Month: June 2015

2014 Farm Bill Sign-up is NOT Finished Yet!

By: Chris Bruynis, Assistant Professor and Extension Educator, Ross County

Many farmers are under the belief that they have completed all the necessary steps needed to complete the sign-up for the 2014 farm bill programs.  They made the yield update and base acre reallocation decisions and then they made the ARC/PLC decision for each farm.  So what decision is left to make?  Just as it has been in previous years, farmers still need to enroll in the farm bill program.  The enrollment window has been announced and will begin June 17, 2015, and will end Sept. 30, 2015.

The concern is if farmers do not know they have one more paper to sign at FSA they will lose out on any potential benefits, especially since this enrollment period will include both 2014 and 2015.  If farmers do not enroll their farms, then all the previous decisions on reallocations, updates, and program choice were all for nothing.  Also if landowners or farmers choose not to update yield, reallocate base acres, and make a program election, they can still enroll a farm into the new farm bill program. These farms would simply keep their existing yields and bases and will default to Price Loss Coverage (PLC) as their program choice.

Farmers are encouraged to contact Farm Services Agency and make an appointment to enroll their farm(s) into the 2014 farm bill programs.  Also do not forget to certify your 2015 planted acres with FSA. This is important to maintain the farm history, to determine farm bill payments under ARC-Individual, and provide information for future farm bill programs.

Western Ohio Cropland Values and Cash Rents 2014-15

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

Ohio cropland varies significantly in its production capabilities and cropland values and cash rents vary widely throughout the state. Generally speaking, western Ohio cropland values and cash rents differ from much of southern and eastern Ohio cropland values and cash rents. This is due to a number of factors including land productivity and potential crop return, the variability of those crop returns, field size and shape, drainage, population density, ease of access, market access, local market prices, potential for wildlife damage, field perimeter characteristics and competition for rented cropland in a region.

Western Ohio cropland values and cash rental rates are projected to decrease in 2015 due in large part to continued low to negative profit margin prospects for Ohio’s three major row crops (corn, soybeans and wheat). According to the Western Ohio Cropland Values and Cash Rents Survey, bare cropland values are expected to decrease from 5.2% to 11.9% in 2015 depending on the region and land class. Cash rents are expected to decrease from 6.2% to 8.5% depending on the region and land class.

The “Western Ohio Cropland Values and Cash Rents” study was conducted from February through May in 2015. The study is an opinion based survey surveying professionals with a knowledge of Ohio’s cropland values and rental rates. Surveyed groups include farm managers, rural appraisers, agricultural lenders, OSU Extension educators, farmers, landowners, and Farm Service Agency personnel.

When interpreting this summary of survey results please be aware that results will differ widely within a region and it will be useful to consider the ranges that are listed in the tables as you consider how your parcels may compare. It is also important to stress that land in a given region does not fall neatly into thirds of each land quality class (average, top and poor). There will likely be very little acreage in a given county or region that will fall into the “top” land category. Top land will typically be large tracts of land with highly productive soils. “Average” land will typically make up the majority of land in a given region or county while “poor” land will tend to be land with lower productivity soils, steep slopes, poor drainage, or come in smaller tracts (or a combination of these).

To access the complete summary go to:

http://aede.osu.edu/about-us/publications/western-ohio-cropland-values-and-cash-rents-2014-15

 

 

Ohio Corn and Soybean Enterprise Budgets Project Slightly Lower Costs But Low to Negative Returns

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

Production costs for Ohio field crops may be flat to slightly lower in 2015 but the profit picture looks poor, much the same as it did 2014. Variable costs for trend line Ohio corn and soybean production for 2015 will be slightly lower than 2014. Variable costs for corn (163 bushels per acre) for 2015 are projected to be $412 per acre. Variable costs for 2015 Ohio soybeans (48 bushels per acre) are projected to be $210 per acre. Lower energy and crop insurance costs and zero to slight increases for many other inputs have led to the slightly lower production cost projections for Ohio’s two major commodity crops.

With continued lower crop prices expected for 2015 returns will likely be low to negative for many producers. Projected returns above variable costs (contribution margin) range from $138 to $272 per acre for corn and $236 to $439 per acre for soybeans. (This is assuming fall cash prices of $3.65 per bushel for corn and $9 per bushel for soybeans which are both higher than present prices.)

Returns to land for Ohio corn (Gross Revenue minus all costs except land cost) are projected to range from -$86 to $35/acre in 2015 depending on land production capabilities. Returns to land for Ohio soybeans are expected to range from -$10 to $132 per acre depending on land production capabilities.

Total costs projected for trend line corn production in Ohio are estimated to be $847 per acre. This includes all variable costs as well as fixed machinery, labor, management and land costs. Fixed machinery costs of $130 per acre include depreciation, interest, insurance and housing. A land charge of $205 per acre is based on data from the Western Ohio Cropland Values and Cash Rents Survey Summary. Labor and management costs combined are calculated at $76 per acre. Returns Above Total Costs for trend line corn production are negative at -$230 per acre.

Total costs projected for trend line soybean production in Ohio are estimated to be $592 per acre. (Fixed machinery costs – $108 per acre, land charge – $205 per acre, labor and management costs combined – $57 per acre.) Returns Above Total Costs for trend line soybean production are also negative at -$143 per acre.

These projections are based on OSU Extension Ohio Crop Enterprise Budgets. Newly updated Enterprise Budgets for 2015 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/research/osu-farm-management/enterprise-budgets