Newsletter | Past Issues

October, 2008

In This Issue:

2009 Ohio Corn, Soybean and Wheat Enterprise Budgets

OSU Income Tax Schools to be Held

Is a Prenuptial Agreement Right for Your Farm Business?

Agricultural Tax Issues Workshop Announced

Land Use & Development Issues of the Ohio Grape & Wine Industry

Remembering Safety When Harvesting Downed Corn

Mandatory COOL and Considerations for Cattle Producers

Livestock Marketing Information Center Newsletter

Do you have a question that you would like to ask the Ohio AG Manager Team?  If so, click here to email your question

2009 Ohio Corn, Soybean and Wheat Enterprise Budgets Now Available
Barry Ward, Leader, Production Business Management
Brian Freytag, Extension Intern, Undergraduate Student
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, or Wheat? 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 2009 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 Budgets updated so far for 2009 include: Corn-Conservation Tillage; Soybeans-No-Till (Roundup Ready); Wheat-Conservation Tillage, (Grain & Straw).

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 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.

All of the 2008 Enterprise Budgets are available in Excel and PDF format on the OSU Farm Management Budget Website (http://aede.osu.edu/Programs/FarmManagement/Budgets/) :

Crops

• Corn – Conservation Tillage (NH3, UAN, and Urea Nitrogen sources)
• Soybeans – Roundup Ready, No-till
• Wheat – Conservation Tillage, (Grain and Straw)
• Alfalfa Hay – Spring Seeding
• Grass Hay – Large Bale System
• Corn Silage – Large scale, Self-Propelled Machine Harvested
• Corn Silage – Small scale, Pull-Behind Machine Harvested
• Retail Sweet Corn – Conservation Tillage, Hand Harvested
• Wholesale Sweet Corn – Conservation Tillage, Machine Harvested
• Large-Scale Popcorn – Conservation Tillage
  

Livestock

• Slaughter Steer – Days on Feed: 232 & Days on Feed: 250
• Slaughter Yearling Steer – Days on Feed: 182 & Days on Feed: 190
• Slaughter Heifer – Days on Feed 220
• Cow-Calf – Spring Calving
• Ewe and Lamb - Winter Lambing
• Dairy Cow and Replacement – Large Breed
  
  

Return to Top

OSU Income Tax Schools to be Held

Warren F. Lee, Director, OSU Income Tax Schools

The Ohio State University’s Department of Agricultural, Environmental, and Development Economics Department is pleased to announce they will be hosting nine OSU Income Tax Schools across Ohio this fall. These schools are designed for tax preparers with some experience preparing and filing federal tax returns for individuals and small businesses. Instruction focuses on tax law changes and on the problems faced in preparing tax returns. The tax school workbook also will cover changes in filing Ohio tax returns. Highly qualified instructors will explain and interpret tax regulations and recent changes in tax laws. Participants in the Tax Schools receive a 700-page workbook prepared by the Land Grant University Tax Education Foundation especially for the income tax schools held in Ohio and 30 other states. The workbook is available only as a part of tax school registration. This year participants will also receive RIA's Federal Tax Handbook. The registration fee includes the workbook and other reference materials, instructor fees, meals, meeting rooms, and other expenses.

Complete registration details can be found at: http://aede.osu.edu/programs/taxschool/default.aspx

The tax school locations are as follows:

Fremont – November 13-14
Ole Zim’s Wagonshed
1375 State Route 590
Gibsonburg, Ohio 43431

Columbus – November 17-18 (New Location)
Holiday Inn Columbus-Worthington
7007 N. High Street
Worthington, OH 43085

Kent – November 18-19
Kent State University
Student Center
Summit Street
Kent, OH 44242

Ashtabula – November 20 (New 1-day school)
Ashtabula County Extension Office
39 Wall Street
Jefferson, Ohio 44047

Dayton – November 24-25
Presidential Banquet Center, Dayton
4548 Presidential Way
Dayton, OH 45429

Ashland – December 2-3
Convocation Center, Ashland University
820 Claremont Ave.
Ashland, OH 44805

Lima – December 4-5
Lima Civic and Convention Center
7 Towne Square
Lima, OH 45801

Chillicothe – December 9-10 (New Location)
Ross County Fairgrounds
344 Fairgrounds Road
Chillicothe, OH 45601

Zanesville – December 11-12
Ohio University Campus Center,
Zanesville Branch
1425 Newark Road
Zanesville, OH 43701

2-Hour Ethics Class – 5:15-7:15 p.m. (Three Locations Only)
Columbus – November 17
Kent – November 18

Lima – December 4

Return to Top

Is a Prenuptial Agreement Right for Your Farm Business?

Chris Zoller, OSU Extension, Tuscarawas & Holmes Counties
David Marrison, OSU Extension, Ashtabula County

Farm and agricultural businesses often have high capital investments in land, machinery, livestock, and miscellaneous equipment, with many Ohio farms having more than $1 million in capital assets. With an average divorce rate of 50%, it is in the long term financial interest of all farms to protect their business assets in the event of a divorce of the business partners. One tool available to Ohio farmers is a prenuptial agreement. A prenuptial agreement, in its simplest form is a written contract between two people before they are married. To read OSU Extension’s new factsheet on prenuptial agreements, please go to http://ohioline.osu.edu/bst-fact/

Return to Top

Agricultural Tax Issues Workshop Announced

Warren F. Lee, Director, OSU Income Tax Schools

Tax practitioners with an interest in farm income taxes will have an opportunity to attend a one day farm tax workshop scheduled for December 15th according to Dr. Warren Lee, Director, Ohio Income Tax Schools, The Ohio State University. The Agricultural Tax Issues program has been accepted for continuing education credits by the Accountancy Board of Ohio, IRS Director of Practice and the Ohio Supreme Court Commission on Continuing Legal Education.

This workshop will be taught by Dr. Phil Harris, Professor of Agricultural Economics, University of Wisconsin. Participants will hear a lecture on current agricultural tax issues given by Dr. Harris supplemented with a slide presentation. Dr. Harris will be available for questions during two scheduled conference calls and OSU faculty will also be available to answer questions. Participants will also receive a 300 page book, Agricultural Tax Issues and Form Preparation, authored by Dr. Harris as part of their registration.

Topics to be covered during the workshop include tax provisions of the 2008 Farm Bill, sale of carbon credits, conservation easements & the farmer provisions, prepaid expenses, fertilizer containment structures, soil & water conservation payments, tax issues for farmland owners who rent their land, depreciation & IRC 179 expensing and other related topics.

The workshop will be held on Monday, December 15th at the following locations in Ohio: Caldwell, Chillicothe, Columbus, Greenville, Jefferson, Ottawa, Urbana, Upper Sandusky and Wooster.

Workshop information, a downloadable registration form as well as on-line registration are available at the following website: http://aede.osu.edu/programs/TaxSchool/agissues.aspx. Or contact Dr. Warren Lee, Ohio Income Tax Schools, at 614-292-6308 (or lee.69@osu.edu) for additional information concerning the workshop.

The Agricultural Tax Issues Workshop is sponsored by the Ohio State University Department of Agricultural, Environmental and Development Economics and Ohio State University Extension.

Return to Top

Land Use & Development Issues of the Ohio Grape & Wine Industry

David L. Marrison, Assistant Professor, The Ohio State University, Ashtabula County Extension

The grape and wine industry continues to be a dynamic part of Ohio’s agriculture industry with 2,200 acres of grape vineyards and more than 100 wineries. In 2007, OSU Extension led a study to determine the land and development concerns of the Ohio grape and wine industry. This study examined the changes occurring near this grape region, vineyard planting and expansion projects, estate planning, development pressures, and concerns for the future operation of grape and wine businesses. Click here to view the complete research report:

http://ashtabula.osu.edu/ohio-grape-wine-economic-impact-study

Return to Top

Remembering Safety When Harvesting Downed Corn

Candace Pollock, Communications and Technology, Ohio State University
Randall Reeder, Professor, Department of Food, Agricultural, and Biological Engineering, Ohio State University

With windblown corn in various conditions, from leaning stalks to plants on the ground, harvesting may be a challenge this fall. But in the haste to salvage crop losses, the one thing farmers should not forget is safety.

"Safety will be an issue this fall," said Randall Reeder, an Ohio State University Extension agricultural engineer. "Because of downed corn, harvest will drag on longer than usual, the header will plug more often, and operator stress and frustration will be higher. Under these conditions, it is more important than ever to emphasize safety in and around equipment."

Reeder said that the main issues farmers will be facing in harvesting downed corn include slower operating speeds; more frequent header plugging; more rocks picked up by the header; and more corn stalks going through the combine along with the grain, slowing grain separation and contributing to more grain thrown out the back of the equipment.

"Farmers are also going to get more frustrated seeing whole ears laying in the field," said Reeder, who also holds an appointment with the Ohio Agricultural Research and Development Center. "Add to that a delayed spring planting which will translate into delays in fall harvest, and farmers will be pushed to harvest as quickly as possible before the days turn shorter and the weather worsens."

Reeder offers some tips for farmers to ensure they harvest downed corn safely:

* Make sure the combine is in peak operating order. "Downed corn will cause enough problems without the annoyance of routine breakdowns," said Reeder.

* Look for harvesting aids or equipment that specifically deals with downed corn.

* If a farmer has precision farming equipment, use it. "Auto steering and/or a row sensor can at least relieve the operator of trying to see and follow the row," said Reeder.

* Make adjustments to the header to accommodate broken stalks or downed plants.

* Take a break when needed, despite the rush to finish and the long hours in the combine. "Drink plenty of liquids and eat healthy," said Reeder.

* Tape safety reminders at various places, such as the combine cab or dryer area.

* Count to 10 before exiting the cab to deal with a problem.

* "When you have to get out of the combine cab to solve a problem, make sure you turn the combine off first," said Reeder. "If a second person is helping to unclog the header, still turn the equipment off. The No. 1 rule for preventing injuries is always turn equipment off first, emphasizes Reeder.

"Operating in a safe, deliberate manner may extend harvest by a week or two. That may seem excessive, but compare it to the delay that could result from a major injury," said Reeder.

According to Ohio State University's Agricultural Safety and Health Program, the number of farm fatalities spikes in the spring and in the fall, coinciding with planting and harvest. Between 1997 and 2006, there were 60 fatalities in Ohio related to farm machinery and equipment.

For more information on harvesting downed corn, including links to other web sites, log on to Ohio State University Extension's Agronomic Crops Team Web site at http://agcrops.osu.edu.

Return to Top

Mandatory COOL and Considerations for Cattle Producers

Derrell S. Peel, Extension Livestock Marketing Specialist, Oklahoma State University
Updated: September 22, 2008

USDA’s Agricultural Marketing Service (AMS) issued an interim final rule for mandatory Country of Origin Labeling (COOL) on July 29, 2008. AMS will accept comments from all interested parties until September 30, 2008. COOL became law in the 2002 Farm Bill but implementation has been delayed twice by Congress. The 2008 Farm Bill (Food, Conservation and Energy Act) made several changes to the COOL law, which have been incorporated into the interim final rule.

Highlights of Mandatory COOL under the interim final rule:

• Mandatory COOL will take effect September 30, 2008; products produced or packaged before this date are not covered.
• The act covers the following products sold at retail:
  • Beef, pork, lamb, chicken and goat (whole muscle and ground)
  • Fresh and frozen fruits and vegetables
  • Seafood (wild and farm-raised); previously implemented
  • Peanuts, macadamia nuts, pecans and ginseng
• Requirement: products must be labeled as to country of origin in an obvious (visible) manner that does not interfere with any other label requirements.
• Food service is excluded, including deli’s and salad bars in retail stores.
• Processed foods are excluded.
• Processed food exclusion is based on two guidelines:
  • Products that are changed in character: Cooking, drying, curing, smoking, etc.
  • Products that are combined with other products to make a new product
• Covered meat products include “All muscle cuts of beef, lamb, chicken, goat and pork; and ground beef, ground lamb, ground chicken, ground goat and ground pork.
• To be labeled “Product of USA”, cattle must be born, raised and slaughtered in the U.S. (Category A)
• Animals born, raised and/or slaughtered in the U.S. and not imported for immediate slaughter use the label: “Product of the U.S., country X and country Y.” (Category B)
• Animals imported immediately before slaughter use the label: “Product of country X and the U.S.” (Category C)
• Products imported directly for retail sale use the label: “Product of country X.” (Category D)
• Ground meat products can use a label that states “may contain product of countries X,Y and Z”.
• Retailers and suppliers may include meat from Category A in Category B.
• Retailers and suppliers may commingle Category B and Category C in a single mixed origin label.
• Retailers must provide country of origin information to final consumers and must retain records for 1 year.
• All suppliers of a covered commodity, whether direct or indirect, must provide origin information and maintain records for 1 year.
• Both retailers and suppliers are subject to fines of $1,000 per violation for willful violation of the act.
• Retailers and suppliers are also subject to any other applicable statutes, e.g., food labeling as covered by FDA rules.
• USDA-AMS will conduct compliance reviews and will initiate investigations and enforcement actions.
  

Supplier Recordkeeping

The rule states that “any person engaged in the business of supplying a covered commodity, whether directly or indirectly, must make available information to the subsequent purchaser about the country(ies) of origin” and “must maintain records that establish and identify the immediate previous source and the immediate subsequent recipient of a covered commodity, in such a way that identifies the product unique to that transaction, for a period of 1 year from the date of the transaction”.

Origin claims are to be substantiated with “records maintained in the normal course of business.” Producer affidavits may be used to initiate an origin claim provided they are “made by someone having first-hand knowledge of the origin of the animal(s) and identifies the animal(s) unique to the transaction.” A coalition of industry participants recently developed universal affidavit language that is acceptable to buyers and sellers and has been approved by AMS. Sample affidavits are available from many industry organizations.

In general, it is up to beef retailers and suppliers (e.g. packers) to indicate what records will satisfy the information they must provide. Cattle are not a "covered commodity” under COOL, but since beef is a covered commodity, cattle producers must supply origin information for all animals whose products are covered. Packers are considered the originators of the country of origin label for the covered commodity and “must possess or have legal access to records that are necessary to substantiate that claim.” Individual animal identification cannot be required by USDA for COOL compliance. However, animals identified in a NAIS compliant or other official identification program may use the ID as verification of origin. Meat from animals that cannot verify origin must be directed into other market channels such as restaurants, institutions, further processed or exports.

In the case of cow-calf producers, records may already exist in many cases but some producers will have to make an extra effort to ensure that each sale of calves is linked to herd records that document origin. Producers can use herd or calving records, feed or vaccine purchases, etc. to document production and origin. Producers will be asked to provide affidavits to purchasers verifying the origin of the animals. A huge challenge for the cow-calf sector is that COOL applies to meat from cows and bulls (if sold at retail). All animals in the U.S. on July 15, 2008 are considered U.S. origin under COOL. It is important for livestock producers, especially cow-calf producers, to document the size and composition of the herd on this date. This initial documentation may be needed for several years until all cows and bulls currently in the herd are sold. Individual calf identification (ear tags) is not required (cannot be required by USDA) and may not be essential for cow-calf producers but may be helpful to link specific calves or sets of calves to the appropriate herd records.

For stocker producers and feedlots, AMS has indicated that animals from various source groups, but with the same origin, may be commingled and sold in different sales groups without tracking animals to specific source groups as long as the producer has records which verify an overall balance between animal purchases and sales. Depending on the nature of the operation and the manner that animals flow through the operation, producers may find that a more detailed tracking system, possibly including individual animal ID is the most efficient way to document sources and destinations of animals. Producers should request an affidavit for all animals purchased and may use that as the basis to issue “consolidated” affidavits for sales of commingled groups of animals. Animals with different origin should be segregated with supporting records unless some sort of individual animal ID system is used to track animals. As noted above, NAIS compliant animals may use the animal ID to verify origin.

Return to Top

Livestock Marketing Information Center Newsletter

Matthew Roberts, Associate Professor, Department of Agricultural, Environmental and Development Economics, Ohio State University

This is the Livestock Marketing Information Center publishes a twice-monthly, free livestock marketing newsletter.  The most recent edition is available at http://www.lmic.info/stories/mon.pdf

The Livestock Marketing Information Center has provided economic analysis and market projections concerning the livestock industry, since 1955. Center resources contribute to economic education, support applied research projects, and policy evaluation. Center staff continuously update forecasts, projections and support materials related to market situation and outlook. The LMIC is a unique cooperative effort between state university extension specialists, USDA economists, industry cooperators and Center staff. Through cooperative efforts and programs, duplication of effort is greatly reduced while enhancing the overall quality and quantity of livestock market information for producers and other decision makers. Visit the center online at: http://www.lmic.info/

Return to Top

**************************************************************************************

Readers can subscribe electronically to this newsletter by sending an e-mail message to: ohioagmanager-on@ag.osu.edu. A successful subscription message will receive by an automatic reply from the listserv. Contact your local Ohio State University Extension Office or e-mail marrison.2@osu.edu if you have problems subscribing.

The Ohio Ag Manager newsletter is published in collaboration by OSU Extension Educators and Faculty members of Ohio State University's Department of Agricultural, Environmental and Development Economics.

Ohio Ag Manager Team Leaders: Chris Bruynis & David Marrison

Web Page Managers: David Marrison & Andy Kleinschmidt

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