REFLECTIONS AND CONTENT: JANUARY USDA GRAIN REPORTS

USDA released a key set of reports on January 12: final production of 2010 crops, stocks of grains on December 1, 2010, acres of winter wheat seeded for 2011, and January World Agriculture Supply and Demand Estimates (WASDE). The reports were viewed as bullish, especially for corn and soybeans. Click on the following link to access the entire paper:

http://aede.osu.edu/programs/outlook/zulauf/Jan-2011DemandSupplyNewsletter-ZulaufAyers.pdf

Estimated ACRE Coverage Levels for 2011

Click here to read a PDF version of this article (includes tables)

Farmers are now into the third year of the 2008 Farm Bill programs. The ability to elect into the Average Crop Revenue Election (ACRE) or to remain in the Direct and Counter Cyclical Program (DCP) will close on June 1, 2011 for this program year. Farmers not currently enrolled in ACRE have until June 1, 2011 to decide if ACRE or DCP might be the better decision for this crop year. However, once a farm has elected ACRE it cannot be switched back to DCP.

The guarantee price for 2011 will be the two year average U.S. cash price from the marketing years for the 2009 and 2010 crops. Using the 2009 actual prices plus the USDA estimated price (from January 12, 2011) for the 2010 crops, the 2011 ACRE price guarantee can be calculated as shown in Table 1 of the attached article. As prices continue to change during the marketing year the 2011 ACRE price guarantee will also change. In the last column of the table, the 2011 ACRE price guarantee is listed.

Since ACRE is a revenue protection program, price is only half of the equation in determining the 2011 ACRE revenue guarantee. The second half of the equation is the five year Olympic average yield for each crop respectively. In Table 2 in the aticle, the new five year Olympic average for 2011 is calculated for each crop. Even thought the final numbers for the 2010 crop might vary slightly from the estimates, it will not affect the outcome significantly.

The estimated 2011 Ohio ACRE revenue guarantee is calculated by multiplying the Ohio Olympic average yield times the U.S. average cash price times the 90% coverage level provided by ACRE. There was also a provision in the 2008 Farm Bill that established a limit on how much the revenue guarantee could change once the program started. This 10% cup and cap based off of the 2010 revenue guarantee sets a floor and ceiling for the 2011 revenue guarantee. The 10% cup and cap come into effect for all three major crops in Ohio if these forecasted numbers hold for the 2011 crop year. The Ohio ACRE revenue guarantee would be $570 for corn, $448 for soybeans and $325 for wheat, which is different than the calculated values. (see Table 3)

Table 4 in the article provides some insight into whether or not enrolling in ACRE in 2011 would be a good decision. If the Ohio crop yields in 2011 are equal to the 5 year Olympic average, the 2011 average U.S. market price (from 9/1/2011 through 8/31/2012) would need to be below $3.63 before an ACRE payment would be made. However, if crop yield are better the price would need to be lower before a payment is made and the opposite is true if yield are lower. Under this example if the Ohio average yield and U.S. average market price would trigger a payment, individual farm revenue would also need to be below the farm’s 2011 revenue guarantee before any payment would be received.

In examining the current future market prices relative to the U.S. average cash price needed to trigger an ACRE payment, it does not appear that ACRE will be beneficial in 2011. However, with that said the markets are fickle and can move quickly and unexpectedly at times. The ACRE payment is based on the average U.S. market price from harvest 2011 until harvest 2012, not what a farmer receives for his crop. Although the markets look good today, you have no downside risk protection if they decide to decrease significantly. The ~$4.00 per acre cost to enroll might still be a good risk reduction strategy for some operations. Remember, even if you decide to sign up for ACRE, it is not a substitute for crop insurance since it depends on low state revenue to trigger. ACRE will not cover localized crop failures in the same fashion that crop insurance does.

Ohio Grape and Wine Conference Returns This Year: To Be Held Feb. 21-22 in Columbus

Designed for both new and established grape growers and winemakers, the 2011 Ohio Grape and Wine Conference will be held Feb. 21-22 at the Nationwide and Ohio Farm Bureau 4-H Center on Ohio State University’s Columbus campus.

Registration at the discounted rate is available until Feb. 4. Details, full schedule and a registration form can be found at http://go.osu.edu/BsD.

Jointly organized by the Ohio Grape Industries Committee (OGIC) and Ohio State’s Viticulture and Enology Program, the conference consists of both general and concurrent sessions covering a wide range of timely topics for people involved in the grape and wine industry and those seeking to join this growing sector of Ohio’s agriculture.

Ohio State specialists will present information on a variety of research trials in viticulture, plant pathology, entomology, weed science and enology. A special workshop has also been developed to address the critical needs of the increasing number of new growers and wineries in Ohio today. Additionally, an expanded two-day trade show with both vineyard and winery equipment and services will be featured this year.

Conference participants can also qualify for five pesticide recertification credits (one core and four commercial 2B, which also apply for Private 3P).

The Nationwide and Ohio Farm Bureau 4-H Center is located at 2201 Fred Taylor Dr., Columbus, Ohio, just off the Lane Ave. exit at State Route 315 South.

Cover Crops and Crops Insurance 2011 Rule Changes

Last October, I wrote an article on the effect of cover crops and crops insurance (see http://ohioagmanager.osu.edu/farm-policy/is-planting-cover-crops-affecting-my-crop-insurance-coverage). New rules have been put in place to make it easier to insure spring planted crops following cover crops. Producers can now submit a request for actuarial change for a crop following a cover crop (referred to as a FCC practice). The FCC practice is defined as, “planting the insurable crop after a crop planted as a cover crop has reached the headed or budded stage and/or that has been harvested on the same acreage in the same calendar year.”

Previously the cover crop had to be destroyed prior to budding or heading, in order to insure the spring planted crop. Since the weather and field conditions may not always allow for the destruction of the cover crop prior to heading or budding, the new rules state the crop must be destroyed prior to May 15th and a written request for actuarial change must be filed with the insurance agent no later than July 15th although making the request as early as possible is recommended. If the cover crop is destroyed prior to heading or budding, no written request is required.

With the FCC practice, there is no increase in insurance premiums or decrease in insurable crop yields compared to the not following another crop (NFAC) practice. However, farmers will be required to keep yield data from the FFC practice fields separate from their traditional practices. This data will create a data base to see if actuarial tables should be different for FCC practices in the future.

If the cover crop is destroyed after May 15th the spring planted crop would become ineligible for insurance coverage. For more information see http://www.rma.usda.gov/fields/il_rso/2011/covercrops.pdf

Northern Ohio New & Small Farm College

Ohio State Extension educators in the Erie Basin and Maumee Valley EERAs are working together to offer a workshop for new and aspiring farms, the Northern Ohio New & Small Farm College. This workshop will focus on topics related to profitable and alternative agriculture for small acreages and adding new enterprises to existing farm operations.

Sessions will be held once a week for four weeks during the month of March. Each session will run from 6:30 pm until 9:00 pm. This workshop will be held at two locations, one in each EERA. The Putnam County Extension office in Ottawa, Ohio will be the site on Mondays, March 7, 14, 21 & 28. EHOVE Career Center in Milan, Ohio will be the site on Tuesdays, March 8, 15, 22, & 29. The same program is offered at each site.

The topics taught at each site will include: developing real-life expectations for your farm, as well as a business plan for your operation, selecting agricultural enterprises, developing budgets, marketing your product through direct marketing tools, and resources that are available.

Cost is $50 with each additional registrant from the family or operation at $30. Participants will receive 10 hours of classroom instruction, a resource notebook (1 per family), connections to people and resources who will provide insight to helping you grow your idea into a business, and light refreshments. Registration deadline is March 1, 2011.

To register contact Alan Sundermeier at- telephone 419-354-9050 or e-mail sundermeier.5@osu.edu. More information about this program is available at http://wood.osu.edu

Small Farmer Conferences to be held in March

Ohio State University Extension will host two conferences in March dedicated to small farm landowners.

The first conference is the third annual “Opening Doors to Success” Small Farm Conference and Trade Show to be held March 11-12 at Wilmington College in Wilmington, Ohio. The conference will feature 38 breakout sessions and a trade show for small farmers.

The conference kicks off on Friday, March 11 at 5:30 p.m. with a session, “Get Ready – Get Set – Get Market Ready” – an evening dedicated to investigating opportunities for marketing beyond the farm gate.

Saturday , March 12 will feature over 35 breakout sessions offered throughout the day and will cover a variety of topics that will include such examples as: Growing Grapes/Making Wine; Agritourism; Bee Keeping; Poultry Production; Biosecurity for Livestock; Berry Production; Equipment Needs; Food Preservation; Food Safety; Cherry Production; Agricultural Law Considerations; Insurance Issues; Pumpkin, Sweet Corn and Tomato Production; Alternative Energy Sources; Meat Marketing, Pasture and Hay Production; Local Foods; Social Media Marketing; Financial Management; Organic Dairy: Livestock Production; Grants and Loans and so much more.

The program is co-sponsored by OSU Extension Small Farm Program; Wilmington College; Farm Credit Services of Mid-America; and the U.S. Department of Agriculture offices of the Farm Service Agency, Natural Resources Conservation Service, National Agriculture Statistic Service and Rural Development.

Registration is $20 on March 11, $50 on March 12 or $60 for both days. Registration deadline is March 4. For more information, log on to: http://clinton.osu.edu, or contact OSU Extension educator Tony Nye at nye.1@osu.edu or 937-382-0901.

The second annual “Living Your Small Farm Dream” Northeast Ohio Small Farm Conference and Trade Show will be held on March 26 at the R.G. Drage Career Center from 8:30 a.m. until 4 p.m. in Massillon, Ohio.

The conference will begin with a Keynote addresses, “Using Social Media to Reach Customers and Market Your Product” followed by 23 breakout sessions attendees can pick and choose from.

Examples of Breakout sessions at this conference will include: Aquaculture; Selling Your Products Retail; Agritourism; Beekeeping; Oil & Gas; High Tunnel Cost – Share Programs; Berry Production; Developing a CSA; Soils And Fertility; Alternative Energy for Small Farms; Food Safety; Grants for New and Small Farms; Meat Goat and Rabbit Production and Marketing; Leasing Land; Government Programs for New and Small Farms and much more.

This program is co-sponsored by OSU Extension Small Farm Program; Farm Credit Services of Mid-America; and the U.S. Department of Agriculture offices of the Farm Service Agency, Natural Resources Conservation Service, National Agriculture Statistic Service and Rural Development.

Registration is $50 per person. Registration deadline is March 18. For more information log on to: http://jefferson.osu.edu , http://clinton.osu.edu , or contact OSU Extension educator Mike Hogan at hogan.1@osu.edu or 330-324-6341.

Ohio State University Extension Can Help You Prepare for 2011

I can remember back several years ago on the first day of a junior high school math class. The teacher gave each student a piece of wood about the size and shape of a quarter. On each side of this wooden piece were the words to and it. He explained that he didn’t like hearing his students and others use the phrase, “I’ll do (you fill in the blank) when I get around to it.” So to solve this problem he gave each of us a “round to-it.” We’ve all used this phrase in our family and business settings because it’s easy to say and do. The start of a new year is often a good time to do those things you’ve been putting off and Ohio State University Extension has a number of resources to help get you moving.

Tax Guides
It’s that time of year to figure your income, expenses, and tax liabilities for the year. IRS Publication 225 Farmers Tax Guide is an excellent reference. It provides helpful information about filing taxes and updates about changes in tax laws that may impact you. Copies of this publication are available by contacting your local OSU Extension office.

Farm Records
Whether you use a paper or the Quicken software program to maintain your financial records, OSU Extension has resources to assist you. Several farmers have been in the office recently picking up new forms for the Ohio Commercial Account Book. Some have moved to a computerized software system. If you are thinking of trying Quicken, OSU Extension has developed a comprehensive manual to get you started. A word of advice, regardless of the system you use, don’t tell your wife the receipts for the year are in a bag when she expected you to be entering transactions throughout the year! Farm records are unpleasant enough for many and there is no reason to increase your odds of a divorce.

Performance Trials
Each year Ohio State University Extension conducts performance trials at various locations throughout Ohio. Research plots are planted, harvested, and evaluated to assist farmers with making decisions about which varieties to plant based on a variety of factors. The results are published in a comprehensive guide that is available from your local Extension office. Performance trials are conducted for corn, soybeans, and forages.

Web Resources
Ohio State University Extension has a tremendous amount of research based resources available on the Internet. Visit www.ohioline.osu.edu to access bulletins and fact sheets on a number of topics. For information and resources for dairy, go to www.dairy.osu.edu where you will find information about production, management, herd health, and much more. You can also access a monthly newsletter with timely dairy information. If you are looking for information about crop production you will want to check out the Crop Observation and Recommendation Network (C.O.R.N.) at www.corn.osu.edu. The CORN newsletter is published electronically once each week during the growing season and once a month in the off season. It is an excellent and timely resource to keep track of growing conditions and recommendations on weed, insect, and disease problems. Peggy Hall, OSU Extension Legal Educator, also maintains a web site with timely information about legal topics of importance to agriculture. You can access the site at http://ohioaglaw.wordpress.com/.

If you do not have access to the web but would like information from these resources, please contact your local Extension office. In many cases, copies of newsletters can be mailed to you.

Financial Analysis
OSU Extension has several educators across Ohio trained in using the FINPACK software program housed at the University of Minnesota. FINPACK is a comprehensive software program that allows you to analyze your present performance and evaluate the impact of proposed changes to your farm business. Contact your local Extension office for more information.

Your Will
A Will is the most basic of any farm transition planning tool and is probably one of those things many put off until they get around to it. Have you developed one? If so, when was it last updated? For those who have developed one, in many cases, it was developed when their children were young and has never been changed. Now their children are grown and have families of their own. Spend some time with an attorney either to develop a Will or update the one you have.

There is a lot that goes into the day-to-day management of a farm today. It’s easy to get wrapped up in the fires that flare up and put off doing some planning for your business. Consider this your “around to-it” and have a profitable 2011.