Carl Zulauf, Ohio State University, and Gary Schnitkey, Jonathan Coppess, and Nick Paulson, University of Illinois at Urbana-Champaign
Price is the focus of almost all discussions about the one time irrevocable opportunity to choose among Agriculture Risk Coverage - county (ARC-CO), Agriculture Risk Coverage - individual (ARC-IC), and Price Loss Coverage (PLC). This article instead focuses on the forgotten variable ▬ yield. Yield can play an important role in the decision.
Yield Types Impacting Crop Program Choice
► Program Yield ▬ fixed yield on file with the Farm Service Agency (FSA) used to calculate PLC payments
■ It is either (1) the updated program yield [90% of 2009-2012 FSA farm average yield], (2) current program yield [default yield], or (3) FSA update replacement yield [75% of 2008-2012 average county yield].
► Yield component of A... Read More »
By: Brad Bergefurd, Extension Educator
There are nearly 8,000 farmers markets in the U.S., an increase of more than 150 percent since 2000. Direct-to-consumer agriculture sales produce $1.2 billion in annual revenues. To be successful in your agricultural business an important thing is to have a good marketing plan. The Ohio State University South Centers leads Ohio’s Direct Agricultural Marketing program and has many resources available to assist producers with resources and educational opportunities to assist with their direct agricultural marketing plans.
Launched in 2008, one very important resource is Ohio MarketMaker which currently hosts one of the most extensive collections of searchable food industry-related data in the country. The web based program contains demographic, food consumption, and business data that users can search to find products to buy, or find a place to ... Read More »
by David Marrison
Farm buildings and livestock facilities often outlast their owner’s need for them, but can still provide usable service. Other farmers in the community may wish to use these buildings instead of investing in new facilities. Both parties can benefit from a leasing arrangement. However, they must agree on the amount of the rental payment and the use and care of the property. However, information about common rental rates for farm buildings is not easily obtainable. To help provide information for farmers, a survey was recently conducted by the North Central Farm Management Extension Committee. The survey was conducted across the Midwest and was completed by farm operators, farm owners, professional farm managers and rural appraisers.
The survey assumed that building tenants would provide labor and management and pay the cost of utilities and minor upkeep. Owners would generally be responsible for major repa... Read More »
Dianne Shoemaker, Bill Weiss, and Normand St-Pierre Extension Dairy Specialists, The Ohio State University
If it’s late summer it’s time to talk about pricing a corn crop standing in the field for corn silage. This is always a challenging question as there are a number of factors that contribute to the final price agreed upon by the buyer and seller that are challenging to quantify.
This corn silage pricing discussion begins with a corn crop standing in the field. The grower’s goal is to recover the cost of producing and harvesting the crop plus a profit margin. Their base price would be the price they could receive for the crop from the grain market less harvesting/drying/storage costs. Hopefully, this would meet their goal of covering production costs and generating a profit. During price negotiations, it should be recognized that harvest risk is also being shifted from the grower to the buyer.
To the grain farmer, the ... Read More »
By: Chris Bruynis, PhD, Assistant Professor & Extension Educator, OSU Extension.
Earlier I had written an article on the possibility of Ohio getting an ACRE Payment for the 2013 corn crop. The USDA corn yield for Ohio ended up at 177 bushels of grain, which was significantly higher than the 152 bushel five year Olympic average. Initially I had overestimated the state revenue guarantee, which is actually $690 per acre. Because of the higher yield and the corrected revenue guarantee at the state level, the market average price would need to fall below $3.90 for the 2013 crop. Current estimates (August 2014) have the market average price at $4.45 which is significantly higher. With this new information, it is highly unlikely that corn will make a payment for the 2013 corn crop.
By: Carl Zulauf, Ohio State University, and Gary Schnitkey, Jonathan Coppess, and Nick Paulson, University of Illinois at Urbana-Chapaign
The 2014 farm bill gives Farm Service Agency (FSA) farm owners a 1-time opportunity to elect their Title 1 crop program for the 2014 through 2018 crop years. Three program options exist: Agriculture Risk Coverage-individual (ARC-IC), Agriculture Risk Coverage-county (ARC-CO), and Price Loss Coverage (PLC) with the choice to buy the Supplemental Coverage (insurance) Option (SCO). This article examines the choice between ARC-CO and PLC. In contrast to ARC-CO and PLC, ARC-IC pays on 65% not 85% of program acres and is elected on a FSA farm basis, not a program crop basis. ARC-IC thus is an option to consider based on the ARC-IC farm situation, including when (1) production on the ARC-IC farm unit is hig...
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By: Carl Zulauf, Ohio State University, Nick Rettig, B.S., Ohio State University, and Matt Roberts, Associate Professor, Ohio State University
A common presumption is that futures prices can predict future price, specifically the price during the last or delivery month of trading on a futures contract. This presumption has potential importance for both marketing and policy. Many crop insurance contracts use futures prices to establish their pre-plant and harvest prices. In addition, it is common to hear that futures prices should be used to forecast prices when evaluating the farm program choices in the 2014 farm bill. This article calls into question the presumption that futures prices can predict future price. It also finds that cash price performs as well as futures price in forecasting future price. Because of the technical natur...
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