Farm Fuel Storage Compliance Date Approaching

By: Amanda Douridas, Extension Educator

On May 10, 2013 farms must have prepared and implemented their Spill Prevention, Control and Countermeasure (SPCC) Plans if they fall under regulation by the EPA. Farms with 1,320 gallons above ground storage or 42,000 gallons below ground storage of oil or oil products meet the requirements to have a SPCC. This includes all containers 55 gallons or greater. The implementation date was delayed from its original date in the fall of 2011.

Two basic requirements need to be met to comply. The first is having sufficient secondary containment for storage and transfer areas to contain any spillage. The containment area is designed to prevent discharge until cleanup can occur and is usually designed to hold 110 percent of the largest container or tank in the area. The second requirement is to prepare and implement a written SPCC plan that covers all of the steps the farm has taken to prevent discharges into the environment. The plan must be updated every 5 years or in the event of a major re-design of the area. Any employees handling oil and petroleum products must be trained on what the plan involves.

Some farms may need to have their plan approved by a Professional Engineer. If on farm storage is between 1,320 and 10,000 gallons, you are allowed to prepare and self-certify if you have not had any spills of 1,000 gallons or more at once or less than two discharges of more than 42 gallons in the last year. Also, if secondary containment is not practical or alternative methods of diking or secondary containment are to be used, a Professional Engineer will need to certify.

On completion the plan must be kept on site. It does not need to be sent to EPA but may be requested if a major discharge event occurs. More in-depth information on creating a plan for farms can be found at the SPCC for Agriculture page on the EPA site: http://www.epa.gov/emergencies/content/spcc/spcc_ag.htm#spcc. This fact sheet also provides a good overview: http://www.epa.ohio.gov/portals/41/sb/publications/spcc.pdf.  Additionally more information can be found in a previous OAM article located at  http://ohioagmanager.osu.edu/uncategorized/fuel-storage-containment-required

A Landowners Guide to Understanding Recommended Pipeline Standards and Construction Specifications

By: Chris Zoller, Extension Educator, ANR, and Peggy Hall, Director, Agricultural & Resource Law, Ohio State University Extension

 With the drilling of gas wells comes the need to establish pipelines to move the gas from the point of drilling to the end users.  Landowners across Ohio are being asked to sign agreements allowing companies to purchase acreage for pipeline construction.  A new fact sheet provides landowners with an overview of items to consider regarding standards and construction specifications related to pipelines. This fact sheet is intended for educational purposes only.  We strongly encourage landowners who may be considering negotiating a pipeline easement to consult with an attorney familiar with such negotiations. Download the factsheet by clicking A Landowners Guide to Understanding Recommended Standards and Construction of Pipeline Standards 2012 2012.

Considerations When Evaluating a Pipeline Easement Agreement

By: Chris Zoller, Extension Educator, ANR; Peggy Hall, Director, Agriculture & Resource Law Program; and  Mark Landefeld, Extension Educator, ANR 

Ownership of a piece of property may best be described as a “bundle of rights.” These rights include the right to occupy, use, lease, sell, and develop the land. An easement involves the exchange of one or more of these rights from the landowner to someone who does not own the land. Easements have been used for years to provide governments, utilities, and extractive industries with certain property rights. An easement permits the holder certain rights regarding the land for specified purposes while the ownership of the land remains with the private property owner.  The property owner retains ownership of the land and is responsible for any and all taxes due.  The easement agreement should be filed with the county recorder where the property exists. To read more download the pdf of the new factsheet titled Considerations When Evaluating a Pipeline Easement Agreement.

2013 Ohio Enterprise Budgets

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

Budgeting helps guide you through your decision making process as you attempt to commit resources to the most profitable enterprises on the farm. Crops or Livestock? Corn, Soybeans, Wheat, Hay? We can begin to answer these questions with well thought out budgets that include all revenue and costs. Without some form of budgeting and some method to track your enterprises’ progress you’ll have difficulty determining your most profitable enterprise(s) and if you’ve met your goals for the farm.

Budgeting is often described as “penciling it out” before committing resources to a plan. Ohio State University Extension has had a long history of developing “Enterprise Budgets” that can be used as a starting point for producers in their budgeting process.

Newly updated Enterprise Budgets for 2013 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

Enterprise Budget projections updated for 2013 include: Corn-Conservation Tillage; Soybeans-No-Till (Roundup Ready); Wheat-Conservation Tillage, (Grain & Straw); Alfalfa Hay; Alfalfa Haylage; Grass Hay, Swine-Farrow to Wean; Swine- Wean to Finish.

Our enterprise budgets are economic budgets. This means that, in addition to cash expenses and depreciation, opportunity costs of land, labor, management and capital are included. By including these costs we are able to estimate an economic profit which is different from an accounting profit. By including opportunity costs of labor and management in an economic enterprise budget, the user can determine whether the enterprise is economically viable in the time-frame being considered.

Using current input costs for Ohio row crops we find that the break-even price for corn to be between $4.98 and $5.31 per bushel (assuming 158 or 190 bushel production potential).

Using current input costs for Ohio soybean we find that the break-even price to be between $11.73 and $12.47 per bushel (assuming  or 46 or 55 bushel production potential).

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. These Enterprise Budgets have color coded cells that allow users to plug in numbers to easily calculate bottoms lines for different scenarios. Detailed footnotes are included to help explain methodologies used to obtain the budget numbers. Budgets include a date in the upper right hand corner of the front page indicating when the last update occurred.

Farm Management Decision Tools to Assist With Lease Planning

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

There are a variety of tools available to assist you as a farm manager or landowner in the task of developing a flexible cash lease or crop share lease. These tools have been developed through Ohio State University Extension and the Department of Agricultural Environmental and Development Economics at the Ohio State University. These tools are downloadable Excel spreadsheets that can be used to evaluate changes to lease amounts depending on changing lease parameters. These tools are available online at: http://aede.osu.edu/programs-and-research/osu-farm-management/decision-tools

The following are descriptions of the each tools.

 

Flexible Cash Lease Calculator – Cash Lease with a Bonus Approach

This flexible cash lease tool is intended to help landowners and tenants agree on terms of their flexible cash lease. This Flexible Cash Lease Calculator can assist users in developing a flexible cash rent model.

The flexible cash rent approach used in this calculator allows users to compare actual prices, yields and gross income to base prices, yields and gross revenue. The difference between the base and actual gross revenues can be shared in some proportion between landowner and operator and added to the base cash rent.

The Microsoft Excel spreadsheet is designed to enable the user to input base and year end prices, yields and proportional split to formulate a flex rental amount at the end of the lease year.

 

Flexible Cash Lease Calculator – Net Return Approach

This flexible cash lease tool is intended to help landowners and tenants agree on terms of their flexible cash lease. This Flexible Cash Lease Calculator can assist users in developing a flexible cash rent model. Unlike other flexible cash lease calculators, this tool allows the user to incorporate flexible parameters for input costs as well as for price and yield.

The flexible cash rent approach used in this calculator allows users to calculate actual net income for rented land and compare it against a base net income. The difference between the base and actual net revenues can be shared in some proportion between landowner and operator and added to the base cash rent.

The Microsoft Excel spreadsheet is designed to enable the user to input base and year end prices, yields and costs to formulate a flex rental amount at the end of the lease year.

 

Flexible Cash Lease Calculator – Ratio Approach

This flexible cash lease tool is intended to help landowners and tenants agree on terms of their flexible cash lease. This Flexible Cash Lease Calculator can assist users in developing a flexible cash rent model. Unlike other flexible cash lease calculators, this tool allows the user to incorporate flexible parameters for input costs as well as for price and yield.

The flexible cash rent approach used in this calculator is to multiply the base rent by: 1) the ratio of the Year End Price to Base Price, 2) the ratio of the Year End Yield to Base Yield and, 3) the ratio of the Base Input Costs to Year End Input Costs.

The Microsoft Excel spreadsheet is designed to enable the user to input base and year end prices, yields and costs to formulate a flex rent at the end of the lease year. There are two tabs for this calculator. Page 1 contains the Flexible Cash Lease Inputs and page 2 contains the Flexible Cash Lease Output.

 

Crop Share Calculator

The Crop-Share Lease Calculator is a tool designed to allow the user to input costs and shares of each to fairly allocate revenue in a crop share lease arrangement. This tool shows the tenant and landowner returns above total costs given share percentages and costs. This decision aid contains three sections:

Shares

This section separates various receipt and cost sections out so that the user can input the share percentage of that particular item.  Simply input the percentage that the landowner is responsible for and the tenant percentage is automatically generated.

Costs

This section allows the user to input the costs and receipts for the particular crops.

Output

This section separates the sections into 4 broad categories (Receipts, Inputs, Machinery, and Direct Costs) and breaks them down to show the amount (based on the percentages inputted in section 1) that the landowner and the tenant are responsible for.  At the bottom of the sheet, it will show the return to total costs based on the numbers provided.