Business Commons^™

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 …

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 …

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 …

Will Saf Turbocharge The Corn Ethanol Market?, Richard Perrin, Lilyan Fulginiti, Felipe Miranda De Souza Almeida

Cornhusker Economics

The long-run outlook for the corn ethanol industry is questionable, due to a transition to electric and hybrid vehicles. One source of hope for the long run is the potential demand for producing Sustainable Aviation Fuel (SAF). SAF is a key component in the United States Aviation Climate Action Plan, a path to net-zero greenhouse gas (GHG) emissions in the aviation industry by 2050. Demand for ethanol for SAF offers hope to the ethanol industry, but it depends a great deal on policy decisions that are being made now. Here we sketch out this story.

Based on the information available …

Retaining Heifers: Is It Worth It?, Tonya L. Meyer

Center for Agricultural Profitability

Replacing females in the beef cow herd plays a pivotal role in a sustainable and profitable cow-calf operation. Analyzing the cost of raising replacements versus purchasing them can help make informed decisions. If retaining replacements, cattle producers must consider both the costs and potential returns associated with raising and integrating these heifers into the breeding herd. This article offers some key financial considerations.

Value Of Gain In The Lamb Feeding Industry, Jay Parsons

Cornhusker Economics

Value of gain (VOG) is a term in the livestock feeding industry that refers to the average value of a pound of gain. It is the most appropriate revenue value to use in comparison to the cost of gain to determine profit margin.

2022 Census Of Agriculture: Nebraska Highlights, Kathleen Brooks, Bradley Lubben

Cornhusker Economics

In February 2024, the United States Department of Agriculture National Agricultural Statistics Service published data from the 2022 Census of Agriculture. This data is collected every five years. The current article highlights a few of the Nebraska numbers. Two significant highlights from the data are the total number of farms and the total value of production. U.S. farm numbers declined modestly in the U.S. from 2.04 million in 2017 to 1.90 million in 2022. The total value of production for U.S. farms and ranches increased substantially from $388.5 billion in 2017 to $543.1 billion in 2022. Crop production accounted for …

Bull Value Cow-Q-Lator (Bvcql): What It Is And How To Use It, Matt Stockton, Shannon Sand, Randy Saner

Center for Agricultural Profitability

It’s that time of year when commercial ranchers and cattle producers are looking to make bull purchases for their operation. With so many different breeds and types of bulls available, picking the right bull at the right price is not easy. To help in making the best selection possible the University of Nebraska-Lincoln Beef Economics Team created the Bull Value Cow-Q-Lator (BVCQL). This tool can be used to compare your current bull value with up to 10 bulls. The Bull Value Cow-Q-Lator is a spreadsheet available to download at https://cap.unl.edu/livestock/tools.

Each ranch or farm is going to have different …

Increasing Workforce Skills: The Possible Disconnect Between Employers And Potential Job Seekers, Cheryl A. Burkhart-Kriesel

Cornhusker Economics

In a multi-year survey of potential job seekers, those who are likely to change jobs in the next year or who are likely to reenter the workforce in the next year, several key training obstacles for improving their employment situation were identified. There seemed to be only slight differences in how they viewed these challenges, regardless of whether they saw their potential job as a career, a steppingstone to a career, or just a job to get by. The cost of training, the lack of available training, the distance or transportation to the training, lack of time, and the knowledge …

Paying Family Members On The Farm Or Ranch, 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 is the first in a series of articles that will highlight ideas and tactics for bringing another family member into the operation.

One tactic is to provide new family members with monetary compensation, such as an hourly wage or salary. The total compensation should be comparable to the market value of wages to hire a non-family member to do …

The Importance Of Strategic Planning For Farmers And Ranchers, Larry Van Tassell

Center for Agricultural Profitability

Planning, or more specifically, strategic planning, is a process of defining long-term goals and objectives of an organization and determining the best course of action to achieve them. It involves such steps as defining the current situation, identifying strengths, weaknesses, opportunities, and threats, and developing a plan of action to take advantage of opportunities and overcome challenges. Parsons (2018) outlined six key components of a business plan and why a farm or ranch should make the effort to develop a business plan.

Slight Cost Of Production Changes Noted In The 2024 Nebraska Crop Enterprise Budgets, Glennis Mcmclure

Cornhusker Economics

The Nebraska crop budgets are available for the 2024 production season. The 84 enterprise budgets prepared in the October 2023 timeframe use input prices collected as of that time. Overall, estimates reflect slight cost of production decreases in the budgets when compared to the 2023 cost estimates. For 2024, the main drivers of cost decreases are due to decreased fuel and fertilizer costs. In some cases, pesticide costs decreased, yet for some of those products, prices increased. Seed and interest costs have increased for 2024 adding to cash expenses, while land opportunity costs and depreciation costs have continued to rise …

Program Requirements For Beef Cattle Certified As Usda Organic, Carsten Loseke, Elliott James Dennis

Cornhusker Economics

This document provides an overview of the use and production of the USDA Certified Organic program for the beef cattle industry, with an emphasis on the state of Nebraska. We detail what cattle qualify, feed requirements, medical and health standards of cattle, and premiums paid by consumers for USDA certified organic products. All information is taken from the Organic Foods Production Act Provisions available in the Federal Register.

One-Participant 401(K): Saving For Retirement And Reducing Taxes, Jessica Groskopf, Cory Walters, Doug Nelson

Center for Agricultural Profitability

The adage that farmers and ranchers are often asset-rich and cash poor does indeed appear to be true! According to the United States Department of Agriculture (USDA), just forty percent of farmers contribute to a retirement plan. And because many farmers and ranchers invest profits in their business rather than take a high salary, they show little income on their tax returns. This means they will have paid less into Social Security and their benefits will be lower when they retire. This can create cash flow challenges, especially for an older generation of farm and ranch families wanting to bring …

One-Participant 401(K) As A Tool For Farmers And Ranchers, Jessica Groskopf, Cory Walters, Doug Nelson

Center for Agricultural Profitability

According to USDA, only 40% of farm households participate in some type of retirement account. For self-employed farmers and ranchers without full-time employees, the opportunity to invest in a One-Participant 401(k) plan is a way to (1) save money for retirement, (2) reduce taxable income, and (3) provide the potential option to borrow from the plan. This series of articles will review these features.

What is a One-Participant 401(k)?

The One-Participant 401(k)is a qualified retirement plan designed specifically for business owners with no full-time employees other than the business owners and their spouses. Visit with your financial planner and tax …

What Happens To Your Farm Or Ranch If You Become Disabled?, Jessica Groskopf

Center for Agricultural Profitability

Estate and transition planning often focuses on what happens to the farm or ranch at the death of a key person. However, a good estate and transition plan should also include contingencies for disability. Planning for a disability is not an easy task because the severity and duration of the disability are unknown. This article offers some key items to have in place to protect you and your operation from disability.

What Did Higher Profit Cow-Calf Producers Do To Be More Profitable?, Randy Saner

Center for Agricultural Profitability

Cow-calf producers are always looking at ways to cut costs and improve profits. Looking at recent data from the University of Minnesota Center for Financial Management, FINBIN Livestock Analysis for 2022 representing cow-calf operations from Nebraska, South Dakota, and North Dakota can provide producers with some ideas on ways to improve profitability.

2024 Nebraska Crop Budgets — A Mixed Review With Some Costs Higher, Some Lower, Glennis Mcmclure

Center for Agricultural Profitability

While field operation costs are projected higher for the 2024 Nebraska crop enterprises, some material input costs are lower than were projected for 2023. One driving force on lower cost projections for 2024 is 20% to 40% less on fertilizer prices is factored in on many budgets, and five pounds less nitrogen fertilizer was entered for a majority of the corn budgets due to continued improvement of application practices. Cost scenarios for individual producers can vary based on their timing of input purchases and price variabilities. The 84 1Nebraska crop budgets are now available online in three formats with a …

What Is Irs Section 180 And How Does It Work?, Shannon Sand

Center for Agricultural Profitability

With recent land purchases, some are asking questions to learn more about IRS Section 180 and how it may provide tax deductions in the year of purchase. Let’s explore more about this tax code.

What is this code, you may be asking yourself, and what may it have to do with the purchased ground?

How Much Nebraska Ag Land Is Owned By Foreign Entities?, Larry W. Van Tassell

Center for Agricultural Profitability

The Agricultural Foreign Investment Disclosure Act of 1973 (AFIDA) established a mandatory reporting system, overseen by the USDA, that requires foreign entities to provide information on all U.S. agricultural and non-agricultural land in which they hold an interest. “Interest” is reported as a fee interest (legal possession of both the surface and mineral rights), partial fee interest (must state percent ownership), life estate, trust beneficiary, purchase contract, or other. “Other” includes leases that are 10-years or longer. The regulations exempt foreign entities with interests solely in mineral rights and leases of less than 10 years in duration from reporting. In …

Do Only Americans Own America? Foreign Investment In Agricultural Lands In The United States, Larry W. Van Tassell

Center for Agricultural Profitability

Foreign investment in the United States, while not a new phenomenon, has recently caught the attention of the American public and members of the U.S. House and Senate after an Air Force officer raised concerns when the Fufeng Group, based in Shandong, China, purchased 300 acres of farmland 12 miles from an Air Force base in Grand Forks, North Dakota, to build a corn milling plant (Javers, 2022). National security concerns prompted the U.S. Senate to propose a bill prohibiting the purchase of land in the U.S. by companies or individuals from China, North Korea, Iran, or Russia.

Usda Reports On Land Values And County-Level Cash Rent Estimates Across Nebraska In 2023, Jim Jansen, Jeff Stokes

Center for Agricultural Profitability

Survey findings from the USDA-National Agricultural Statistics Services (USDA-NASS) estimated that Nebraska farm real estate value, including all agricultural land and buildings, in 2023 increased by 13.1% to an average of $4,240 per acre (Figure 1). The year-over-year increases mark an increase of $490 for this annual period (USDA-NASS 2023a). Kansas and New Jersey lead the nation for the highest rates of increase in the market value of farmland at 16.3% and 14.9% for market value averages of $3,060 and $17,700 per acre. Nebraska marked the fifth-highest percentage increase for rising farm real estate when ranked against the other states.

Insurance, Policy, And Education For Livestock Producers, Milan Chauhan, Bradley Lubben

Cornhusker Economics

Federal crop insurance programs have existed since the 1930s, but for livestock producers, federal insurance programs were virtually nonexistent until the past 20 years. Livestock producers may not face exactly the same production risks that crop producers face, but they do face similar production risks related to grazing capacity and forage production and of course face price risks just like crop producers do.

Nebraska Crop Budgets 2024, Robert N. Klein, Glennis Mcmclure

Department of Agricultural Economics: Presentations, Working Papers, and Gray Literature

The 2024 Nebraska Crop budget projections were created using cropping practice norms for many producers in Nebraska. However, each individual farming operation is unique, and these budgets should be used only as a guide. The budgets for 2024 are available in the Agricultural Budget Calculator program at:https://agbudget.unl.edu/. To modify these budgets, you can download UNL budgets into your ABC program account or create your own. In addition, the reports for each of the 2024 crop budgets are saved as printable (PDF) files. See also the new budget calculator at https://cap.unl.edu/abc.

The following individuals contributed to these budgets …

Are You A Farmer Or Rancher Over 18? It’S Time For An Estate Plan, Jessica J. Groskopf

Center for Agricultural Profitability

Often, the risk of failure for a farm or ranch caused by the death or disability of a young person is much greater than the loss of an older member of the operation. The loss of a young person is usually unexpected. Young people are often not as financially stable, have young families, and provide the bulk of manual labor. Estate planning is something anyone over the age of 18 should do, regardless of how little or how much they have in assets.

Marketing Calves With Blemishes, Randy Saner

Center for Agricultural Profitability

Selling these calves with blemishes or color differences could improve your profit if you follow some of the recommended steps. However, it could also be a complete disaster, unless you understand the risks and work to reduce them. Traditionally, about one-half the value of beef is added after cattle leave the farm. Keeping those calves on the farm longer gives you the chance to retain more of the income for the same calf. Most calves with blemishes or differences in color won’t affect their quality of meat if fed right.

Ag Lenders Offer Insight On Conditions For Nebraska Livestock Producers, Jay Parsons

Center for Agricultural Profitability

In 2017, the University of Nebraska-Lincoln’s Institute of Agriculture and Natural Resources (IANR) and Nebraska Extension made a commitment to implement a multidisciplinary Beef Systems Initiative (BSI) to develop and support implementation of beef production systems in Nebraska. In addition to the BSI, a parallel project funded by the Foundation for Food and Agriculture Research (FFAR) implemented a study of the best practices for incorporating beef cattle onto cropping systems while improving ecosystem services to ensure sustainability.

As a component of the FFAR project, an agricultural lenders panel was formed to provide input and feedback to UNL researchers on the …

High Culling Continues To Impact Beef Market, Elliott James Dennis

Center for Agricultural Profitability

The annual fall feeder run is about to begin. Given cattle prices, forage conditions, and the economy the question of whether heifers will be retained to rebuild the beef cow herd remains uncertain. Consider these factors that give pause to whether this expansion will occur with as much momentum we might think.

Tax Accounting Vs. Managerial Accounting: What Is The Difference And Why Does It Matter?, Shannon Sand, Matt Stockton

Center for Agricultural Profitability

Understanding your farm's finances is critical to making sound decisions and positioning your operation for success. But the accounting methods used for tax purposes don't always provide the information needed to properly manage your business.

This article lays out how tax accounting focuses on external reporting and follows rules aimed at calculating taxable income. In contrast, managerial accounting looks inward, capturing the data needed to analyze production costs, cash flows, capital investments, and overall profitability.

Remote Work Is Not Going Away: How Can Rural Communities Take Advantage Of This Opportunity?, Cheryl A. Burkhart-Kriesel

Cornhusker Economics

Since the COVID-19 pandemic as of 2020, are we looking at a national remote work “new normal” with a hybrid office and remote work combination as an additional option? This is an important question for rural areas. Discusses remote work trends and steps needed to leverage remote work in the rural context.