Financial Management

Sep

23

2011

2012 Ohio Corn, Soybean and Wheat Enterprise Budgets

By Barry Ward, Leader, Production Business Management, The Department of Agricultural, Environmental, and Development Economics

Newly updated corn, soybean and wheat enterprise budgets for 2012 have been released and were a hot item in the Farm Management Center at the farm Science Review. These 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 a new look with color coded cells that will enable 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. Starting this year we will be updating these Enterprise Budgets periodically during the year is large changes occur in price or costs. Budgets will include a date in the upper right hand corner of the front page indicating when the last update occurred.

Click on the following links to download the corresponding budgets:

2012 Corn Budget

2012 Soybean Budget

2012 Wheat Budget

Financial Management, Newsletters, October 2011

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Sep

19

2011

Agricultural Lenders’ Seminars

By:Glen Arnold, Extension Educator, Agriculture and Natural Resources, Putnam County and Barry Ward, Leader, Production Business Management, OSU Extension The Ohio State University Extension has scheduled two seminars in western Ohio for Agricultural Lenders. The dates are Wednesday, November 2nd at the Champaign County Extension office in Urbana and Thursday, November 3rd at the Putnam County Extension office in Ottawa. These seminars are excellent opportunities for Lenders, Farm Service Agency personnel, county Extension Educators and others to learn about OSU Extension research, outreach programs and current agricultural topics of interest across the state. Topics and Speakers for 2011 Seminars: Assessment of Federal Farm and Energy Program Changes to Meet Budget Challenges Carl Zulauf Professor Department of Agricultural, Environmental and Development Economics The Ohio State University Livestock Economics and Outlook for Ohio Farmers Chris Hurt Professor Department of Agricultural Economics Purdue University Precision Farming – Implications for Ohio Farmers and Ag Lenders Scott A. Shearer Professor and Chair Department of Food, Agricultural and Biological Engineering The Ohio State University Crop Inputs Outlook, Enterprise Budgets and Flexible Cash Leases Barry Ward Leader, Production Business Management Department of Agricultural, Environmental and Development Economics The Ohio State University How Lenders Can Utilize FSA Loan Programs to Assist...
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Financial Management, Newsletters, October 2011, Upcoming Events

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Jul

19

2011

Farm Finance for Women Workshop to be offered in August

By Julia Nolan Woodruff, Extension Educator, Erie County After a successful winter workshop series, OSU Extension will be offering a summer version of the Farm Finance for Women workshops. This workshop is designed to address the area of financial risk management. There are a series of four classes; one held each week in the evening from 6:30 – 9:00 pm. The summer workshop will be held in Knox and Delaware Counties. The first two classes will be at the OSU Extension Office located at 1025 Harcourt Rd., Mount Vernon and the second two classes will be held at the OSU Extension office in Delaware County located at 149 N. Sandusky St., Delaware. The classes will be held on August 9, 16, 23, 30. Click for Brochure A more in-depth study of the components of financial risk related to agriculture is discussed by the educators teaching this workshop. Educators will provide tools for women to utilize in order to increase their current financial risk management skills. The program is inspired by the recent Annie’s Project Workshops and organized much like those workshops. However, there is only one area of risk management focus, unlike the past Annie’s Project Workshops. Specific topics that will be addressed include: cash flow, balance sheet and income statement development, Quicken basics for farm recordkeeping, and benchmarking. The workshops will include hands-on activities, computer entry for the Quicken workshop, and homework. Three workshops were piloted this ...
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August 2011, Financial Management, Upcoming Events

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Jul

12

2011

2011 Ohio Swine and Sheep Enterprise Budgets

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

Newly updated Swine and Sheep Enterprise Budgets for 2011 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 so far for 2011 include: Corn-Conservation Tillage; Soybeans-No-Till (Roundup Ready); Wheat-Conservation Tillage, (Grain & Straw), Alfalfa Hay and Grass Hay.

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. Detailed footnotes are included to help explain methodologies used to obtain the budget numbers.

August 2011, Financial Management, Newsletters

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Jul

02

2011

How Well Do Farmers Tolerate Risk? Part 2 – Comparisons to Non-farm Business Owners

Brian Roe
Department of Agricultural, Environmental and Development Economics

Last month I asked a simple question: does farmers’ constant exposure to risk and risky decisions make them better able to tolerate risk than other people? Or has it gone the other way and made farmers more likely to want to avoid future risks? Using surveys to get a representative sample of the general population and the population of farmers, I asked a simple question to assess a person’s willingness to take risks on a 1 to 11 scale, where higher numbers means more willingness to take risk. Click here to read the entire article.

Financial Management, July 2011

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Jun

10

2011

Cover Crops and Prevented Planting Update for Illinois, Indiana, Michigan and Ohio

SPRINGFIELD, Ill., June 10, 2011 – An announcement made by the Risk Management Agency (RMA) today states that producers are eligible for prevented planting on acreage where the cover crop was not timely terminated and the subsequent crop was prevented from planting due to an insurable cause of loss.

The statements in the Special Provisions of Insurance are relevant to insuring a spring crop (e.g. corn, soybeans, etc.) following a crop or small grain crop that has reached the headed stage. Producers who plant a crop after a cover crop that has headed, budded, or has been harvested in the same calendar year are required to request a written agreement through their crop insurance agent. Producers have until July 15th to request a written agreement request through their agent, but are encouraged to submit their request as early as possible because a crop inspection is required as part of the written agreement. The inspection must show a yield potential equal to 90 percent of the guarantee. Filing a request early will ensure producers are protected from losses during the growing season.

Producers are encouraged to talk to their insurance agent and ask questions related to their insurance policy, coverage, and prevented planting. Click here to Access the Cover Crops and Prevented Planting RMA News Release

Financial Management, June 2011

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May

31

2011

Training & Employment Services Offered through PathStone Corporation

By David Marrison, OSU Extension Educator Are you an Employer who would like to upgrade the current skill level of your employee(s)? Would you like assistance in developing and upgrading the current skill level of your agricultural workers? If your employees meet certain eligibility requirements, you may wish to explore working with the Farm worker Training & Employment Services through PathStone Corporation. PathStone Corporation is a private not for profit regional community development and human service organization which provides training services in New York, Ohio, Pennsylvania, New Jersey, Vermont, and Puerto Rico. Some of the services provided by PathStone include: #1) English as a Second Language; #2) Occupational Skills/and or Agriculture Upgrade Trainings and Certifications; #3) Skill Upgrading and Retraining; and #4) On- the- job training (OJT) where PathStone will subsidize up to 50% of the employee’s wages while training in a new position. PathStone’s goal is to provide your farm/and or business with services that will save you money, while providing you with trained and skilled employees. And PathStone is able to provide these services to you the employer for free!!! PathStone Corporation has 5 offices across Ohio in Liberty Center, Fremont, Tipp City, Painesville and Alliance. To be eligible for the training program you must be a farm worker or the dependent/spouse of a farm worker who has worked 25 days or earned at least $800 in f...
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Financial Management, June 2011, Labor Management

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May

27

2011

Late Planting Decision Aid Updated

Chris Bruynis, PhD, Assistant Professor & Extension Educator and Barry Ward, Assistant Professor & Program Leader. As each storm roles through Ohio delaying planting even further, the decision to plant corn, switch to soybeans, or take prevented plant becomes more challenging. A decision aid was created to assist farmers in making this decision. Since last Friday, there has been some additional information incorporated into the program. Since yield will vary from field to field or farm to farm, the ability to enter an expected harvest yield was added to the program. This will allow farmers to fine tune their decision by allowing them to examine the potential profitability ranging from the highly productive fields/farms to the poorer producing farms and make decisions based on profit potential. Also there are costs associated with selecting prevented plant insurance payments that should be considered when making the decision. Reports are coming in that there could be a “restocking fee” for returning seed or other inputs that have been ordered. Also there will probably be storage charges for fertilizer and other prepaid but not yet delivered inputs or a buyback discount of some kind. On inputs that will be kept until next year, farmers should charge the increased interest expense associated with their operating loan. The crop insurance premium will still be paid, and there is a place to insert any other miscellaneous costs not already mentioned. This pro...
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Financial Management, June 2011, Newsletters

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May

25

2011

Enterprise Budgets Provide Another Tool to Evaluate Your Planting Decisions

Barry Ward Leader, Production Business Management Ohio State University Extension and Department of Agricultural, Environmental and Development Economics Wet weather and atrocious planting conditions in Ohio in 2011 have led to a lot of hand wringing this year. Tough decisions lay ahead for many Ohio farmers as we approach June 5th, the “final planting date” for corn for crop insurance purposes. After this date, producers may take prevented planting payments on the farm or see their crop insurance coverage decrease each day of delay. Comparing your prevented planting payment to potential returns to corn or soybean planting may be a daily activity as we enter June. Enterprise budgets comparing corn and soybean returns have been compiled and posted to our Enterprise Budget webpage to show an example of what late planting economics might look like for corn and soybeans. http://aede.osu.edu/Programs/FarmManagement/Budgets/crops-2011/index2011.htm For the “Late Planting Budget” (Planting date May 28 through June 5) we assume corn suffers a 21% yield loss while soybeans suffer a 10% yield loss. Corn drying costs are also increased in this late planting scenario. “Returns to Labor and Management” is a measure that is calculated by subtracting all expenses except unpaid operator labor and management from gross revenue. “Returns to Labor and Management” for corn planted during this window (assuming 155bpa yield in a normal year and 122bpa due to late p...
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Financial Management, June 2011

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May

19

2011

New Decision Aid to Determine Late Planting Options

By: Chris Bruynis, Extension Educator and Barry Ward, Leader Production Business Management With continued wet soil conditions throughout Ohio, farmers are evaluating whether to plant corn, switch to soybeans, or opt for preventative planting crop insurance payments. OSU Extension has developed the decision aid, “Estimated Yield and Profit by Planting Date – Corn, Soybeans or Preventative Planting Crop Insurance” which is a downloadable Excel spreadsheet. It allows farmers to enter their own production information to determine which choice might be best for their operation. Many factors enter into this critical decision. Actual planting date and potential yield loss associated with later planting, relative yield potential of corn and soybeans of the farm, relative prices of corn and soybeans, market basis differences due to a later harvested crop, potential savings of crop inputs due to a later planting date, potentially higher costs of grain drying, and crop insurance APH yield and coverage level are some of the major factors impacting a producers decision. This decision aid allows users to enter their own assumptions about maximum yield potential, harvest market prices, input costs, and crop insurance coverage levels. Click here to download Decision Aid. The “Estimated Yield and Profit by Planting Date – Corn, Soybeans or Preventative Planting Crop Insurance” decision aid was created using historical yield data for Ohio to determine potential corn ...
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Farm Policy, Financial Management, June 2011

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May

05

2011

Crop Insurance: What are the Preventative Plant Rules?

By: Chris Bruynis, Assistant Professor & Extension Educator; Greg Schiefer, Scheifer Farm and Family Insurance; and Marlene McCreary, Farmers Mutual Insurance With the weather forecasters calling for more wet weather for the next ten days, farmers are starting to think about the preventative planting provisions in their crop insurance policies. Although most crop insurance policies have some preventative plant provision, neither GRP nor GRIP policies have preventative plant coverage, so check with your agent. One good thing is that farmers have choices and do not have to rush into any decisions but need to be aware of their options before getting to busy in the field. The target date for corn to be planted is June 5th and farmers can either take preventative planting, switch to another crop, or still plant corn with a reduction in coverage. Claiming preventative planting probably will not be the first choice in 2011 because many farmers have already locked in favorable contract prices for their corn and will need to plant some corn to fulfill those obligations. But if farmers choose to take preventative plant they will need either 20% or 20 acres of a unit (whichever is smaller) to have not been planted this year. Example: a farmer has 400 acres of corn insured, 20% of 400 would be 80 acres and since 20 acres is smaller, there would need to be at least 20 acres of preventative plant in order to file a claim. The maximum numbers of acres that a farmer can cl...
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Farm Policy, Financial Management, May 2011

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May

05

2011

Sharing Farm Machinery-Can it Increase Profits for Ohio Farmers?

by: David Marrison, Assistant Professor & Extension Educator 2010 was a fabulous year for many Ohio crop producers due to the high commodity prices which prevailed for much of the year. But higher seed and fertilizer prices in 2011 may trigger some farmers to re-examine how they can decrease their cost of production for their commodities. Cooperative approaches can provide an alternative for farmers to reduce risks and more effectively manage farm resources. One way which has helped save medium and small farm operations money is joint ownership of farm machinery. Joint ownership of farm machinery offers medium and small operators a chance to reduce costs per acre and increase labor efficiency. Potential savings exist in several areas such as 1) greater annual use of large ticket machines; 2) more efficient use of labor during peak fieldwork times; 3) opportunities to do custom work for other operators or landowners; 4) greater use of individual operator skills and specialized labor and 5) more efficient use of repair and maintenance tools and facilities. Some members of machinery joint ventures also cite the ability to own larger and more modern machinery as an advantage, although if this is carried too far, some of the cost savings may be negated. A study in Saskatchewan estimated that three medium sized grain farms (1,500 acres each) could combine their equipment and reduce their total machinery costs per acre from $44.66 to $28.75 under conventional seeding...
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Financial Management, May 2011

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May

04

2011

Diesel Fuel Cost Calculator

By: Gene McCluer, Extension Educator

Diesel fuel costs have risen over the last year and based on current predictions will continue to rise during the coming months. The estimated cost of fuel for tractors, combines, and various tillage and planting operations are shown in the fuel cost estimator. If you do custom work, you will want to reflect some or all of the increased fuel costs in the rate. Using a price for number two diesel fuel at $4.00 per gallon, the table displays fuel costs for the various horsepower machines as well as different field operations. This form is an excel spreadsheet where you can change the price change per gallon or the fuel use per acre or hour to more precisely estimate the fuel cost portion of field operations. This will be helpful in determining the fuel costs for custom work operations or other farm work.

You can see that the current fuel prices may raise fuel cost for a mid-size combine from $24 to over $38 per hour. For row crop planters, the increase in fuel cost alone is 54 cents per acre. For haymaking, just the fuel for the mower/conditioner and twine baler will increase costs $1.26 per acre.

Financial Management, May 2011

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Apr

12

2011

Economic Impacts of Veterinary Medicine in Ohio

This research paper defines and quantifies selected economic factors associated with the veterinary medical profession in Ohio. Food animal agriculture is already a significant force within the state‟s economy. Veterinary medical professionals help maintain the health and well-being of both food animals and companion animals.

In addition, the profession contributes expertise through various activities designed to assure a safe food supply for all citizens. The veterinary medical profession is of particular significance for all Ohio citizens because of the role veterinary medical professionals‟ play in helping assure a safe food supply and maintaining the health of food animals and companion animals.

This research highlights the direct economic contribution of veterinary medicine and analyzes the geographic distribution of practicing veterinarians within Ohio. Click here to learn more about the value of the veterinary medicine industry in Ohio.

by Dr. Tom Sporleder,Professor of Agribusiness and Farm Income Enhancement Endowed Chair, AED Economics Department, The Ohio State University College of Food, Agriculture, and Environmental Sciences, Columbus, Ohio.

April 2011, Financial Management, Newsletters

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Mar

11

2011

Do I need Livestock Gross Margin Insurance?

Cameron S. Thraen
The Ohio State University Extension
State Specialist Dairy Markets and Policy
Department of Agricultural, Environmental and Development Economics
The Ohio State University

This eight page summary was written to be used as a guide for Ohio Dairy producers as they decide to purchase Livestock gross margin insurance as a profit management tool for their dairy business. This articles addresses the following questions that dairy farmers may have:

1. How do I determine risk exposure?
2. How in adequate of a margin can you withstand?
3. What is your maximum reduction in equity allowable?
4. What steps should I use in evaluating my situation?

Click here to access the 8 page LGM Dairy Evaluation Guide

Producers can also access Dr. Thraen’s LGM website at:
http://aede.osu.edu/programs/ohiodairy/LGM_Dairy.htm

Farm Policy, Financial Management, March 2011, Uncategorized

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Information presented above and where trade names are used, they are supplied with the understanding that no discrimination is intended and no endorsement by Ohio State University Extension is implied.

Ohio State University Extension embraces human diversity and is committed to ensuring that all research and related educational programs are available to clientele on a nondiscriminatory basis without regard to race, color, religion, sex, age, national origin, sexual orientation, gender identity or expression, disability, or veteran status. This statement is in accordance with United States Civil Rights Laws and the USDA.

Keith L. Smith, Ph.D., Associate Vice President for Agricultural Administration and Director, Ohio State University Extension TDD No. 800-589-8292 ( Ohio only) or 614-292-1868