Financial Management

OSU Agronomic Crops Team and the State Climate Office of Ohio to Host “Climate Smart: Farming with Weather Extremes”

Weather is almost always a challenge for agriculture, from too little or too much rain, late season freeze conditions, and severe weather impacts. Yet, having good management strategies for dealing with water, weeds, pests, diseases, and stress is all part of being climate smart.

After a short hiatus, the Climate Smart Conference is back! This year’s conference brings Ohio State and Central State Extension specialists and local producers together to discuss these important interactions between weather, climate, and agriculture. The event will occur on July 20, 2023, at the Der Dutchman located at 445 S. Jefferson Ave in Plain City, Ohio. The event will open at 8:30 AM and run until 3:30 PM with both a continental breakfast and lunch provided.

Speakers and topics include:

  • Weather and Climate Update – Aaron Wilson
  • Federal Climate Smart Funding Landscape with NRCS –
  • Extreme Weather and Crop Insurance – Margaret Jodlowski
  • Ag Water Management – Vinayak Shedekar
  • CSU Applied Research in Climate-Focused Areas – TBA
  • Panel – Local Producers, CSU Specialist, Glen Arnold (Manure), Bridget Britton (Farm Stress), Elizabeth Hawkins (Precision Ag)
  • Insect Pest Management – Andy Michel and Maggie Lewis
  • Economics and Grain Market Considerations – Seungki Lee

The event is free thanks to the following sponsors: Platinum – Ag Resource Management; Carbon by Indigo; Gold – AgCredit, Leist Mercantile, Ohio Corn & Wheat, and Ohio Soybean Council. Registration is required. Please register by Tuesday, July 18, 2023, at go.osu.edu/reg-climate-smart23 or by using the QR code.

OSU Extension Podcast bolsters Farm Management with new Co-Hosts

By Wm. Bruce Clevenger, OSU Ext Field Specialist, Farm Management

OSU Extension has surpassed 100 Episodes on the Agronomy and Farm Management Podcast with the leadership of Amanda Douridas and Elizabeth Hawkins.  Amanda Douridas is the OSU Extension Agriculture and Natural Resources Extension Educator in Madison County and Elizabeth Hawkins is an OSU Extension Field Specialist, Agronomic Systems.

On Episode 118, two new co-hosts began to alternate episodes between Agronomy and Farm Management.  Your new farm management co-hosts are Bruce Clevenger, OSU Extension Field Specialist, Farm Management and Josh Winters, OSU Extension Agriculture and Natural Resources Extension Educator, Jackson County.

Bruce Clevenger and Josh Winters will host Farm Management and Amanda and Elizabeth will continue with Agronomy.  “Farm management is important to your farming operations and Elizabeth and I are excited to partner with Bruce and Josh to enhance the farm management piece of the podcast,” says Amanda.

Episode 118 investigates Farm Insurance Policies with guest Robert Moore, J.D., Attorney, OSU Extension Agricultural and Resource Law Program.  “I would challenge you to find a more important component of farm management, that receives less attention than the farm insurance policy,” Robert Moore.

OSU Extension has many ag law resources available at https://farmoffice.osu.edu click on Law Library and Farm Office Blog.  Robert and Peggy Hall author weekly posts and write law bulletins are a wide range of topics from Agritourism to Zoning.

Visit https://go.osu.edu/afm to listen, subscribe, and suggest a topic for future episodes.  Listeners can also search their smart device app for Agronomy and Farm Management to listen and subscribe.

Consumer debt in U.S. hits $17 trillion dollars, U.S. agricultural real estate debt projected to record levels.

By Mike Estadt, OSU Extension Educator

It was reported by the Federal Reserve1 this week that U.S. consumers have accumulated a record $17 trillion dollars of debt or which $12.04 trillion related to mortgage debt.  Especially concerning was the increasing amount of credit card debt at $986 billion as reported by the Federal Reserve report.

The USDA Economic Research Service in its Farm Income and Wealth Statistics2 report released on February 7, 2023, reported U.S farm real estate debt is expected to be at record levels at $375.9 billion in 2023.  Farm sector real estate debt has been increasing since 2009 and is expected to reach an amount that is 87.5 percent higher in 2023 compared with 2009 in inflation-adjusted dollars.  (Table 1.)

Table 1.

The combination of low interest rates, increasing net farm income over the past six years (Table 2), and stronger equity positions because of increasing asset valuation, farmers have found themselves in the position to be active participants in the farmland market.

Table 2.

Taking on additional agricultural real estate debt comes with certain risks that should be carefully considered. Here are some of the key risks associated with increasing agricultural real estate debt:

Financial Risk: Increasing debt means higher interest payments and potentially higher overall financial obligations. If your agricultural operations face challenges such as fluctuating commodity prices, adverse weather conditions, or market uncertainties, it may become difficult to meet the increased debt obligations. This can lead to financial distress and potential default.

Market Risk: Agricultural markets can be volatile, influenced by factors such as global supply and demand, trade policies, weather events, and changing consumer preferences. If market conditions deteriorate, it may impact the profitability of your agricultural operations, making it harder to generate sufficient income to repay the debt.

Interest Rate Risk: Changes in interest rates can affect the cost of borrowing and your ability to service the debt. If interest rates continue to rise in the agricultural sector or if credit becomes harder to obtain, it will lead to higher debt servicing costs and potentially strain your financial position. It is essential to assess the potential impact of interest rate changes on your ability to manage the debt burden.

Property Value Risk: The value of agricultural real estate can fluctuate over time. If the value of the property decreases, it may affect your overall equity position and potentially limit your borrowing capacity for future needs. A decline in property value can also make it challenging to refinance existing debt or obtain favorable terms for additional loans.  Current conditions in Ohio and throughout the corn belt, predicate that this scenario has a low probability of happening.

Production Risks: Agriculture is subject to production risks, including weather-related events, pests, diseases, and other unforeseen challenges. These risks can impact crop yields, livestock health, and overall farm productivity. If your agricultural operations experience significant production setbacks, it may affect your ability to generate income and meet debt obligations. Lenders will want to see adequate risk management tools such as crop insurance for example to guard against revenue decreases.

Operational Risk: Expanding agricultural operations requires careful planning and management. Taking on additional debt means assuming more operational responsibilities and potentially increasing complexity. If the expansion is not well executed or managed efficiently, it can lead to operational inefficiencies, higher costs, and reduced profitability.

To mitigate these risks, it is crucial to conduct thorough financial analysis, stress testing, and risk assessments before taking on additional agricultural real estate debt. Maintaining a diversified income stream, having contingency plans, and keeping a buffer for unforeseen events can help manage and mitigate these risks. Additionally, seeking professional advice from agricultural consultants, financial advisors, and lenders can provide valuable insights and guidance in navigating these risks effectively.

If a grower is thinking about expansion of their farming operations with a farm purchase, lenders will require a financial analysis of the existing operation.  The Ohio State University Farm Business Analysis and Benchmarking program offers producers a complete a financial analysis of their farming operation.  This analysis will help you understand where your areas of profitability are in the business. It will give you tools to understand the numbers behind your analysis and will show you how to use them to further your success.  Visit https://farmprofitability.osu.edu/  for further information.

Sources:

https://www.newyorkfed.org/newsevents/news/research/2023/20230515

https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/

USDA ERS Forecasting Reduced Farm Income for 2023

By: Mike Estadt and Chris Zoller, OSU Extension Educators

Forecast

The United States Department of Agriculture Economic Research Service (USDA ERS) divides the country into regions for analysis and reporting purposes.  These regions are delineated by the types of agricultural production in each area.  Recently, USDA ERS announced its projection that average net cash income for all regions will be 18% lower when compared to 2022.

Net cash income is calculated by subtracting cash expenses from gross cash income.  Increases in production expenses, reduced receipts, and less Government payments are cited as contributing factors in the projected 18% decline in net cash income.  Reductions in net cash income are expected to range from -9% to as much as -30%.  The Heartland (which includes Ohio) is forecast to experience a 13% decline in net cash income.

What to Do?

Assuming this forecast is true, now is the time to formulate a plan.  We offer the following suggestions:

  • Regardless of what you produce, know your cost of production.
  • Review and adjust your budget: Take a close look at your financial situation and revise your budget to align with the projected reduced income. Identify areas where you can cut costs without compromising the quality of your operations. This may involve reducing expenses such as equipment purchases, inputs, or labor.
  • Diversify your income streams: Explore opportunities to diversify your income by expanding into complementary agricultural activities or exploring non-farm ventures. For example, you could consider value-added processing, agritourism, or direct marketing to consumers through farmers’ markets or online platforms.
  • Improve operational efficiency: Look for ways to enhance productivity and reduce waste on your farm. Implement efficient farming practices, optimize resource allocation, and consider adopting technologies that can streamline operations and reduce costs.
  • Evaluate crop and livestock selection: Assess the profitability and market demand for different crops or livestock products. If certain commodities are projected to have lower returns, consider diversifying your production mix by focusing on crops or livestock that may offer better profitability prospects.
  • Manage risk effectively: Given the uncertain agricultural market conditions, it’s crucial to have risk management strategies in place. Explore options such as crop insurance, futures and options contracts, or other risk management tools that can provide some protection against price volatility or unexpected events.
  • Seek additional education and resources: Stay informed about market trends, agricultural policies, and technological advancements. Attend workshops, webinars, or conferences to learn about best practices and access resources that can help you navigate challenging times.
  • Collaborate with other farmers and stakeholders: Engage with local agricultural organizations, cooperative extensions, or farmer networks to share knowledge, resources, and experiences. Collaborative efforts can help reduce costs through group purchasing, shared equipment, or joint marketing initiatives.
  • Explore government assistance programs: Stay updated on government programs and initiatives that provide financial assistance or support to farmers during challenging times. These programs may include subsidies, grants, or loans specifically designed for the agricultural sector.
  • Monitor and adapt: Regularly monitor your financial performance, market conditions, and emerging trends. Be prepared to adapt your strategies as needed to navigate changing circumstances and take advantage of new opportunities.

Utilize these resources as you evaluate your business and develop a plan.

 Summary

Remember that these are general suggestions, and the specific actions you should take will depend on your unique circumstances, the type of farming you engage in, and the specific factors affecting your local agricultural market. It’s advisable to consult with agricultural experts, financial advisors, or relevant professionals who can provide personalized guidance based on your specific situation.

References

USDA Economic Research Service Chart of Notes, https://www.ers.usda.gov/data-products/charts-of-note/?cpid=email

Farm Office Live Webinar Slated for April 21 at 10:00 a.m.

The OSU Extension Farm Office team invites you to attend the April Edition of the “Farm Office Live” Webinar on Friday, April 21 from 10:00 to 11:30 a.m. This monthly webinar allows Ohio farmers and agribusiness personnel to learn more about current farm management and agricultural law issues.

In this month’s webinar, the Farm Office Team will present the following topics:

Legislative and Case Law Update​ (Peggy Hall)

  • Farm Insurance Issues​ (Robert Moore)
  • “What is a ‘Taxable Gross Receipt’ under Ohio’s Commercial Activity Tax?”​ (Jeff Lewis)
  • Inflation and Interest Rates: An Update Including a Closer ​Look at Agricultural Machinery and Equipment​ (Barry Ward)
  • Crop Budgets/Income Outlook for ‘23​ (Barry Ward)
  • Avoid Chance by making 2023 Record Keeping Goals (Bruce Clevenger)

There is no fee to attend this webinar.  However, registration is required at go.osu.edu/farmofficelive

Check out farmoffice.osu.edu for all your farm management and ag & resource law needs.

Quarterly Grain Conversation Slated for April 14 at 7:30 a.m.

OSU Extension invites Ohio grain producers to grab a cup of coffee and join the next edition of a quarterly grain market conversation with Dr. Seungki Lee, Assistant Professor in the Department of Agricultural, Environmental and Development Economics (AEDE) from 7:30 to 8:00 a.m. on Friday, April 14, 2023.

During this webinar held via Zoom, Dr. Lee will provide his insights on the World Agricultural Supply and Demand Estimates (WASDE) crop report. “These early morning webinars will be a great way for Ohio farmers to learn more about the factors impacting the corn, soybean, and wheat markets” said David Marrison, Interim Director for OSU Extension’s Farm Financial Management and Policy Institute.  Producers are encouraged to bring their questions to this early morning conversation.

Click here for the program flyer 

There is no fee to attend this quarterly webinar session. Pre-registration can be made at go.osu.edu/coffeewithDrLee.

Additional sessions will be held on September 15, and November 17, 2023.

These webinars are sponsored by: OSU Extension, Farm Financial Management & Policy Institute (FFMPI), and the Department of Agricultural, Environmental and Development Economics (AEDE) all located in The Ohio State University College of Food, Agricultural, and Environmental Sciences (CFAES).

Will Price Volatility Continue in the World Wheat Market?  

By: Ian Sheldon, Professor and Andersons Chair of Agricultural Marketing, Trade, and Policy, Agricultural, Environmental, and Development Economics, Ohio State University and Chris Zoller, Associate Professor and Extension Educator, Agriculture & Natural Resources, Ohio State University Extension – Tuscarawas County

Wheat Price Volatility and Global Stocks

In a recent blog from the International Food Policy Research Institute (IFPRI), former USDA Chief Economist Joseph Glauber detailed the disruption that Russia’s invasion of Ukraine has had on the world wheat market over the past year (https://www.ifpri.org/blog/assessing-tight-global-wheat-stocks-and-their-role-price-volatility).  Compared to the recorded price spikes of 2007/08, 2010/11, and 2012/13, wheat futures prices remained relatively stable until Russia invaded Ukraine in February 2022 (see figure).

 

While world food prices have retreated significantly over the past 11 months (Bloomberg News, March 19, 2023), price volatility in the wheat market is likely to continue with tight global stocks.  When global supplies are negatively affected by an armed conflict such as Russia’s invasion of Ukraine, the availability of stocks should aid in moderating any impact on prices. However, if stocks are tight, their price-smoothing effect is limited, and volatility tends to be exacerbated.

 

 

Typically, market analysts measure the tightness of global stocks through the stock-to-use ratio (SUR), defined by ending stocks as a percentage of consumption, which is then multiplied by 365 days to give stocks as days of use.  The SUR for wheat can be measured in several ways: total global stocks, total global stocks minus China, and stocks held by the major exporters (US, EU, Argentina, Australia, Canada, Kazakhstan, Russia, and Ukraine).  If China is excluded from the calculation, projected stock levels for 2022/23 range from 58 to 26 days of use, the lowest level since 2007/08 (see figure).  Not surprisingly, the combination of low stocks, continued uncertainty about the war, and the potential for future supply shocks, means that concerns about global food security have not dissipated (World Bank Food Security Update, March 23, 2023).

Uncertainty Over Continuation of The Black Sea Grain Export Deal and Russian Exports

Key to reducing price volatility is continuation of the grain export deal signed by Ukraine, Turkey, Russia, and the United Nations (UN) on July 22, 2022 (USDA, Foreign Agricultural Service, Grain: World Markets and Trade, August 2022), which was then renewed last November for 120 days (Reuters, March 14, 2023).  Despite the UN and the Ukrainian and Turkish governments stating the deal had been extended for a further 120 days on March 18, 2023, the Russian foreign ministry indicated it had only agreed to a 60-day extension, and that it wanted to see an expansion of its own grain exports to the world market (Financial Times, March 18, 2023).

Not surprisingly, conflicting signals over the timeline of the deal’s extension affected the market, wheat futures rising by 2 percent before March 18 (Bloomberg News, March 14, 2023), falling back the week after the deal was announced, although market analysts expect a risk premium (Bloomberg News, March 20, 2023).  A similar pattern of price volatility occurred prior to and after the deal was renewed in November 2022 (Bloomberg News, November 2, 2022), and no doubt will happen again when the deal next comes up for renewal.

Despite the Ukrainian focus of the grain export deal, the sticking point for the Russians is how to increase their own grain exports.  Russia is now the world’s leading wheat exporter (Bloomberg News, March 31, 2023) (see figure), its strong harvest last year helping to reduce wheat futures prices (Bloomberg News, March 29, 2023).  While Russian crops are not subject to any explicit trade sanctions, companies that trade wheat and other grains must deal with restrictions on both Russian banks and state companies (Bloomberg News, March 29, 2023).  A recent development has been the announcement by major commodity traders Cargill and Viterra that they will stop exporting Russian grain as of July 1, 2023, with Archer-Daniels-Midland also considering exiting its Russian operations (Bloomberg News, March 31, 2023).  How this affects Russian exports to the world market remains to be seen, although some observers think little will change as local traders replace global traders, the Russian government continuing to collect grain export taxes (Bloomberg News, March 30, 2023).

Outlook for Wheat Price Volatility

Low global wheat stocks along with Russia’s repeated procrastination over the Black Sea grain export deal, suggest price volatility will continue for the foreseeable future.  At the same time, grain exports by Ukraine to central European states has affected farm revenues in Poland, Romania, Slovakia, Hungary and Bulgaria, eroding political goodwill (Bloomberg News, April 2, 2023), placing pressure on the European Union (EU) for tariffs to be restored on imports from Ukraine (Reuters, March 31, 2023), which would likely push down wheat and other grain prices.

Wheat on the Chicago Mercantile Exchange (CME) is currently hovering around $7.00 per bushel, in line with the estimate used in the OSU Extension Wheat Production Budget for 2023.  As of April 5, 2023, CME prices are $6.94/bushel for July 2023, $7.25/bushel for July 2024, and $7.26/bushel for July 2025.  The OSU Extension wheat budget estimates $7.00/bushel and evaluates four yield scenarios (59 bushels/acre, 74 bushels/acre, 89 bushels/acre, and 92 bushels/acre).  Estimated returns at each yield level more than cover the variable costs, but the numbers are negative when evaluating returns above total costs.  Straw sales can improve the returns, but there is the additional concern of the value of nutrients removed.

We encourage you to keep informed of market movements and projections, and utilize OSU Extension enterprise budgets (https://farmoffice.osu.edu/farm-management/enterprise-budgets) when making farm management decisions.

 

Farm On financial management course offers farmers, ranchers training to meet new program requirements

COLUMBUS, Ohio—A new online farm management course offered by The Ohio State University College of Food, Agricultural, and Environmental Sciences (CFAES) will help Ohio’s beginning farmers qualify for the requirements of the Ohio Department of Agriculture’s Beginning Farmer Tax Credit program.

Called Farm On, the self-paced, on-demand farm financial management course was created by Ohio State University Extension professionals and is offered through OSU Extension’s new Farm Financial Management and Policy Institute (FFMPI), said Eric Richer, assistant professor and OSU Extension field specialist in farm management.

OSU Extension is the outreach arm of CFAES.

“The Farm On financial management course was created to address the needs of Ohio’s new and beginning farmers who want to better prepare themselves to operate a commercial farm in Ohio and do that with a high level of economic stability while remaining profitable and responsible at every step along the way,” said Richer, who is the lead instructor for the Farm On course. “We believe Farm On will be a great deliverable to Ohio’s agriculture industry because it is on-demand, self-paced, and taught by Ohio State’s expert farm management instructor.”

What’s unique about the Farm On course is that, not only does it comply with the regulations of the new Ohio House Bill 95 Beginning Farmer Tax Credit program, it also meets the borrower training requirements for the U.S. Department of Agriculture Farm Service Agency’s Beginning Farmer and Rancher Loan Program, Richer said.

The Farm On course includes multiple video lessons, 10 quizzes, 10 exercises, individual and group consultations, and a 10-module course that covers the following topics:

  • Farm Business Planning
  • Balance Sheets
  • Income Statements
  • Cash Flow Projections
  • Calculating Cost of Production
  • Farm Record Keeping
  • Farm Taxes
  • Farm Financing
  • Risk Management
  • Farm Business Analysis

The Farm On course allows CFAES to serve the needs of farmers through OSU Extension and our FFMPI, said Cathann A. Kress, Ohio State vice president for agricultural administration and dean of CFAES.

“We are excited to partner with ODA and USDA-FSA to address the farm financial training that is required for running a farm business,” Kress said. “Currently, we are the only educational institution in Ohio with a course like ‘Farm On’ that qualifies for ODA’s Beginning Farmer Tax Credit program and FSA’s Borrower Training Requirements.

“As part of our land-grant mission, CFAES educates not just college students but over 2 million individuals across the lifespan.”

The Ohio House Bill 95 Beginning Farmer Tax Credit program went into effect in July 2022 and grants a 3.99% tax credit to landowners who sell or lease assets to a certified Ohio beginning farmer. The new law also allows an Ohio tax credit to the certified beginning farmer equal to the cost of the financial management course completed, Richer said. The Farm On course costs $300 per person.

“Ohio State’s Farm On course is a great way to help Ohio farmers qualify for ODA’s new Beginning Farmer Tax Credit program, which is an important tool to help current, beginning farmers and potential, future farmers do what they do best,” said ODA Director Brian Baldridge. “We are thankful for this partnership that is helping to keep Ohio’s hard-working farmers at the forefront.”

Ohio State’s Farm On course is now 1 of 5 approved vendors for borrowers in Ohio, said Darren Metzger, Ohio Farm Service Agency loan chief.

“The course is in-depth financial management training that can assist our borrowers to obtain and/or improve their knowledge in this critical area of farm management,” Metzger said.

The Farm On program is part of CFAES’ new FFMPI, which was created last year with the goal of sharing resource-based knowledge and best practices to help Ohio farmers manage their businesses as the agricultural industry changes and evolves. Housed within OSU Extension, the goal of FFMPI is for the integration, translation, and communication of CFAES’ farm management and ag policy presence that addresses critical farm management and policy issues affecting Ohioans.

“Farm On is meeting a need of today’s modern crop farmers, and it’s packaged in a way that respects the busy schedules of family farmers,” said Tadd Nicholson, executive director of Ohio Corn and Wheat. “It’s this type of tangible benefit that earns the support of Ohio’s corn and small grains checkoff funds. We are proud to partner with OSU Extension on this important new institute.”

Farm On, which is just one of the programs offered through the new FFMPI, isn’t just for new and beginning farmers, said Peggy Hall, CFAES agricultural and resource law specialist and a Farm On instructor.

“This course provides an opportunity for any farmer in Ohio, whether you’re a new farmer, a seasoned farmer, a small farmer, or a large farmer,” Hall said. “For a long time, we’ve needed to have this course in Ohio because farm management is so critical to ensuring the future of our farms.”

To sign up for Farm On, go to go.osu.edu/farmon.

 

Writer(s):

Tracy Turner
turner.490@osu.edu
614-688-1067

Source(s):

Eric Richer
richer.5@osu.edu

Peggy Hall
hall.673@osu.edu

Darren Metzger
darren.metzger@usda.gov

Sarah Huffman
BeginningFarmer@agri.ohio.gov

Tadd Nicholson
tnicholson@ohiocornandwheat.org

Trends in Ohio Government Payments During the COVID-19 pandemic

By: PhD student Rabail Chandio and Professor Ani Katchova, Farm Income Enhancement Chair, in the Department of Agricultural, Environmental, and Development Economics (AEDE), OSU, Anil Giri, Research Agricultural Economist and Dipak Subedi, Agricultural Economist at the Economic Research Service, USDA, and Nick Paulson, Professor and Gardener Hinderliter Professor in Farm Management in the Department of Agricultural and Consumer Economics at the University of Illinois, Urbana-Champaign.

In 2021, net cash income for the US and Ohio farms were higher than the 21-year average. As expected, a major component of farm income was the government payments for various support programs, including the coronavirus pandemic support. This report provides details on how government payments evolved for farmers in Ohio and the US in the recent past after a record high in 2020.

USDA – Economic Research Service data released on Feb. 7, 2023, show Ohio producers had a record high net cash income of $4.65 billion in 2021 coming from a gross cash income of $13.63 billion in inflation-adjusted 2023 dollars. In inflation adjusted dollars, both the net and gross cash incomes were higher than the 21-year averages of $3.1 billion and $11.5 billion, respectively. Net cash farm income encompasses gross cash farm income (cash receipts from farming as well as farm-related income and government payments) minus cash expenses. It does not include noncash items—including changes in inventories, economic depreciation, and gross imputed rental income of operator dwellings—reflected in the net farm income measure. Therefore, a major contributor to the high net and gross cash incomes in 2020 and 2021 was not only high commodity prices leading to higher cash receipts but also the record high government payments.

At the onset of the pandemic, the supply chain disruptions and uncertainty in the market signaled lower incomes and uncertain prices, creating the need for higher PLC and ARC payments to farmers in addition to COVID-support payments. As commodity prices rallied beginning in August 2020, the PLC and ARC programs triggered lower levels of total support in 2021. Moreover, adhoc disaster assistance payments remained the largest component of government payments in 2021. As the US agricultural sector entered a period of higher income with higher commodity prices, ARC and PLC program payments are expected to be lower for 2022.

Link to the report: https://aede.osu.edu/sites/aede/files/publication_files/OhioGovernmentPayments2023.pdf

 

 

USDA to Aid Distressed Farmers Facing Financial Risk

by: Chris Zoller, Extension Educator, ANR in Tuscarawas County

Beginning in April, USDA will provide approximately $123 million in additional, automatic financial assistance for qualifying farm loan program borrowers who are facing financial risk.  Funding is through the Inflation Reduction Act (IRA) and builds on the same program announced in October 2022.

Like the program announced in October 2022, qualifying borrowers will receive an individual letter detailing the assistance as payments are made. Distressed borrowers’ eligibility for these new categories of automatic payments will be determined based on their present circumstances. More information about the new categories that make up the $123 million in assistance and the specific amount of assistance a distressed borrower receives can be found in this fact sheet, IRA Section 22006: Additional Automatic Payments, Improved Procedures, and Policy Recommendations.

USDA will provide information and training to program participants about the potential tax consequences of the funding program.  USDA will also sponsor a webinar featuring farm tax experts to review the program and answer questions.  Further information about tax implications of USDA program is available here: farmers.gov/taxes.

If you have further questions, please reach out to your local USDA Farm Service Agency office.  If you are unsure where of the location of the nearest office, please use this tool: https://offices.sc.egov.usda.gov/locator/app.