Business Commons^™

Feeder And Live Cattle Markets Face Mixed Signals As Fall Approaches, Elliott James Dennis

Center for Agricultural Profitability

As the cattle market reopened following Labor Day, feeder and live cattle futures weakened to contract low levels of resistance. The October feeder cattle contract ended on a down note at approximately $230, as the market continues to grapple with whether prices will rise this fall amid uncertainty over how many heifers will go through sale barns. A significant factor contributing to current market conditions is the deterioration of pasture conditions, which has led to expectations that some feeder cattle will be brought to market earlier. However, this impact is tempered by a large hay crop and the availability of …

Setting Custom Rates For Fall Harvest, Gelnnis Mcclure

Center for Agricultural Profitability

We’re approaching the fall harvest again, so harvest rates are a topic of interest. Custom rates for harvesting operations in Nebraska have continued to increase based on data gathered from the latest biennial Nebraska Custom Rates Survey completed in 2024. Custom rate figures are provided by operators who perform custom hire services and respond to the survey. The first several pages of Part II of the 2024 report provide custom rate figures for harvesting grains and soybeans, followed by updated figures for hauling operations for grain and hay. The report is one source custom operators may use to help determine …

Branching Out: Harnessing The Power Of Decision Trees, Jay Parsons

Center for Agricultural Profitability

In today’s world, full of risk and uncertainty, agricultural producers face a very challenging decision-making environment. Their decisions are often a complex sequence of choices made over time, during which uncertainties are revealed and additional information is gathered. A decision tree or decision flow diagram can aid in the decision-making process by providing a clear graphical representation of the sequence of events and relevant information.

A decision tree contains the relevant courses of action, event uncertainties, and potential outcomes in the order they are expected to occur through time. Like the decisions they are meant to represent, decision trees can …

Estate Planning: Stepped-Up Tax Basis, Anastasia Meyer

Center for Agricultural Profitability

A key consideration in estate planning is the transfer of assets to the next generation as 98% of farms are family owned and operated. Additionally, active operators or retired farmers own 75% of U.S. farmland (AgAmerica, 2023). As the average age of an operator increases, there is going to be a large transfer of farmland and other assets in the future whether by gifting, selling, or passing the farm to the next generation through inheritance.

Stepped-up basis is a tax provision that allows the value of an inherited asset to be adjusted to its fair market value at the time …

Reviving Trade Justice: How Arbitration Is Saving Wto Dispute Resolution (For Now), Christine Mcdaniel

Yeutter Institute International Trade Policy Review

Yeutter Institute Non-Resident Fellow Christine McDaniel provides her thoughts about how arbitration is saving World Trade Organization dispute resolution for the time being. She suggests that the dispute mechanism and the appeal process are not fully functioning, although a temporary solution has emerged, namely, arbitration and a speedy appeals process. She covers recent cases and options facing WTO members who have a complaint.

Terminating A Verbal Farmland Lease In Nebraska, Jessica J. Groskopf, J. David Aiken

Center for Agricultural Profitability

Some farm leases are not written but are verbal or "handshake" agreements. Because nothing is in writing, the parties may have different recollections of their agreement, making lease disputes more difficult to resolve. The most common legal issue associated with verbal farm leases is how a lease may legally be terminated. For verbal leases in Nebraska, six months advance notice must be given to legally terminate the lease. In contrast, the termination of a written lease is determined by the terms of the written lease. If the lease does not address termination, the lease automatically terminates on the last day …

Three Essays In Food Security And The U.S. Sugar Program, Jacob Michels

Dissertations and Doctoral Documents from University of Nebraska-Lincoln, 2023–

Chapter one devises an approach to adjust estimates of the number of food insecure for changes in sedentarism over time. Existing methodologies are biased upwards and date back several decades. We build a household model utilizing a Stone-Geary utility function, which rationalizes households shifting their labor decisions towards sedentary activities. Our comparative statics examine the impacts of changes in the productivities of sedentary types, as opposed to my physically demanding types, of activities and also their returns. Our empirical approach is informed by our theoretical model and comparative statics, in which we construct a unique pseudo-panel dataset. Sitting time serves …

Effect Of Beef Heifer Development Systems Utilizing Corn Residue And Late Summer Planted Cover Crops On Growth, Reproductive Performance, And Economics, Hannah F. Speer, Robert A. Cushman, Harvey Freetly, Jay Parsons, Jessica Windh, M. E. Drewnoski

Department of Agricultural Economics: Faculty Publications

The objective of this study was to evaluate growth and reproductive performance of heifers developed using 3 different winter systems in the midwestern U.S. Spring-born heifers (n = 1,156; 214 d of age; SD ± 17 d) were used in a 3-yr study to evaluate performance in winter development systems, which utilized cover crop (CC) and corn residue grazing. Heifers were assigned to 1 of 3 treatments: grazing corn residue with 0.77 kg/d dried distillers grains (CD) or 1.69 kg/d wheat midds (CW) supplementation followed by a grower ration in the drylot, or grazing late summer planted oat-brassica CC followed …

Cover Crop Utilization, Implications For Cropland Lease Arrangements In 2024, Jim Jansen, Jeff Stokes

Center for Agricultural Profitability

When planting a cover crop across Nebraska, the motivation of the landowner or operator may vary depending on the needs of the region or management requirements. Increased interest in cover crops in recent years has come from the perceived benefits to the land and mitigation of environmental issues. Cover crops reduce soil degradation (i.e. erosion) and enhance soil quality (i.e. organic matter and nutrient content). These effects may take multiple years to fully materialize but tend to persist for several years into the future. Grazing the cover crops or harvesting for forage are perceived as viable options for generating benefits …

Annual Forage Insurance Program Performance, Jay Parsons

Cornhusker Economics

In 2014, the Annual Forage Insurance Program (AFIP) was offered for the first time by the USDA – Risk Management Agency (RMA) as a pilot program for the states of Nebraska, North Dakota, South Dakota, Kansas, Oklahoma, and Texas. It was expanded to include Colorado in 2016 and New Mexico in 2017. This year marks the 10-year anniversary of the program, and the goal of this article is to provide a summary of where the program is and how it is being used. We will focus specific attention on Nebraska but also provide an overview of the national picture.

The …

Ideas For Estate And Transition Planning: Gifting Ownership, Jessica J. Groskopf

Center for Agricultural Profitability

For many farm and ranch families, bringing children or grandchildren into the operation is the ultimate goal. Successfully bringing additional family members into the operation may require some creativity as all parties need to maintain a viable standard of living. This article is part of a series that will highlight ideas and tactics for bringing another family member into the operation.

A strategy that is gaining popularity is the gifting of shares or a percentage of the business from the owner to their heirs. In this article, the person gifting shares, or ownership is called the donor, and the person …

The Growth Of Ethanol In Brazil: Sugarcane, Corn, And A Few Other Things, Fabio Mattos

Cornhusker Economics

Although we can expect more ethanol produced from corn in the coming years, it is unclear whether it will keep expanding at the same pace as in recent years or how much it will contribute to total ethanol production.

One point to keep an eye on is the typical dynamics of markets. If supply and demand conditions and price movements make corn-ethanol more profitable, ethanol plants in Brazil will keep increasing their production. If it makes more economic sense to produce corn-ethanol (as it happened recently), they will use more corn to produce ethanol.

Supply and demand conditions for ethanol, …

Exploring Producers' Willingness To Pay For Ecosystem Services: Three Essays On Soil Health, Location Preferences, And Cover Crop Adoption, Kaouter Essakkat

Dissertations and Doctoral Documents from University of Nebraska-Lincoln, 2023–

This dissertation comprises three essays: one assessing Midwest producers' willingness-to-pay (WTP) for soil health-enhancing ecosystem services (ES), another examining the impact of policy implementation locations on WTP, and a third identifying factors influencing producers' adoption of cover crops (CC).

The first essay pioneers the understanding of agricultural producers’ valuation of soil health-associated ES amid growing concerns of soil degradation due to agricultural intensification. Using a discrete choice experiment, this study assesses producers’ WTP for a policy that incentivizes ES provision, specifically improved water quality, carbon sequestration, and enhanced crop yield. Surveying producers across Iowa, Kansas, and Nebraska, our results show …

2024 Nebraska Agricultural Custom Rates With Statewide Survey Summary, Glennis Mcclure

Cornhusker Economics

The 2024 University of Nebraska-Lincoln Custom Rates Survey indicates that rate increases are the norm since the latest survey was completed in 2022. Table 1 provides a summary and percentage change for several common custom operations from 2022 to 2024. Custom field operations such as drilling and planting show increases in 2024 from seven to twenty-seven percent and harvesting rates for various crops indicate state average rate increases from fourteen to twenty-three percent, with the irrigated corn harvest now at $47.84 per acre for the state average. Other custom services, such as spraying for weed control using a self-propelled sprayer, …

Interest Rates: Suggestions For Management, Jay Parsons, John Hewlett, Jeff Tranel

Center for Agricultural Profitability

Last month’s RightRisk News discussed the significant economic pressures on the agricultural sector arising from persistently high borrowing costs over the last couple of years. While these costs are not historically high, the rapid increase in interest rates over the past two years has received significant attention. This month, we continue to address the issue of interest rates and interest expenses, offering suggestions for managers to explore.

What Do Ongoing High Interest Rates Mean For Ag Producers?, Jay Parsons, John Hewlett, Jeff Trandel

Center for Agricultural Profitability

As we progress through 2024, the agricultural sector faces significant economic pressures from persistently high borrowing costs.

In the crop sector, smaller cash buffers and the need to preserve working capital due to tightening profit margins resulting from lower crop prices and higher input costs contributed to an increase in farm operating loan activity in the first quarter of 2024 (Kansas City Federal Reserve). Farm machinery and equipment costs also rose considerably in the last few years. As a result, loans to purchase such equipment are larger and the higher interest rates only complicate the purchase decisions even further. Farmers …

2024 Nebraska Custom Rates: What To Charge?, Glennis Mcclure

Center for Agricultural Profitability

The 2024 Nebraska Custom Rates Report, which offers insights for agricultural producers and service providers, is now available through Nebraska Extension and the University of Nebraska-Lincoln’s Center for Agricultural Profitability. The report, published at cap.unl.edu/customrates, compiles survey data from 159 respondents, providing current market rates for 138 different custom operations and services across Nebraska.

This comprehensive resource serves as an essential guide for those offering and seeking custom agricultural services. While the report offers a detailed overview of market trends, custom service providers are encouraged to consider their own operational costs when determining their rates.

Agricultural custom rate charges …

2021 Nebraska Feedlot Labor Survey, Kimberly J. Enger, Elliott James Dennis, Galen E. Erickson, Andrea Watson

Center for Agricultural Profitability

The Nebraska Feedlot Labor and Management survey, conducted by Nebraska Extension and Nebraska Cattlemen., reveals notable changes in labor costs and compensation within the state's feedlot industry. From 2015 to 2021, total employee compensation across all feedlots nearly doubled, highlighting significant financial shifts in the sector. Despite this increase, wages have not kept pace with inflation, indicating ongoing economic challenges. The survey, which also sheds light on hiring difficulties and management practices, provides a crucial benchmark for feedlot operators to navigate labor costs and industry trends effectively.

Aging In Place In Rural Nebraska: Homecare Worker Cooperatives, Cythia Houlden

Center for Agricultural Profitability

In 2022, the Nebraska Cooperative Development Center (NCDC), in partnership with the Northwest Cooperative Development Center of Washington state, introduced a six-week Homecare Worker Cooperative Academy designed to take caregivers through the worker cooperative development process. Topics covered by the academy included democracy in the workplace, business basics, marketing and member engagement.

The impetus for the academy was the realization that Nebraska — and the U.S. as a whole — are facing a potential elder care crisis.

The Basics Of Loans For Farmers And Ranchers, Jessica Groskopf

Center for Agricultural Profitability

Borrowing a loan can be a useful tool for farmers and ranchers, especially to fill in gaps when cash or working capital is short to cover current obligations or to make necessary or planned capital purchases. Before signing for a loan, understand the loan terms and repayment requirements as spelled out in the loan documents. This article defines and explains important lending terminology and considerations for farmers and ranchers.

Economic Research On Ethanol Feed-Use Coproducts: A Review, Synthesis, And Path Forward, Elliott James Dennis, Daniel Gertner, Galen E. Erickson

Department of Agricultural Economics: Faculty Publications

During the mid-2000s to the early 2010s, the domestic ethanol industry witnessed substantial growth, with ethanol coproducts emerging as vital elements for plant profitability and livestock feeding. Initially serving as supplementary revenue streams, coproducts from ethanol production have evolved into diverse value-added offerings, bolstering revenue streams, and sustaining profit margins. This study reviews existing economic research on ethanol coproducts, detailing methodologies, product focus, and research locations. Initially gathering 972 articles from 9 databases, 110 articles were synthesized. We find that most studies primarily examined the growth and future of the ethanol industry with a limited focus on specific coproducts. Feed-use …

Health Prompts Affect Consideration Of Health But Not Intertemporal Preferences While Promoting Healthier Food Choices, Olivier Tuyizere, Christopher Gustafson, Devin J. Rose

Department of Agricultural Economics: Faculty Publications

Diet-related diseases impact populations across the globe. While intertemporal preferences—a fundamental preference for the distribution of benefits across time—have been used to explain low-quality food choices, the recent literature proposes another cause: inattention to the future implications (or opportunity costs) of the options faced. Food choices tend to become habitual to conserve cognitive resources, rather than carefully modeling future health impacts. Both low discount rates for future benefits and attention to future health impacts predict healthier decisions. While intertemporal preferences are stable, attention may provide an opportunity to intervene in the decision process to promote healthier decisions. In this study, …

Ideas For Estate And Transition Planning: Gift Leaseback, Jessica Groskopf

Center for Agricultural Profitability

Simply gifting assets helps reduce estate value and potential taxes for the owners and increase the wealth of the heirs. However, some families are hesitant to engage in gifting strategies because the farm or the ranch needs access to those assets to remain viable. This article expands on gifting strategies by combining gifts with a lease agreement.

North Central Extension Risk Management Education Center Helps Producers Manage Risks, Christine Lockert, Sheila Aikanathan Johnson, Bradley D. Lubben

Cornhusker Economics

Established in 2001, the North Central Extension Risk Management Education Center (NCERMEC) has a long history of supporting risk management education programs serving producers in the region. Located at the University of Nebraska-Lincoln Agricultural Economics Department, the Center is one of four regional Extension Risk Management Education (ERME) Centers located throughout the country. ERME is funded through USDA’s National Institute of Food and Agriculture (NIFA) and was authorized by the Agricultural Risk Protection Act of 2000. The fundamental purpose of the ERME program is to educate producers to manage risk and position their farm or ranch for future growth and …

The Economic Impacts Of Social Activism And Corporate Social Responsibility On Food Fraud, Anubrata Deka, Amalia Yiannaka, Konstantinos Giannakas

Department of Agricultural Economics: Faculty Publications

The study examines the relationship between the corporate social responsibility (CSR) investments of a food firm, an activist’s incentive to target the firm to uncover and deter fraudulent behavior, and the firm’s incentive to commit food fraud. Specifically, we develop a game theoretic model to analyze the strategic interaction between a food firm that decides whether to provide a credence food attribute and whether to misrepresent the quality of its product, and an activist who decides whether to monitor the firm and launch a campaign to uncover and remove false/misleading quality claims. We further examine the effect of CSR and …

Government Program Decision Analysis In Nebraska At The Farm Level, Tatum R. Brunkow

Department of Agricultural Economics: Dissertations, Theses, and Student Research

The one-year extension of the 2018 Farm Bill until September 30, 2024, has extended several government programs for the 2024 crop year including those in Title I: Commodities. This analysis looks at three different financial scenarios and analyzes five different alternatives for a case farm to select the optimal farm program decision for the operation by evaluating net farm income. Since 2021, eligible producers have been able to elect either Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) for their operation on an annual basis. Support levels for these programs are trending close together making the election decision more …

The Future Of The Organization Of The Petroleum Exporting Countries, Mikayla Gross

Honors Theses

The Organization of the Petroleum Exporting Countries (OPEC) is a multinational and intergovernmental organization that dictates the petroleum exportation policies of 13 countries: Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, the United Arab Emirates and Venezuela (About Us, 2023). The mission of OPEC is to ensure a stable supply of petroleum through its shared policies for its Member Countries and consumers (Our Mission, 2023). Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela founded OPEC in 1960 under the foundations and principles that dictated the international world order. Those foundations and principles …

Ideas For Estate And Transition Planning: Gifting, Jessica Groskopf

Center for Agricultural Profitability

For many farm and ranch families, bringing children or grandchildren into the operation is the ultimate goal. Successfully bringing additional family members into the operation may require some creativity as all parties need to maintain a viable standard of living. This article is part of a series that will highlight ideas and tactics for bringing another family member into the operation. If this is the first article you are seeing in this series, I would encourage you to go back to the previous article for background and additional guidance.

The second tactic to transfer wealth between generations is gifting. The …

Net Farm Income Impacts Net Worth Growth, Glennis Mcclure

Center for Agricultural Profitability

The beginning of the year is busy for businesses in finalizing records and filing annual income taxes. Farm and ranch operations are no exception. Beyond the net income or loss showing on the farm’s Schedule F, analyzing the true picture of the operation’s net farm income, and earned net worth change for the year is important.

Preparing an income statement using accrual adjustments will tell us more about the operation’s profitability and performance beyond what income tax statements provide. The income statement tells the story of revenue, expenses, and depreciation between the beginning of year balance sheet and the end …

Can Machine Learning Models Provide Accurate Fertilizer Recommendations?, Takashi S. T. Tanaka, Gerard B. M. Heuvelink, Taro Mieno, David S. Bullock

Department of Agricultural Economics: Faculty Publications

Accurate modeling of site-specific crop yield response is key to providing farmers with accurate site-specific economically optimal input rates (EOIRs) recommendations. Many studies have demonstrated that machine learning models can accurately predict yield. These models have also been used to analyze the effect of fertilizer application rates on yield and derive EOIRs. But models with accurate yield prediction can still provide highly inaccurate input application recommendations. This study quantified the uncertainty generated when using machine learning methods to model the effect of fertilizer application on site-specific crop yield response. The study uses real on-farm precision experimental data to evaluate the …