Farm Office Live provides the latest outlook and updates on ag law, farm management, ag economics, farm business analysis, and other issues dealt with in your farm office. Targeted to farmers and agri-business stakeholders, our specialists digest the latest news and information and present it in an easy-to-understand format.
The Ohio State University Extension is pleased to announce the Regional Ag Outlook and Policy Meetings for 2022. Meetings will be held around the state beginning the last of January and ending in March.
Speakers will address a myriad of topics of agriculture interest here in Ohio as well as across the Corn Belt. Programs will include presentations on Grain Market Outlook, Ag Law Updates, Dairy Industry 2022, Ohio’s Changing Climate, Farm Policy, and Farm Bill, SB 52: Utility Solar Legislative, Farm Real Estate, and Cash Rent Trends, Ag Input Price Projections, and Federal Tax Updates.
New to this year’s program is the statewide sponsorship and support of the Ohio Corn and Wheat Growers Association.
“We are proud to partner with Ohio State University Extension educators across the state to support this year’s agronomy, outlook, and grower meetings. We value this partnership and look forward to supporting programs that bring value to our member’s farm businesses”, according to Brad Moffitt, Director of Membership and Market Development for the Ohio Corn and Wheat Growers Association.
The following table lists the scheduled Outlook programs with contact information to register. Continue reading →
Join OSU Extension at the Allen County Fairgrounds, in Lima, Ohio, on Tuesday, February 8, 2022, starting at 9:00 a.m. for the Allen County Ag Outlook and Agronomy Day. The morning session will focus on commodity market outlook and ag policy. In the afternoon you will find answers to your agronomy questions, obtain pesticide applicator and fertilizer recertification credits, and CCA education hours as you prepare for the next growing season. The program will wrap up at 3:30 p.m.
Please RSVP by January 31, 2022, by contacting OSU Extension Allen County at 419-879-9108 or email Clint Schroeder at email@example.com. The event will be held in the Youth Activities Building on the Allen County Fairgrounds, 2750 Harding Highway, Lima, OH 45804.
Doors open at 8:30 a.m; event starts at 9 a.m. Pre-registration by 1/31/2022 is required and the $15 admission can be paid at the door. The registration fee covers coffee and rolls, lunch, information packet, and education credits.
By: Gary Schnitkey, Nick Paulson, and Krista Swanson – Department of Agricultural and Consumer Economics – the University of Illinois and Carl Zulauf – Department of Agricultural, Environmental and Development Economics – Ohio State University
Farmers will again have until March 15 to make commodity title program selections. Given the current high prices, commodity title payments are not expected from any program option for the 2022 marketing year. If a change in conditions resulted in payments, those would be received in October 2023, after the close of the 2022 marketing year. Farmers wishing to purchase the Supplemental Coverage Option (SCO) crop insurance policy must select Price Loss Coverage (PLC) as the commodity title choice. Based on current price projections, Agriculture Risk Coverage at the county level (ARC-CO) will maximize the chance of payment for soybeans, although that chance will be small. The probability of payments is roughly the same for corn and soybeans.
Farmers have three program options when making their election decisions.
Price Loss Coverage (PLC) is a crop-specific fixed price support program that triggers payments if the marketing year average (MYA) price falls below the commodity’s effective reference price. Payments are made on 85% of historical base acres.
Agricultural Risk Coverage at the county level (ARC-CO) is a crop-specific county revenue program. ARC-CO triggers payments if actual revenue (MYA price times county yield) falls below 86% of the benchmark revenue (product of benchmark price and trend-adjusted historical yield for the county). Payments are made on 85% of historical base acres.
Agricultural Risk Coverage at the individual level (ARC-IC) is a farm-level revenue support program. Like ARC-CO, payments are triggered if actual revenue falls below 86% of the benchmark. If an FSA farm unit is enrolled in ARC-IC, information for all commodities planted in 2022 are combined together in a weighted average to determine benchmark and actual revenues. If a farmer enrolls multiple FSA farms in the same state, all farm units are combined in determining the averages for actual and benchmark revenues. Payments are made on 65% of historical base acres.
Decisions are made for each FSA farm unit. PLC and ARC-CO are commodity-specific and can be mixed and matched on the same FSA farm or across different FSA farms (i.e. PLC for one commodity, ARC-CO for another on the same FSA farm, or using different programs for the same crop on different FSA farms).
The following sub-section will discuss the PLC and ARC-CO decision for corn, soybeans, and wheat in 2022. This focus is taken as most individuals choose between PLC and ARC-CO. Not many farms are enrolled in ARC-IC. Even if enrolling in ARC-IC, having some understanding of the PLC and ARC-CO alternatives will be valuable in making decisions. Continue reading →
Is it time to review your farmland leasing situation? OSU’s Farm Office team will provide helpful leasing resources in its Ohio Farmland Leasing Update webinar on February 9, 2022, from 7 to 9 p.m.
“Winter is a good time to review farm leases, and current information is critical to that process,” said Barry Ward, Leader of Production Business Management for OSU Extension. “We’ll provide the latest economic and legal information relevant to farmland leasing in Ohio.” Continue reading →
OSU Extension Announces Two-Day Tax Schools for Tax Practitioners & Agricultural & Natural Resources Income Tax Issues Webinar
Barry Ward & Julie Strawser, OSU Income Tax Schools
Dealing with the tax provisions of the COVID-related legislation for both individuals and businesses are among the topics to be discussed during the upcoming Tax School workshop series offered throughout Ohio in November and December.
“The annual series is designed to help tax preparers learn about federal tax law changes and updates for this year as well as learn more about issues they may encounter when filing individual and small business 2021 tax returns,” said Barry Ward, Director of the Ohio State University Income Tax School Program.
“The tax schools are intermediate-level courses that focus on interpreting tax regulations and changes in tax laws to help tax preparers, accountants, financial planners, and attorneys advise their clients,” he said. The schools offer continuing education credit for certified public accountants, enrolled agents, attorneys, annual filing season preparers, and certified financial planners. Continue reading →
Monday marked the effective date for new laws in Ohio addressing utility-scale solar and wind facilities. As a result of Senate Bill 52, the new laws expand local involvement in the siting and approval of these facilities, as follows:
County commissioners may designate “restricted areas” where such facilities may not locate.
County citizens may petition for a referendum to approve or reject restricted area designations.
Developers must hold a public meeting overviewing a proposed facility in the county where it would locate.
County commissioners may prohibit or limit a proposed wind or solar facility after learning of it at the public meeting.
County and township representatives must sit on the Ohio Power Siting Board committee that reviews facility applications.
The new laws also require wind and solar developers to submit decommissioning plans and performance bonds to address the removal of a facility at the end of its lifetime.
To help explain the laws, Eric Romich and I have developed the law bulletins and videos you see below. We also have a podcast that Amanda Douridas and Elizabeth Hawkins recorded with us. You’ll find all resources on the Farm Office website at go.osu.edu/energylaw. Also on that page are the Farmland Owner’s Guide to Solar Leasing and our Solar Leasing Checklist.
WASHINGTON, June 1, 2021 – Agricultural producers who have coverage under most crop insurance policies are eligible for a premium benefit from the U.S. Department of Agriculture (USDA) if they planted cover crops during this crop year. The Pandemic Cover Crop Program (PCCP), offered nationally by USDA’s Risk Management Agency (RMA), helps farmers maintain their cover crop systems, despite the financial challenges posed by the pandemic.
The PCCP is part of USDA’s Pandemic Assistance for Producers initiative, a bundle of programs to bring financial assistance to farmers, ranchers, and producers who felt the impact of COVID-19 market disruptions.
“Cultivating cover crops requires a sustained, long-term investment, and the economic challenges of the pandemic made it financially challenging for many producers to maintain cover crop systems,” said RMA Acting Administrator Richard Flournoy. “Producers use cover crops to improve soil health and gain other agronomic benefits, and this program will reduce producers’ overall premium bill to help ensure producers can continue this climates-smart agricultural practice.” Continue reading →
Farms and financing–that’s a common combination in agriculture. Because farm operators often use financing arrangements to fund the capital-intensive nature of farming, we created the Financing the Farm law bulletin series. The series aims to help operators, especially new and beginning farmers, understand the legal workings of farm financing arrangements.
We’ve just added two new bulletins to the Financing the Farm series. “Personal Guarantees and Agricultural Loans” address the legalities of a personal guarantee–a personal promise made by a third party to pay the loan if the borrower fails to do so. We explain when lenders might require a personal guarantee for a loan, how a personal guarantee works, and issues and implications for entering into this type of agreement. Continue reading →
Hopefully, Ohio’s planting season will soon be as busy as its legislative season. There’s a lot of activity down at the capitol these days, with many bills on the move. Here’s a summary of bills that could impact agriculture and rural communities. Note that the summary doesn’t include the budget bill, which we’ll address in a separate article.
Water quality bonds. A joint resolution recently offered in the Senate supports amending Ohio’s Constitution to create permanent funds for clean water improvements. S.J.R. 2, a bipartisan proposal from Theresa Gavarone (R-Bowling Green) and Kenny Yuko (D-Richmond Hts.) would place a ballot issue before voters in November. The issue proposes amending the Constitution to allow for the issuance of general obligation bonds to fund clean water improvements. Up to $1 billion over 10 years would be permissible, with no more than $100 million allocated in any fiscal year. Bond funds would create a permanent source of funding for the H2Ohio program, which is now dependent upon the state budget process.
President Biden announced a major goal this week–for the U.S. to reduce greenhouse gas emissions by half over the next decade as compared to 2005 levels. Agriculture will play a key role in that reduction by “deploying cutting-edge tools to make the soil of our heartland the next frontier in carbon innovation,” according to President Biden. Several bills introduced in Congress recently could help agriculture fulfill that key role. The proposals offer incentives and assistance for farmers, ranchers, and forest owners to engage in carbon sequestration practices.
Here’s a summary of the bills that are receiving the most attention.
Growing Climate Solutions Act, S. 1251. The Senate Agriculture, Nutrition and Forestry Committee passed S. 1251 today. The bipartisan proposal led by sponsors Sen. Mike Braun (R-IN), Sen. Debbie Stabenow (D-MI), Sen. Lindsey Graham (R-SC), and Sen. Sheldon Whitehouse (D-RI) already has the backing of over half of the Senate as co-sponsors, including Ohio’s Sen. Sherrod Brown. The bill has come up in prior sessions of Congress without success, but the sponsors significantly reworked the bill and reintroduced it this week. The new version includes these provisions: Continue reading →
by: Chris Zoller, Extension Educator, ANR, Tuscarawas County
Liquidity is the ability of a farm business to quickly convert current assets to cash to pay short-term (less than 12 months) cash obligations, debt, family living, and taxes. It is one of several measures used to gauge farm financial performance over time. The United States Department of Agriculture Economic Research Service (USDA-ERS) is forecasting a decline in farm sector liquidity in 2021. This article will discuss working capital, current ratio, and times interest earned ratio financial measures.
Working capital is calculated by subtracting current liabilities from current assets. Let’s assume a farm has $300,000 in current assets and $175,000 in current liabilities. This farm has $25,000 ($300,000 – $175,000) in working capital. There is no standard dollar amount of working capital needed for businesses as it will vary by farm size. Comparing total working capital to gross revenues does provide an indicator of whether a farm’s working capital is “enough”. USDA-ERS forecasts a 13.6% decline in working capital in 2021 from 2020. If realized, this would be the largest decline since 2016. Continue reading →
By: Barry Ward, David Marrison, Peggy Hall, Dianne Shoemaker, and Julie Strawser – Ohio State University Extension
“Farm Office Live” continues this winter as an opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other related issues from faculty and educators with the College of Food, Agricultural, and Environmental Sciences at The Ohio State University.
Each Farm Office Live begins with presentations on select ag law and farm management topics from our specialists followed by open discussions and a Q&A session. Viewers can attend “Farm Office Live” online each month on Wednesday evening or Friday morning or can catch a recording of each program.
The full slate of offerings remaining for this winter are:
March 10th, 7:00 – 8:30 pm
March 12th 10:00 – 11:30 am
April 7th, 7:00 – 8:30 pm
April 9th, 10:00 – 11:30 am
Topics to be addressed in March include:
Coronavirus Food Assistance Program (CFAP)
Proposed “American Rescue Plan of 2021” – New Stimulus Legislation
General Legislative Update
Ohio Farm Business Analysis – A Look at Crops
Ohio Cash Rental Rates: Outlook and Discussion on Lease Alternatives
Now is the time to make your decision about whether you will use ARC or PLC for your operation in 2021. March 15 is THE LAST day to make what is likely one of the most important business decisions you will make for your farming operation this year. Please contact your FSA County office to set up an appointment today. There will not be an extension of this deadline. Producers who fail to elect either Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) by March 15, 2021, will NOT receive a 2020 payment and their 2021 election will default to the prior farm bill election.
Ohio FSA Service Center Status: Many USDA Service Centers in Ohio continue to restrict in-person office visits. However, all Service Centers remain open for business and our staff will be in the office and will work with our producers by phone, by email, or by using other online tools. All Service Center visitors wishing to conduct business FSA should call ahead and schedule an appointment.
This is a 3-hour educational course that covers good agricultural practices or GAPs. GAPs training provides growers with the knowledge and tools needed to implement on-farm best management practices to reduce on-farm microbial food safety hazards. Participants will receive a certificate of completion at the end of the training.
by: Chris Zoller, Extension Educator, ANR in Tuscarawas County
The United States Department of Agriculture Economic Research Service (USDA-ERS) on February 5th released their projection for U.S. farm income in 2021. Farm income is projected to fall this year primarily because government payments received by farmers are expected to decline to $21.8 billion (46.3%) after increasing $24 billion (104%) in 2020 (see Figure 1).
Figure 1. U.S. Net Farm Income and Net Cash Farm Income, 2000 – 2021 Forecast
Net cash farm income (NCFI) is calculated by subtracting cash expenses from gross income. This figure is expected to grow 23.7% in 2020 but drop by $10.4 billion (7.5%) in 2021. Net Farm Income (NFI) is considered a broader measure of profitability that includes changes in inventories, depreciation, and gross imputed rental income. Like NCFI, the U.S. NFI is expected to increase in 2020 and decline 9.7% to $111.4 billion in 2021. If this happens, it will be the first time since 2016 that NFI has fallen. However, NCFI and NFI would remain above their respective averages during the 2000 – 2019 period. A bright spot from the USDA-ERS report is that farm commodity cash receipts are expected to increase by 3.6% in 2021.
Based on these projections, budgeting is going to be very important for 2021. Ohio State University Extension has corn, soybean, and wheat budgets available here: https://farmoffice.osu.edu/farm-mgt-tools/farm-budgets. I encourage you to use your financials and these budgets as a planning tool. Scheduling an appointment with your lender, accountant, and Extension Educator to discuss options will be time well spent.
In accordance with the Regulatory Freeze Pending Review memo issued by the White House on January 20, the United States Department of Agriculture has suspended the $2.3 billion of additional assistance to the Coronavirus Food Assistance Program put in place during the final days of the Trump Administration.
The Trump administration had previously announced on January 15 providing additional assistance of CFAP expanding eligibility for some agricultural producers and commodities as well as updating payments to accurately compensate some producers who already applied for the program. The expanded eligibility was targeted primarily for contract pork and poultry producers and others previously excluded from the relief payments. Continue reading →
by: Mary Griffith, Chris Zoller, Hallie Williams, OSU Extension Educators
Enrollment for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs for the 2021 crop year opened in October, with the deadline to enroll and make amendments to program elections on March 15, 2021. This signup is for potential payments for the 2021 crop.
If changes are not made by the March 15th deadline, the selection defaults to the programs selected for the 2020 crop year with no penalty. While it is optional to make changes to program elections, producers are required to enroll (sign a contract) each year to be eligible to receive payments. So, even if you do not change your program elections, you will still need to make an appointment at the Farm Service Agency to sign off on enrollment for the 2021 crop year by that March 15th deadline.
Producers have the option to enroll covered commodities in either ARC-County, ARC-Individual, or PLC. Program elections are made on a crop-by-crop basis unless selecting ARC-Individual where all crops under that FSA Farm Number fall under that program. These are the same program options that were available to producers during the 2019 and 2020 crop years. In some cases, producers may want to amend program election to better manage the potential risks facing their farms during the 2021 crop year. Continue reading →