Ohio Ag Manager - Management Information for Today's Agricultural Businesses

Mar

26

Spring Safety on the Farm

By: Chris Bruynis, Assistant Professor & Extension Educator The agricultural industry is one of the most dangerous occupations in the United States due to a broad range of risks associated with the occupation. Risks include road travel of slow, large equipment; many moving parts and wheels; a broad range of pesticides and fertilizers that have safety requirements associated with their use; and long hours associated with spring field operations. Research from the National Safety Council indicates that 700 farmers and ranchers die in work-related accidents annually. Additionally, agricultural industry statistics also indicate that another 120,000 agricultural workers suffer disabling injuries from work related accidents. With proper safety measures in place and followed, many of the deaths and accidents could be prevented. Dee Jepsen, OSU Specialist reminds us what is required and recommended for agricultural equipment while ...
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April 2012, Labor Management

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Mar

22

Risk and Reward of Planting Early: Crop Insurance Implications

By: Chris Bruynis, Assistant Professor & Extension Educator Unseasonably, warm, dry weather has prompted farmers to think about planting. If one looks at Mother Nature and the development of the tree leaves along with the current soil temperature, it is time to plant. But if one looks at the calendar and reads the provisions of their crop insurance policy it is not. So what is at risk? According to Gary Schnitkey, Professor at the University of Illinois, COMBO products – which include Yield Protection (YP), Revenue Protection with harvest price exclusion (RPwExcl), and Revenue Protection (RP) plans – have “earliest planting dates”. In Ohio, the earliest planting date for corn is April 6th, and April 21st for soybeans. To verify your county or check out a different crop go to http://webapp.rma.usda.gov/apps/actuarialinformationbrowser/2012/ReportDisplayCrop.aspx. According to the USDA Risk Management Agency crops ...
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April 2012, Farm Policy, Newsletters

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Mar

19

Marcellus Shale Payments Subject to Ohio CAT

By David Marrison, OSU Extension Extension Educator & Associate Professor Landowners across Ohio may be surprised to learn the bonus lease and royalty dollars received for their Marcellus Shale Leases will be subject to the Ohio commercial activity tax (CAT) if payments of over $150,000 are received. The CAT was enacted in House Bill 66, which was passed by the 126th General Assembly. The CAT is an annual tax imposed on the privilege of doing business in Ohio, measured by taxable gross receipts from most business activities. Most receipts generated in the ordinary course of business are included in a taxpayer’s CAT base. This tax applies to all types of businesses: e.g., retailers, service providers (such as lawyers, accountants, and doctors), manufacturers, and other types of businesses. The CAT applies to all entities regardless of form, (e.g., sole proprietorships, partnerships, LLCs, and all types of corporations). The ta...
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April 2012, Tax Management

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Mar

08

Claiming Depletion Deductions on Your Oil and Gas Income

Chris Zoller & David Marrison, Extension Educators, ANR and Peggy Hall, Director, OSU Agricultural & Resource Law Program Many landowners have received income as a result of leasing their land for oil and gas drilling, while others may also be receiving income from drilling in the form of royalty payments. This is income for tax reporting purposes is considered ordinary income and must be reported as such on your state and federal income tax returns. Many landowners have asked about available strategies for minimizing the tax liability associated with this new wealth. There are a number of ways landowners can potentially reduce their tax liability and be in compliance with the tax laws. Not all strategies are applicable to every situation, but landowners should give careful consideration to those that are available and maximize their tax savings. One tax management strategy is to claim a depletion deduction. The IRS recog...
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Financial Management, March 2012, Tax Management

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Mar

08

Considerations Prior to Signing a Pipeline Easement

Chris Zoller, Extension Educator, ANR for Tuscarawas County Thousands of dollars have been paid and a large number of acres across parts of Ohio have been acquired through leases for the exploration of oil and gas resources. Some of these areas are seeing drilling activity as a result of these leases. The next step in the process is acquiring easements for the purchase of land to construct pipelines to move the extracted minerals to locations where they can be processed. It is important for all landowners who are contacted about signing an easement to understand that an easement differs from a lease in many ways and comes with certain restrictions on the use of the land. A few years ago a 42” pipeline, known as the Rex Express Pipeline – East Project, was constructed through several Ohio counties. Prior to construction of this pipeline, the Ohio Department of Natural Resources Division of Soil and Water Conservation develo...
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Financial Management, Legal Issues, March 2012

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Mar

07

Lower Crop Insurance Premiums for Most Corn and Soybean Growers in Ohio

By: Barry Ward, OSU Extension, Leader, Production Business Management, Department of Ag, Env., and Dev. Economics Farmers throughout Ohio insuring corn and soybean yields or revenue with crop insurance should see lower premiums this year due to changes made by USDA’s Risk Management Agency (RMA). These changes were based on reviews of actuarial soundness of these crop insurance products. In recent years, premiums paid (farmer premiums plus USDA paid premium subsidies) have been higher than dollars in claims paid out. The Federal Crop Insurance Loss Ratio (Ratio of claims to premiums) is meant to equal 1.0 in the long term. With long-term loss ratios below this 1.0 benchmark for corn and soybean policies in most of the cornbelt, RMA chose to examine the soundness of these policies. This adjustment to premium rates recognizes the latest technology, weather, and program performance information. Updated data pertaining to prevented ...
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Farm Policy, March 2012

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Mar

07

Section 179 & Accelerated Depreciation Limits for 2012 and Beyond

By: David Marrison, Associate Professor and Extension Educator Over the past decade, Congress has repeatedly allowed faster depreciation of capital assets to stimulate business investment by providing a “bonus” depreciation allowance in the year the asset is purchased. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the depreciation bonus through 2012 to encourage new equipment purchasing. Section 179 Expensing and Accelerated First Year Depreciation allowances have allowed business to write off capital expenditures immediately minimizing taxable income or creating a loss from these schedules. I.R.C. § 179 expensing allows farmers to elect to deduct part or all of the cost of qualifying farm assets in the year they are placed in service. It applies to machinery, equipment, and special use or single purpose agribusiness buildings, such as bins, drying systems, and livestock b...
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March 2012, Tax Management

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Mar

07

Establishing a Crop-Share Lease Arrangement

By: Barry Ward, OSU Extension, Leader, Production Business Management, Department of Agricultural, Environmental, and Development Economics Although crop-share leases constitute a smaller percentage of total land leases today than they did 25 years ago, they are still an important type of lease arrangement in many areas. In a crop-share lease arrangement, the crop-share that each party receives should be proportional to the value contributed toward production. Market-based payment to each party is the basic concept for developing an equitable crop-share lease. An equitable crop-share lease should be developed following some basic rules or principles: 1. The landowner and operator should share total returns in the same proportion as they contribute resources (or total economic costs which includes accounting costs and opportunity costs.) 2. Variable expenses that increase yields should be shared in the same percentage as th...
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Farm Rents, March 2012

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Mar

07

AEDE New Faculty: Allen Klaiber

The Department of Agricultural, Environmental and Development Economics (AEDE) at The Ohio State University is welcoming several new faculty during the 2011-2012 academic year. This month we highlight Professor Allen Klaiber, who comes to us with his Ph.D. from North Carolina State University after previously serving on the faculty at Penn State. He teaches several key classes dealing with statistical methods, environmental and resource economics and regional economic development. A focus of much of his research is the valuation of environmental amenities using data from housing markets. Some of you may have seen him at the Farm Science Review in September, where he participated in the panel discussion on shale oil development in Ohio. In addition to being an economist, Allen is an avid birder and orchardist. Welcome Allen! Departmental Website: http://aede.osu.edu/about-us/our-people/h-allen-klaibe...
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Feb

20

Projected Prices for Crop Insurance Based on First Two-weeks of February

Gary Schnitkey, University of Illinois

During February, projected prices used in crop insurance guarantees applicable to Midwestern states are set for corn and soybeans. These projected prices are the averages of daily settlement prices of Chicago Mercantile Exchange (CME) contracts during February, with the December contract used for corn and the November contract for soybeans. Through the first two weeks of February, settlement prices have averaged $5.74 per bushel for corn and $12.35 per bushel for soybeans. Continue reading at: http://www.farmdocdaily.illinois.edu/2012/02/projected_prices_for_crop_insu.html

Farm Policy, February 2012

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Feb

15

State Treasurer Josh Mandel Supporting Ohio Farmers Through Ag-LINK

The Agricultural Linked-Deposit program (Ag-LINK) is sponsored by State Treasurer Josh Mandel. In an effort to help Ohio farmers offset the high costs of operating funds, Ag-LINK provides an interest rate reduction on loans or lines of credit up to $100,000. This program applies to farmers, including but not limited to traditional farming, aquaculture, livestock orchards and hydroponics. Ag-LINK has been increasing opportunities for Ohio farmers to operate and thrive for more than 25 years. As a result, Ag-LINK has helped more than 40,000 farmers receive reduced-rate financing on approximately $2.8 billion dollars. State Treasurer Josh Mandel is proud to support Ohio’s farmers through Ag-LINK. How Do Farmers Qualify? Eligible recipients must meet the following criteria: Be organized for profit Have headquarters and 51% of operations maintained in Ohio Obtain an operating loan or line of credit from an eligible bank or Farm Cr...
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February 2012, Financial Management

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Feb

15

Is 2012 the Year to Elect the Average Crop Revenue Election (ACRE)?

By: Chris Bruynis, Assistant Professor & Extension Educator

Ohio farmers have previously had three opportunities to elect into the Average Crop Revenue Election provision as create by the 2008 Farm Bill. Looking back, the question is was it a good decision for those farmers that elected in previously? There are many ways to answer that question. From a risk management perspective, the answer is yes. The downside revenue protection that was provided was worth the approximate $4.00 per acre in reduced direct payments. From a cash flow perspective, the answer is mostly no (except under certain circumstances) because the ACRE payments for wheat in 2009 and 2010 were not enough to offset the reduction in direct payments. Farmers are now into the fourth year and have the final opportunity to elect into ACRE provision. Click here to read Estimated ACRE Coverage Levels for 2012

Farm Policy, February 2012

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Feb

14

Trend-Adjusted Actual Production History (APH) Option Available

By: Chris Bruynis, Assistant Professor & Extension Educator Click here for a PDF version of the 2012 Trend Adjusted APH Farmers in Ohio purchasing certain types of crop insurance will be able to elect a new provision called Trend-Adjusted Actual Production History (TA APH). This provision will allow farmers the ability to raise their farm APH in line with current expected yields. If elected, this option would adjust the farm yield to reflect increases in yields through time in the county. Trend adjustments are made on each eligible yield within a qualifying APH database based on the county’s historical yield trend, which is provided in the county actuarial documents. The approved APH yield is calculated using trend-adjusted yields, as well as any other applicable yields, within the APH database. Many farmers feel that the 10-year average Actual Production History (APH) yields used to determine their multiple peril crop insur...
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Farm Policy, February 2012

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Feb

14

The Value of a CCA or CPAg to a Farm Business

By: Wm. Bruce Clevenger, OSU Extension Educator, CCA & Harold Watters, OSU Extension Field Specialist, CPAg/CCA In farm business, managers solicit the advice or opinion from people near and sometimes far from the farm location. These advisers may have a specialized understanding or experience that can help improve the farm operation. When it comes to agronomic crop recommendations, a farm’s adviser has the potential influence to impact crop yields, equipment purchases, farm operations, water quality and profitability. What are the extra letters seen following agronomy professionals that advise your farm? CCA stands for Certified Crop Adviser and CPAg stands for Certified Professional Agronomist. What’s the difference and why should I value their opinion? Certified Crop Advisers earned their certification by passing rigorous state and international exams. For Ohio, the tri-state exam includes Ohio, Indiana and Illinois...
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February 2012, Uncategorized

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Feb

06

Management for the Future

by Chris Zoller, OSU Extension Educator An excellent learning opportunity takes place on March 14 when OSU Extension – Tuscarawas County and the Tuscarawas County Farm Bureau sponsor a workshop, Farm Strategies for the Future, at the Dutch Valley Restaurant near Sugarcreek. Registration is at 9:30am, with the program to follow from 10am – 3pm. A dynamic group of specialists will discuss what changes farm managers can expect to see in the next decade and how they can adopt and implement these developments. Presentations will include: Dr. Scott Shearer, Chair of the Ohio State University Department of Food, Agricultural, and Biological Engineering, will discuss farms of the future and the emerging technology to manage these businesses. Chris Bruynis, OSU Extension Educator, ANR, will provide an overview of the Farm Bill and crop insurance and how farmers can use these tools to minimize risk. Dr. Jerry Lahmers, V...
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February 2012, Upcoming Events

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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