recent years based on potential impacts to water quality.   The following explains how state and federal law regulates the production, storage and application of animal manure in Ohio.  

Livestock Environmental Permitting Program

Pricing Standing Corn for Silage Harvest – 2014

Dianne Shoemaker, Bill Weiss, and Normand St-Pierre Extension Dairy Specialists, The Ohio State University

If it’s late summer it’s time to talk about pricing a corn crop standing in the field for corn silage. This is always a challenging question as there are a number of factors that contribute to the final price agreed upon by the buyer and seller that are challenging to quantify.

This corn silage pricing discussion begins with a corn crop standing in the field. The grower’s goal is to recover the cost of producing and harvesting the crop plus a profit margin. Their base price would be the price they could receive for the crop from the grain market less harvesting/drying/storage costs. Hopefully, this would meet their goal of covering production costs and generating a profit. During price negotiations, it should be recognized that harvest risk is also being shifted from the grower to the buyer.

To the grain farmer, the corn crop has value beyond the income from the sale of grain. If the crop is sold as silage, the corn fodder is no longer available as ground cover and/or as a potential source of nutrients and organic matter. This creates an opportunity for the dairy farm to provide nutrients and organic matter back to the corn fields from subsequent manure nutrient applications.

Valuing the standing crop:

To look at the value of the corn as silage, we can estimate that a ton of corn silage made from a good corn crop, on average, contains approximately 7.5 bushels of corn (ranging from ~6.7 to 10 bushels).

If corn is worth $3.15 per bushel at harvest, then the standing corn for silage would be worth about $23.63 per ton before the cost of harvesting for grain. If we estimate a grain harvest cost of $76 per acre, or ~$4.22 per ton (combining, hauling, storing and drying of 2 points based on Ohio Farm Custom Rates 2014), then the corn silage is valued at $19.41 per ton. However, since the nutrient and organic matter value that is removed from the field when the whole corn plant is chopped is roughly equivalent to the cost of harvesting the crop as corn grain (offsetting each other), we can use the price of corn times 7.5 bushels as the basis for pricing a standing crop ($23.63 per ton with corn priced at $3.15 per bushel during harvest). This is a starting point, additional adjustments must be made.

Adjusting for dry matter

The values discussed above are for corn silage at 35% dry matter. Prices also have to be adjusted for different dry matter concentrations. If actual dry matter was 30%, then the value is about $20/ton (i.e., 30/35 = 0.85 x $23.63/ton). Corn chopped at more than about 38% DM or less than about 30% DM may not ferment properly and can be a problem. The price for this corn silage should be discounted. For more details, see: http://dairy.osu.edu/bdnews/Volume%2015%20issue%201%20file/Volume%2015%20Issue%201.html#Weiss

Considering feed value

At the 2009 Tri-State Dairy Nutrition Conference, Normand St-Pierre reviewed the difference between valuing corn silage using a 7 bushels of corn per ton method plus harvest and storage costs and an adjustment for 10% fermentation loss, versus pricing based on the prevailing feed nutrient value (Sesame) pricing method (See http://tristatedairy.osu.edu/Proceedings%202009/St-Pierre%20paper.pdf). This method values the silage at what its nutrients are worth based on a wider selection of feed prices plus the harvest and storage adjustments. The ratio of the two methods for 2005 to 2008, was 1.27. In other words, the nutrient value of silage to the cow was potentially worth up to 27% more than the value based on the market price for corn.

The SESAME value for Ohio corn silage is available in the most current edition of the Buckeye Dairy News available online at http://dairy.osu.edu. This is the nutrient value for AVERAGE corn silage delivered to the cow, so harvest, storage, moisture, shrink and risk costs must be deducted from the SESAME value. In addition, the SESAME value is based on average Ohio feed costs at a specific point in time. Local markets may give different results.

Other price adjustments and considerations

So, what does this mean in the real world? The 7.5-bushel method is a good starting point. There could be additional feed value to the buyer which has to be balanced against the harvest and fermentation risks that the buyer is assuming.

The last factor affecting the value of standing corn is risk. A farmer purchasing standing corn is assuming risk (Will it ferment properly? Can it be harvested at exactly the right time? What will the final nutrient content be? etc.).

The price for the standing crop should be discounted to recognize these risks. What is the right amount to discount? This is not an easy question and is one of the factors to consider when the buyer and seller are negotiating a final price. Setting the final, fair price for corn silage rests on an understanding of the needs of both the buyer and the seller and negotiating a price that ensures a reasonable profit for both.

Finally, it is critical that both parties agree on price, payment method and timing, crop measurement, restrictions, and similar details before the crop is harvested! Ideally, the agreement should be in writing and signed by both parties. These agreements are especially important when large quantities of crops (and money!) are involved. While this type of contracting may be uncomfortable for some producers, mainly because they aren’t used to conducting business on more than a handshake, it forces the parties to discuss issues up front and can minimize troubling misunderstandings after harvest.

 

Revised – 2013 ACRE payments for Corn

By: Chris Bruynis, PhD, Assistant Professor & Extension Educator, OSU Extension.

 

Earlier I had written an article on the possibility of Ohio getting an ACRE Payment for the 2013 corn crop.  The USDA corn yield for Ohio ended up at 177 bushels of grain, which was significantly higher than the 152 bushel five year Olympic average.  Initially I had overestimated the state revenue guarantee, which is actually $690 per acre.  Because of the higher yield and the corrected revenue guarantee at the state level, the market average price would need to fall below $3.90 for the 2013 crop.  Current estimates (August 2014) have the market average price at $4.45 which is significantly higher. With this new information, it is highly unlikely that corn will make a payment for the 2013 corn crop.

2014 Farm Bill Decisions: Program Choice – A Big Picture Perspective

By:  Carl Zulauf, Ohio State University, and Gary Schnitkey, Jonathan Coppess, and Nick Paulson, University of Illinois at Urbana-Chapaign

The 2014 farm bill gives Farm Service Agency (FSA) farm owners a 1-time opportunity to elect their Title 1 crop program for the 2014 through 2018 crop years.  Three program options exist: Agriculture Risk Coverage-individual (ARC-IC), Agriculture Risk Coverage-county (ARC-CO), and Price Loss Coverage (PLC) with the choice to buy the Supplemental Coverage (insurance) Option (SCO).  This article examines the choice between ARC-CO and PLC.  In contrast to ARC-CO and PLC, ARC-IC pays on 65% not 85% of program acres and is elected on a FSA farm basis, not a program crop basis.  ARC-IC thus is an option to consider based on the ARC-IC farm situation, including when (1) production on the ARC-IC farm unit is highly variable or (2) if fruits and vegetables may be planted on the ARC-IC farm.  To read more click here.

Leasing Your Land for Hunting: Legal Considerations

With fall quickly approaching, now is a good time to consider whether you should lease your land for hunting. Leasing your land for hunting can be beneficial by giving you an extra source of income as well as managing wildlife populations and decreasing crop damage. However, there are some considerations to make before granting that lease to someone.

Leasing Your Land for Hunting: Legal Considerations

With fall quickly approaching, now is a good time to consider whether you should lease your land for hunting. Leasing your land for hunting can be beneficial by giving you an extra source of income as well as managing wildlife populations and decreasing crop damage. However, there are some considerations to make before granting that lease to someone.

Do Futures Forecast the Future?

By: Carl Zulauf, Ohio State University, Nick Rettig, B.S., Ohio State University, and Matt Roberts, Associate Professor, Ohio State University

A common presumption is that futures prices can predict future price, specifically the price during the last or delivery month of trading on a futures contract.  This presumption has potential importance for both marketing and policy.  Many crop insurance contracts use futures prices to establish their pre-plant and harvest prices.  In addition, it is common to hear that futures prices should be used to forecast prices when evaluating the farm program choices in the 2014 farm bill.  This article calls into question the presumption that futures prices can predict future price.  It also finds that cash price performs as well as futures price in forecasting future price.  Because of the technical nature of the analysis, the article begins with its summary observations.  Readers can then decide if they want to read the details of the analysis. Click here to read Futures as Price Forecasts