Farm Bankruptcies are Stabilizing

Sources: Robert Dinterman and Ani L. Katchova, Farm Income Enhancement Program, Department of Agricultural, Environmental and Development Economics- The Ohio State University

Chapter 12 bankruptcy filings have been fairly stable over the past few quarters and have stabilized to around the same levels as when chapter 12 became a permanent fixture of the bankruptcy code in 2005. The US experienced elevated levels of chapter 12 filings towards the end of 2009 through mid-2012, but aside from the second quarter of 2017 there has not been a quarter with more than 150 chapter 12 bankruptcies filed and that is a good sign for the agricultural sector. In general, the second quarter, which consists of the period between April 1st and June 30th, is the quarter that typically has the highest number of bankruptcies in a year.

While nationally there has been a stabilization of farm bankruptcies, there is still substantial regional variation in farm bankruptcies and some areas are doing better than others across the US. For instance, Wisconsin led the nation in farm bankruptcies over the past year with 47 chapter 12 cases filed between October of 2017 and September of 2018. This has been a recent trend for Wisconsin as they had 41 filed the 12 month period before October 2017 and 36 the 12-month period before that. While Wisconsin has had an upward trend, they have not seen the largest increase in bankruptcies year-over-year as Nebraska, New York, and Minnesota have seen larger gains in the number of farm bankruptcies filed since October 1st of 2017.

Read the full 2018 Farm Bankruptcy Updated Report

Small Farm & New Farm College Programs to be Held

By Tony Nye, Extension Educator

Are you a small farm landowner wondering what to do with your acreage? Are you interested in exploring options for land uses but not sure where to turn or how to begin? Have you considered adding an agricultural or horticultural enterprise but you just aren’t sure of what is required, from an equipment, labor, and/or management perspective? Are you looking for someplace to get some basic farm information? If you or someone you know answered yes to any of these questions, then the Ohio State University New and Small Farm College program may be just what you are looking for.

The Ohio State University New and Small Farm College is an 8 session short course that will be held one night a week. The 2019 Ohio New and Small Farm College program will be held in three locations across the state including:

Miami Valley CTC, West Building, Room 179, 6800 Hoke Road, Englewood, OH 45315. Classes will be held on Tuesdays beginning January 8 and concluding on February 26, 2019. Inclement weather makeup date will be March 5. Contact the Montgomery County Extension Office at 937-224-9654.

Vinton County area at the Community Building, 31935 State Route 93, McArthur, OH 45651. Classes will be held on Tuesdays beginning January 15 and concluding March 5, 2019. Inclement weather makeup will be March 12. For more information, contact Vinton County Extension at 740-596-5212.

Adams County area at the North Adams High School, 96 Green Devil Drive, Seaman, OH 45679. Classes will be held on Wednesdays beginning January 16 and concluding March 6, 2019. Inclement weather makeup date will be March 13.  For more information, contact Adams County Extension at 937-544-2339.

All colleges will start each evening at 6:00 PM with a light dinner with the nightly presentations beginning at 6:30 Pm and concluding at 9:00PM.

Topics that will be covered in the Small Farm College course include: Getting Started (goal setting, resource inventory, business planning), Appropriate Land Use -Walking The Farm, Where to Get Assistance, (identifying various agencies, organizations, and groups), Natural Resource Management including soils, ponds, woodlands and wildlife, Legal Issues, Insurance, Business Structure, Finances & Record Keeping, and Marketing Alternatives, Crop and Horticultural Production Options, Animal Production Options,

The cost of the course is $150 per person, $100 for an additional family member. Each participating family will receive a small farm college notebook full of the information presented in each class session plus additional materials. Registrations are now being accepted. For more details about the course and/or a registration form, contact Tony Nye, Small Farm Program Coordinator 937-382-0901 or email at nye.1@osu.edu.

 

Agronomy and Farm Management Podcast

by: Amanda Douridas and Elizabeth Hawkins

Stay on top of what is happening in the field and the farm office as Amanda Douridas and Elizabeth Hawkins interview experts in agronomy and farm management. Hosted by Ohio State University Extension, this podcast takes a bi-monthly dive into specific issues that impact agriculture, such as: weather, land value, policies, commodity outlooks, and more.

This podcast began in May 2018 and has a great library of podcasts to choose from. This winter, we will feature some of the Ask the Expert interviews that occurred during Farm Science Review on Farm Management topics. Catch up on the ones you missed during the show.

Subscribe through iTunes at http://go.osu.edu/iTunesAFM or Stitcher at http://go.osu.edu/StitcherAFM to have the newest episodes added to your playlist. Stay up to date with us on Facebook @AFMPodcast and Twitter @AFM_Podcast.

 

2019 Outlook Meetings to be held Across Ohio

by Amanda Douridas, Extension Educator

Ohio State University Extension is pleased to announce the 2019 Agricultural Outlook Meetings! In 2019 there will be seven locations in Ohio. Each location will have a presentation on Commodity Prices- Today’s YoYo. Additional topics vary by location and include U.S. Trade Policy: Where is it Headed, Examining the 2019 Ohio Farm Economy, Weather Outlook, Dairy Production Economics Update, Beef and Dairy Outlook, Consumer Trends, and Farm Tax Update.

Join the faculty from Ohio State University Extension and Ohio State Department of Agricultural, Environmental, and Developmental Economics as they discuss the issues and trends affecting agriculture in Ohio. Each meeting is being hosted by a county OSU Extension Educator to provide a local personal contact for this meeting. A meal is provided with each meeting and included in the registration price. Questions can be directed to the local host contact.

The outlook meeting are scheduled for the following dates and locations:

Date: January 14, 2019 Time: 7:30 am – 10:30 am Speakers: Ben Brown, Barry Ward, Ian Sheldon, Zoe Plakias, Aaron Wilson Location: Emmett Chapel, 318 Tarlton Rd, Circleville, OH 43113 Cost: $10.00 RSVP: Call OSU Extension Pickaway County 740-474-7534 By: January 12th More information can be found at: http://pickaway.osu.edu

Date: January 17, 2019 Time: 8:00 am – noon Speakers: Barry Ward, Ben Brown, Ian Sheldon, Aaron Wilson Location: Der Dutchman, Plain City, 445 S Jefferson Ave. Cost: $15.00 RSVP: Call OSU Extension, Union County 937-644-8117 By: January 10th More information can be found at: http://union.osu.edu

Date: January 24, 2019 Time: 9:00 am – 12:00 noon Speakers: Barry Ward, Ben Brown, David Marrison Location: St Mary’s Hall 46 East Main St. Wakeman, OH 44889 Cost: No Charge; $20.00 if past deadline RSVP: Call OSU Extension, Huron County 419-668-8219 By: January 22nd More information can be found at: http://huron.osu.edu

Date: January 28, 2019 Time: 6:00 pm – 9:00 pm Speakers: Ian Sheldon, Ben Brown, Aaron Wilson Location: Jewell Community Center Cost: $10.00 (after deadline $20.00) RSVP: OSU Extension, Defiance County 419-782-4771 By: January 22nd More information can be found at: http://defiance.osu.edu

Date: January 30, 2019 Time: 9:30 am – 3:30 pm Speakers: Ian Sheldon, Ben Brown, Barry Ward, Dianne Shoemaker, David Marrison, Kenneth Burdine Location: Fisher Auditorium Cost: $15.00 RSVP: Call OSU Extension, Wayne County 330-264-8722 By: January 24th More information can be found at: http://wayne.osu.edu

Date: February 13, 2019 Time: 5:30 pm – 9:00 pm Speakers: Barry Ward, Ben Brown, Ian Sheldon Location: Wayside Chapel, 2341 Kerstetter Rd.,  Bucyrus OH 44820 Cost: $15.00 RSVP: Call OSU Extension, Crawford County 419-562-8731 or email hartschuh.11@osu.edu By: February 5th More information can be found at: http://crawford.osu.edu

Date: March 22, 2019 Time: 11:00 am – 4:00 pm Speakers: Barry Ward, Ben Brown, David Marrison, Ian Sheldon Location: Chamber Ag Day / Ag Outlook meeting, Darke County Romers 118 E Main St., Greenville Registration Flyer: http://go.osu.edu/2019darkeagoutlook Cost: $20 RSVP: Darke County Extension office at 937-548-5215 By: March 16th More information can be found at: http://darke.osu.edu

 

Ohio Agricultural Lending Outlook: Fall 2018

Sources: Eric C. Davis, Robert Dinterman, and Ani L. Katchova
Farm Income Enhancement Program
Department of Agricultural, Environmental and Development Economics
The Ohio State University

Financial stress is a problem afflicting numerous Americans. The Financial Health Institute describes it as a “result of financial and/or economic events that create anxiety, worry, or a sense of scarcity”1. When trying to understand the level of financial stress that farmers are facing, the most tangible window through which to glimpse that condition is loan payments. By understanding whether or not farmers are able to make timely loan payments, one can know if farm income is sufficient to allow debts to be covered, and the most common way of doing this is by examining delinquency data, which is information that lending institutions report concerning the value of loans that are more than 90 days overdue. Read the full article by clicking on this link: Ag Lending Outlook FIE 2018-1mkmj88

Ohio State University Extension On-Farm Energy Demand Monitoring Project

Chris Zoller –Extension Educator, ANR & Eric Romich- Extension Field Specialist, Energy Education

Greater automation on farms has resulted in an increase in energy consumption on many farms. Due to increased electrical usage, many farms are now billed on a commercial rate structure. Unlike residential rates, which are based primarily on total energy usage measured in kilowatt hours (kWh), commercial accounts are also charged for the highest peak demand usage spike over a short time period measured in kilowatts (kW).

Ohio State University Extension secured grant funding to investigate how peak energy demand affects livestock facilities and, in turn, the manner by which farmers can implement energy management strategies, and make investments in equipment to minimize costs and promote long-term sustainability. We have equipment installed on six university and/or private swine and dairy farms across the state. Monitoring equipment installation was finalized earlier this year and we have begun collecting data from each cooperating farm. OSU Extension personnel involved in the project include Eric Romich, Tim Barnes, Rory Lewandowski, Eric Richer, Dale Ricker, and Chris Zoller.

While we are have not collected enough data to make any specific recommendations, we have a few months of data collected that has provided us the opportunity to make sure our monitoring equipment is functioning properly. As data is collected, it is shared with faculty and students in the Ohio State University College of Computer and Electrical Engineering. Students and faculty in the college analyze the data to develop a model that will help us interpret the findings.

Click Here to Access Full Report Which Shows Results

Observations

Many farmers are aware if they are on a demand rate. However, fewer farmers fully understand the details of how their demand charges are calculated including monthly measured demand formulas, power factor correction penalties, and if they are charged a minimum monthly demand based on seasonal spikes. These specific electric rate details greatly influence possible solution strategies.

Based on the preliminary data, there appears to be some motor loads that can be shifted (load shifting) to perform work during times when other critical motor loads are idle, thus reducing demand charges. Ultimately, energy management strategies to reduce demand cost will likely include a mixture of energy conservation, energy efficiency technologies, programmable logic controls and timers to preform load shifting, and possible on-site electric generation.

Summary

Obviously, farmers are interested in ways to reduce energy operational cost. However, before making investments in energy efficiency and renewable energy equipment, it is important to understand how you are charged for electricity. Some farms are still on residential electric rate tariffs and their bills are relatively easy to understand. However, because farms are using more electric, many farms are now on commercial electric rate tariffs that are more complex. Taking the time to investigate your rate tariff and analyze your consumption patterns will help you prioritize potential energy savings solutions, providing you the greatest return on your investment.

Ag Lender Seminars feature Federal Reserve Bank of Kansas City Economist

By Wm. Bruce Clevenger, Amanda Douridas & Rory Lewandowski, Extension Educators

The 2018 OSU Extension Agricultural Lender Seminars will feature keynote speaker, Courtney Cowley, Economist at the Federal Reserve Bank of Kansas City, Omaha, Nebraska.  Cowley will speak to each of the three regionally offered Ag Lender seminars scheduled in October 2018.  She will share her research and the role of the Federal Reserve Bank with her topic “Outlook for the U.S. Economy with Implications for the Ag Sector.”  Cortney Cowley is an economist in the Regional Affairs Department of the Federal Reserve Bank of Kansas City. Her current research focuses on agricultural finance, commodity markets, farm management, and natural resource economics and policy. Cowley’s responsibilities also include writing for the Tenth District Survey of Agricultural Credit Conditions and the Federal Reserve System’s Agricultural Finance Databook.    Cowley joined the Bank in 2015 after completing her Ph.D. in Agricultural Economics at Oklahoma State University. She also holds a B.S. degree in Biosystems Engineering from Oklahoma State and a M.S. degree in Civil Engineering from Colorado State University.

Additional speakers at each location include: Farm Policy & Commodity Outlook – Ben Brown, OSU CFAES, Farm Mgmt. Program Mgr.; Ohio Farm Economy & Production Economics – Barry Ward, OSU Extension, CFAES, Production Business Management; Dairy Production Economics – Dianne Shoemaker, OSU Extension, CFAES, Field Specialist; Hops, Barley & Ohio’s Specialty Crops – Brad Bergefurd, OSU Extension, CFAES, Extension Educator & Horticulture Specialist.

The three Ag Lender Seminars will be as follows:

Tuesday, October 16

Champaign Co. Community Center Auditorium

1512 South US Highway 68

Urbana, OH  43078

 

Wednesday, October 17

Putnam Co. Educational Service Center

Assembly Hall

124 Putnam Parkway

Ottawa, OH 45875

 

Thursday, October 18

Buckeye Agricultural Museum

877 West Old Lincoln Way

Wooster, OH 4469

Seminar programs begin promptly at 9:15 a.m. and conclude by 3:15 pm.  Registration information is available at: https://u.osu.edu/aglenderseminars/  or by contacting Bruce Clevenger, OSU Extension Educator, Defiance County at 419-782-4771 or clevenger.10@osu.edu.

OSU Extension conducts the seminars from input from Ag Lenders, County Extension Educators and Extension Specialists.  The seminars are designed to provide information that Ag Lenders will use directly with their customers, indirectly within the lending industry, and as professional development for current issues and trends in production agriculture.  OSU Extension has been offering Ag Lenders seminars for nearly 30 years.

 

 

Annie’s Project Course- Empowering Women in Agriculture

by: Jacqueline Kowalski & Robin Christensen, Extension Educators

 

 

OSU Extension in Summit and Portage Counties are teaming up to offer Annie’s Project from October 9th– November 13th, 2018. Annie’s project is a six-week program designed to address risk management education for farm women. Its objective is to educate women entrepreneurs so that they are more prepared to make farm management decisions. While a large number of farm women own and operate farms, others play a major role in the decision-making process of farm operations for farm families. Annie’s Project provides in-depth sessions on topics that are important for decision-making of the family farm. The program topics covered include human resources, legal risks, financial risks, marketing risks, and production costs and risks. Sessions are designed to be very interactive between the presenters and the participants. Information presented is tailored to meet the needs of participants in their own geographical areas.

Annie was a woman who grew up in a small rural community with the life-long goal of being involved in production agriculture. She spent her lifetime learning how to be an involved business partner with her husband, and together they reached their goals and achieved success. Annie’s daughter, Ruth Hambleton, a former Extension Educator for the University of Illinois, founded Annie’s Project in 2000 in honor of her mother. Annie’s Project is designed to take Annie’s life experiences and share them with other women in agriculture who are living and working in this complex, dynamic business environment. Additional details on Annie’s life can be found https://www.anniesproject.org/

The 6-week training will begin on Tuesday October 9th at 6:00pm, with dinner starting at 5:30pm. Registration is due October 5th, 2018. Classes will rotate between the Summit and Portage County Extension offices in Stow and Ravenna. The course fee is $100.

Please contact Robin Christensen with questions or for an application at 330-296-6432 or e-mail at Christensen.227@osu.edu

 

Consider Pros, Cons of Alternative Grain Storage Methods

by: Source: Chris Bruynis, OSU Extension Ross County

Farmers are faced with making some tough decisions this fall going into harvest. I am hearing there are large quantities of 2017’s crop still in storage in the local elevators which could lead to limited hours and inadequate storage for the 2018 large crop that is being harvested. Also there are pricing and basis concerns which clearly favor keeping the grain on the farm. These issues are making farmers scramble to find storage options and find them quick.

Ken Hellevang, North Dakota State University Extension agricultural engineer offers some advice that we need to think about when making this decision.  The important point is that all storage options should keep the grain dry and provide adequate aeration to control grain temperature. Grain must be dry and cool (near the average outdoor temperature) when placed in alternative storage facilities because providing adequate, uniform airflow to dry grain or cool grain coming from a dryer is not feasible.

Also farmers need to think about the structural issues of the building. Grain pushing against walls can damage buildings not built for grain storage. The wall must be anchored securely, and its structural members must be strong enough to transfer the force to the building poles or support structure without breaking or excessive bending. He suggests hiring an engineer to complete a structural analysis and follow the recommendations to reinforce the structure. The last thing farmers need is structural failure where we lose the grain and the structure.

Other option beside existing buildings could include poly bags, but it does not prevent mold growth in damp grain or insect infestations. Place grain in the bag at recommended storage moisture contents based on grain and outdoor temperatures during the potential storage period. Heating will occur if the grain exceeds a safe storage moisture content and it cannot be aerated to control heating. The average temperature of dry grain will follow the average outdoor temperature. If considering this option, select an elevated, well-drained site for the storage bags. Run the bags north and south so solar heating is similar on both sides. Sunshine on just one side heats that side, which can lead to moisture accumulation in the grain and spoilage on the cool side.

Grain covers over a pile could be an option as well, but site preparation might be costly. A combination of restraining straps and suction from the aeration system, when designed correctly, holds grain covers in place. This system can also provide adequate airflow through the grain to control grain temperature. Place perforated ducts on the grain under the cover to provide a controlled air intake for the aeration system and airflow near the cover to minimize condensation problems under the cover. Place properly sized and spaced ducts under the pile on the ground to pull air through the grain. Some storage options use a perforated wall for the air inlet.

For additional information and building specifications on alternative storage option go to https://www.ag.ndsu.edu/pubs/ageng/grainsto/ae84.pdf.

Net Farm Income Expected to Decline Again in 2018 After a Small Rebound Last Year

by: Ana Claudia Sant’Anna[1], Ani Katchova[2] and Ben Brown[3]

Department of Agricultural, Environmental, and Development Economics, The Ohio State University

Click here for full article with graphs

The United State Department of Agriculture (USDA), on August 30, forecasted U.S. net farm income for 2018 to decline 13% from last year, from $75.5 billion in 2017 to $65.7 billion in 2018 (USDA 2018). If realized, U.S. net farm income would decrease to levels witnessed in 2016 (Figure 1). This decline is even larger when we consider inflation-adjusted values, showing a 14.8% decrease in real U.S. net farm income. The USDA also made a similar downward forecast for U.S. net cash income. Net cash income is projected to drop 12% in 2018, from $104 billion in 2017 to $91.5 billion in 2018. These declines in farm income reverse the small rebound in income in 2017 to what would be the second lowest values in inflation-adjusted terms since 2002.

The latest USDA forecast did not consider or include payments made under the Market Facilitation Program (MFP) to producers in response to decreased prices, as a result of ongoing trade negotiations with several U.S. trading partners. A question which may arise is how MFP could change the forecast for U.S. net farm income. The MFP program is expected to make direct payments to farmers close to $4.7 billion with purchases of excess commodities of $1.2 billion and $200 million reserved for identifying new international markets through the Foreign Agricultural Service for an initial total of $6 billion on agricultural commodities (USDA, Sept. 2018). If trade negotiations continue to weigh on commodity prices, another payment of $4.7 billion could be released to U.S. producers later this fall. Considering that in the 2018 forecast, net government payments represented 7.8% of net farm income and that net government payments (i.e. government payments subtracted from federal taxes paid by producers) were negative (- $5.2 billion), an increase in government benefits could mean a smaller decline in net farm income than expected. Nevertheless the downturn in the farming sector, witnessed since 2013, would still be present.

The USDA also released the estimates for Ohio net farm income for 2017. Similar to the U.S. estimates from 2017, Ohio net farm income showed an increase after large declines since 2013 (Figure 1). In fact, net farm income in Ohio in 2017 was about 3 times larger than that of 2016 (from $0.4 billion to $1.3 billion). The concern, though, is that the 2018 Ohio farm income would experience a downturn similar to the forecast for the 2018 U.S. net farm income. Figure 1 illustrates how Ohio and U.S. net farm income have trended in the past. They seem to follow similar trends which may mean that Ohio net farm income would probably see a decrease in 2018 with respect to 2017.

Net farm income for Ohio dating back to 1949 shows that the Ohio farm sector is not doing as well as it was 5 years ago (Figure 2). Although the drop in net farm income witnessed in 2016 was not as low as that during the 80s farm crisis, it is still the lowest since the 1980s in real terms. In fact, since 2014 Ohio net farm income has been below the 69 year average of $2 billion in 2018 dollars (Figure 2). The length of time which Ohio net farm income remains below its long-term average is concerning. In the twenty first century, Ohio net farm income remained below the 69 year average a couple of periods, but the longest duration was for four years (2005 to 2008). Current statistics, though, point to 2018 possibly being the fifth consecutive year that Ohio net farm income is below the long-term average. Greater emphasis should be placed on the length of the downturn rather than the fact that net farm income in Ohio is not as low as it was during the farm crisis. These observations made for Ohio echoes those of Gloy and Widmar for the U.S. net farm income (Gloy and Widmar 2018)

 

References

Gloy, B. and Widmar, D. (2018, September 4). “After 2017 Rebound, Net Farm Income to fall in 2018”. Agricultural Economic Insights. Retrieved September 10, 2018, from: https://ageconomists.com/2018/09/04/after-rebounding-in-2017-net-farm-income-to-slump-in-2018/

United State Department of Agriculture (USDA), Economic Research Service (ERS). (2018). 2018 Farm Sector Income Forecast. Retrieved September 10, 2018, from https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/farm-sector-income-forecast/

United State Department of Agriculture (USDA). (2018, September 4). USDA Launches Trade Mitigation Programs [Press release]. Retrieved September 10, 2018, from https://www.usda.gov/media/press-releases/2018/09/04/usda-launches-trade-mitigation-programs

[1] Post-Doctoral researcher in the Farm Income Enhancement Program

[2] Associate Professor and Farm Income Enhancement Chair

[3] Program Manager for the Farm Management Program