Agricultural Economics Commons^™

Managing Farm/Ranch Transfer To Next Generation, Allan Vyhnalek

Cornhusker Economics

The first step to have the next generation come back to the farm or ranch is to get them there. The next step is to keep them there. This requires thought about how to transfer management and ownership of the operation over a period of time. Four phases of transfer have been identified and are discussed in this article.

The first phase is Testing. Before transferring management and ownership, the current owner needs to feel like the younger generation is ‘tested’ or able to effectively help with the operation. One older farmer said to me, “I think my sons want …

Accounting For Risk: Agricultural Land Leases And Natural Disasters, Jim Jansen, Jeffrey Stokes

Cornhusker Economics

According to recent findings from the USDA Agricultural and Resource Management Survey, agricultural land rent totaled $2.44 billion in Nebraska for 2018. The survey found rent as the third largest farm and ranch production expense (USDANASS 2019). Natural disasters limiting the ability of farmers or ranchers to fully utilize rented land pose a financial risk to these operators.

The 2019 floods and related natural disasters lave left many landlords and tenants across Nebraska wondering how resulting damages will influence their agricultural properties . Contractual lease arrangements may have not fully accounted for these natural disasters. This article provides guidance on …

2018 Nebraska Top Efficient Farms, Tina N. Barrett

Cornhusker Economics

A quarter doesn’t buy much these days so it’s easy to dismiss the value, but when 25 cents is what separates the cost of production per bushel of corn between two groups, the difference in net return starts to add up.

In 2018 the net farm income average of all farms included in the Nebraska Farm Business, Inc. group was $94,121. That was a surprisingly high number, but when compared to the net income of $261,059 for the group called the Top Efficient Farms, it shows there is a significant difference. The Top Efficient Farms group is a selection of …

Effects Of Late Gestation Supplementation And Creep Feeding On Spring Calving Beef Cows In The Nebraska Sandhills, Devin Lynn Broadhead

Department of Animal Science: Dissertations, Theses, and Student Research

The objectives of this research were to 1) evaluate the effects of late gestation supplementation, synchronization and creep feeding on cow and calf production traits 2) evaluate the pooled effects of 5 studies involving late gestation supplementation on cow and calf traits. Experiment 1 was a three year study conducted on 8 pastures at the Gudmundsen Sandhills Laboratory. Cows were assigned to 1 of 4 late-gestation supplementation treatments, postpartum progestin or control, and 1 of 2 creep feed treatments to make up a 4 x 2 x 2 factorial arrangement. Calves were followed through to slaughter.

Experiment 2 involved 5 …

Ag Lease Termination And Hunting Rights, J. David Aiken

Cornhusker Economics

There are many questions regarding the differences between written and unwritten agricultural land leases for cropland and for pasture. This Q&A explores some of the more important differences, focusing on lease termination requirements and the status of hunting rights on leased cropland and pasture. How are cropland leases terminated in Nebraska? That depends on the type of cropland lease. If it is a written lease, the lease terminates according to its terms. If the lease does not address how the lease is terminated, it automatically terminates without notice on the last day of the lease (no six- months notice requirement). …

The Economic Evaluation Of Input Use Prescription Maps: Are You Paying To Make Less Profit?, Grant Edward Gardner

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

Variable Rate Prescriptions used by farmers to apply agricultural inputs are largely privatized and are normally seen only by the farmer that applies the prescription and the consultants whom create the prescription maps. Farmers need a way to evaluate the prescriptions that are being applied to fields. This paper explores modeling techniques which could be applied by farmers to determine the profitability of a particular consultant. Regression modeling is used on field trials which have been divided into site-specific management zones (SSMZ) based on a consultant’s variable rate prescriptions. Production functions are created for each management zone. The production functions …

Which Credence Production Attributes Do Consumers Prefer? The Case Of Milk, Emmanouil Petrakis

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

The interest of consumers for non-traditional food production attributes like antibiotics free and animal welfare have made consumer preferences more complex. These new attributes, usually non-identifiable by inspection or experience of the product are called credence attributes. The objectives of this study are to analyze consumer preferences for milk production attributes by eliciting the relative importance of these attributes for consumers, and to identify possible sources of heterogeneity related to consumer characteristics and actual purchase data. The research method used to elicit consumer preferences is Paired Comparison Method. Consumers from California and Texas were administered the online survey questionnaire in …

The Value Of Grazed Corn Residue For Crop And Cattle Producers, Jay Parsons, D. D. Redfearn, Mary E. Drewnoski

Cornhusker Economics

The Western Corn Belt has historically been corn and wheat cropping systems with cattle integrated on nearby grasslands. Recent agricultural production data ranked Nebraska, South Dakota, Kansas, and North Dakota in the top 10 states for both corn and beef cattle production in the United States. In 2017, these four states had about 20% of the beef cow inventory in the United States with Nebraska alone having 1.9 million beef cows (USDA National Agricultural Statistics Service, 2018). Forage-based livestock production is a fundamental component of these agricultural economies. However, a large quantity of grasslands in this region were converted into …

2019 Nebraska Property Tax Issues, J. David Aiken

Cornhusker Economics

Nebraska property taxes are the tenth highest in the United States, sales taxes are the ninth lowest, and both income taxes and total state taxes are in the middle. Property taxes account for 38% of total state and local tax collections in Nebraska, the highest of any tax. Sales taxes are 29% of total tax collections, and income taxes are 26%. If property taxes, sales taxes and income taxes were equalized as sources of state and local revenue, property taxes would need to be reduced over $600 million.

Sixty percent of property taxes go to K-12 education funding. Nebraska state …

The World Is In Better Shape Than Most People Think, E. Wesley F. Peterson

Cornhusker Economics

Steven Pinker (2018, page 40) reports that “… large majorities in eleven developed countries said ‘the world is getting worse’ and in most of the last forty years a solid majority of Americans have said the country is ‘heading in the wrong direction.’” Recent polls conducted by the Pew Research Center show that Americans are pessimistic about the future (Gramlich, 2019) and that around the world many people are dissatisfied with the way democracy works in their countries (Wike et al., 2019). According to Twenge (2019), the level of happiness in the United States has been trending down for the …

The Economic Evaluation Of Input Use Prescription Maps: Are You Paying To Make Less Profit?, Taro Mieno, Grant Gardner

Cornhusker Economics

Technological advances in data collection and analysis engines have made variable rate input use application much more common. Producers typically purchase software that produces site-specific prescription maps or purchase maps from consultants. The process of generating prescriptions maps is typically black-box, i.e. the process is unknown. Does using these purchased maps lead to more profits for producers?

This article discusses a method of verifying the economic profitability of site-specific prescription maps using an on-farm field experiment and statistical and economic analysis. A 76-acre field in Crawford County, Ohio is used for the study.

The maps on the following page are …

Cover Crop Utilization Across Nebraska And Implications For Cropland Lease Arrangements In 2019, Jim Jansen, Jeffrey Stokes, Jay Parsons

Cornhusker Economics

The Nebraska Farm Real Estate Market Survey and Report 2018-2019 provides insight on recent trends in the market value of land and cash rental across the state. Each year the special feature section from this report covers topics on new or emerging issues related to the agricultural land industry in Nebraska. These topics reflect interest expressed by panel members and readership of the Nebraska Farm Real Estate Market Highlights Reports. The special feature section in 2019 focuses on trends and considerations for cover crops across Nebraska and implications on cropland lease arrangements.

Findings from the 2017 Census of Agriculture in …

The Impact Of Different Data Processing Methods On Site-Specific Management Recommendation, Zhengzheng Gao

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

Understanding the impact of different data processing methods on site-specific management recommendation is vital to famers and consultants. This thesis investigates how data processing methods affect variable selection in production function estimation and the consequent economically optimal input use recommendation map. We utilized LASSO, a regression analysis method for feature selection. Data are collected from two years of on-farm trials from the same field in Hamilton county, Nebraska. Results suggest that the feature selection process and final recommendation about seed and nitrogen rates can be very sensitive to the way we process and analyze data, and the effects can be …

Dealing With Control Of The Farm/Ranch, Allan Vyhnalek

Cornhusker Economics

As I have traveled the state presenting farm and ranch succession/transition workshops, I’ve run into several family situations where the older generation is lucky enough to have the next generation come back to the farm. The younger generation, in some instances, is not that young anymore and have formed knowledgeable opinions about how the farm or ranch should operate. I wrote this article to challenge both the younger and older generations as they move their operation forward as a family.

Long term family cohesiveness can become challenging if there are control issues within the family. The younger generation often brings …

Will “Matopiba” Change The Competitive Landscape In The International Grain Market?, Fabio Mattos

Cornhusker Economics

In a previous article in this space (on 6/20/2018), I discussed changes in the corn market and highlighted how the rapid growth of the Brazilian winter crop has been reshaping the market within Brazil and abroad. However, since corn exported by Brazil comes mainly from the country’s center-west, its competitiveness in the international market is grossly impacted by the transportation infrastructure in Brazil. The same issue applies to Brazilian soybeans as well.

The development of a new agricultural frontier in Brazil, in a region known as Matopiba, may help Brazilian grain become more competitive and bring more changes to the …

Expanding The Farm Income Safety Net, Bradley D. Lubben

Cornhusker Economics

When the 2018 Farm Bill was passed in December, producers were looking ahead to implementation and thinking of the coming decision between enrollment under the Agricultural Risk Coverage (ARC) program or the Price Loss Coverage (PLC) program. With continued low price projections at the time, the safety net decision may have seemed relatively straight-forward. Now, with all of the weather and market challenges in 2019 coupled with ad hoc assistance expected from the federal government, the safety net and the decisions related to it have become exceedingly complex. A look at the wide and expanding safety net for crop producers …

Nebraska Property Taxes And The 2019 Flood, J. David Aiken

Cornhusker Economics

Much of eastern and central Nebraska suffered devastating flooding in March 2019. Much agricultural land, as well as agricultural, residential, industrial and commercial property has been damaged or destroyed. A 2019 bill just enacted— Legislative Bill 512—allows property owners suffering significant flood damage to have the 2019 property taxes on flood damaged property lowered.

Under prior Nebraska law, land and buildings were valued for property tax purposes on January 1 of each year. There were no statutory provisions for changing that property valuation after January 1 due to property damage, although some county assessors have done so in the past. …

Point-Of-Decision Prompts And Cognitive Resources, Christopher R. Gustafson

Cornhusker Economics

Many of us have long-term goals to maintain or achieve a healthy body weight. However, most of us have a hard time following through on these plans. Maintaining a healthy body weight requires constant consideration of the future consequences of our current actions, which are shaped by our immediate desires, such as eating the tasty-looking brownie at the coffee shop or relaxing after a long day of work instead of forcing ourselves to go to the gym. The difficulty in balancing short-term and long-term goals is reflected in the change in the average American body type over the past five …

Four Steps To Improved Group Productivity, Cheryl A. Burkhart-Kriesel

Cornhusker Economics

Just ask anyone - people waste a lot of time in meetings – all kinds of meetings. The meetings could be work related, within community organizations or even within a family. They can be anywhere people get together and want to go beyond a discussion and move toward action. Groups, both large and small, often discuss important issues but many times the conversations are all over the place or they are so short that decisions are often hard to make due to the lack of clarity and focus in the discussion.

Want to change that situation? If so, here is …

North Central Extension Risk Management Education Center, Christine Lockert, Cheryl Griffith, Bradley D. Lubben

Cornhusker Economics

After several years of growing agricultural prosperity and U.S. net farm income that peaked at almost $124 billion in 2013, the most recent forecast from UDSA's Economic Research Service projects net farm income at less than $70 billion for 2019. The six-year cumulative decline since 2013 is primarily due to a drop in commodity prices, a result of growing supplies, and more recently, trade conflicts and declining exports for key commodities. While the aggregate financial position of U.S. agriculture remains relatively strong with an aggregate debt-asset ratio of less than 14% (USDA-ERS, 2019), total debt has grown while profit margins …

A Successful Year For The Nebraska National Agri-Marketing Association, Austin Harthoorn, Kara Heideman, Rosalee A. Swartz

Cornhusker Economics

The University of Nebraska-Lincoln National Agri- Marketing Association (NAMA) chapter finished in second place at this year’s national marketing competition. The chapter also won the John Deere Signature Award. The John Deere award is given to student chapters based on business knowledge, academic excellence, leadership development and community citizenship. Chapter members Marydith Donnelly and Brent Miller earned scholarships and Allison Brockman made finals in the sales competition.

NAMA marketing team members presented their marketing plan for EnTotal, a dog food made from black soldier fly larvae. The students developed the product concept, which is modeled on insect-based dog foods available …

Examining The Capacity Of Nebraska Rangelands For Cattle, Kaitlyn Cumming, Jay Parsons, Walter H. Schacht, Brian Baskerville

Cornhusker Economics

According to the 2017 United States Department of Agriculture National Agriculture Statistics Service report (USDA-NASS 2017), Nebraska is the number one ranked state in the United States for both cattle on feed and for beef slaughtering capacity. It ranks number two in all cattle and calves while ranking number four in the number of beef cows. Beef production has a $12.1 billion impact annually to the Nebraska economy including $6.5 billion in direct sales (Nebraska Beef Cattle Facts 2016).

Given the above information, a research question was motivated to evaluate the forage production of Nebraska’s perennial grazing land systems and …

Nebraska Strong - Social Capital In Action, Marilyn R. Schlake

Cornhusker Economics

We have heard it and we have witnessed it in action. Nebraska Strong has been a unifying message that is bringing Nebraskans, friends and family together from across the nation. Signifying strength, determination, and a resolve to rebuild, Nebraska Strong has bolstered communities and individuals who have, in some cases, lost all semblance of what they had prior to the disastrous March blizzard and floods. Through this simple message, individuals have begun to utilize their social group networks or social capital to support recovery efforts.

Through the study of communities that have experienced major disasters, researchers found the existence of …

The Impact Of Different Data Processing Methods On Site-Specific Management Recommendation, Taro Mieno, Joe D. Luck, Zhengzheng Gao

Cornhusker Economics

Precision agriculture has the potential to enhance farming profitability substantially via site-specific management of fields. One of the promising ways of generating such profitability-enhancing input is to a use recommendation map is on-farm randomized trials. The process of generating an input (say nitrogen) using a recommendation map typically involves the following steps:

1. Design and implement randomized input use trial

2. Collect yield data along with other field characteristics (Slope, Electrical Conductivity, and Organic Matter)

3. Process the data for statistical analysis

4. Conduct regression analysis to estimate production function (how the input affect crop yield)

5. For each of …

The Role Of Insured Bushels And Pre-Harvest Hedging For An Eastern Nebraska County Under Rain-Fed Growing Conditions, Cory Walters, Richard Preston

Cornhusker Economics

At the beginning of the crop year crop producers face unknown yields and prices resulting in a large range of end of season (fall) net income. Producers can chose to participate in risk management tools, resulting in a reshaping of the fall net income distribution. Two of the most common tools are crop insurance and pre-harvest hedging (hereafter referred to as hedging). The most common crop insurance policy sold today is Revenue Protection (RP) where both yield and prices are insured. RP policy represents an intriguing crop insurance contract since it not only insures against price declines between spring and …

Nebraska Women In Agriculture “Take Charge Of Change”, Jessica J. Groskopf

Cornhusker Economics

A crowd of almost 300 gathered together Feb. 21 and 22 in Kearney, Nebraska for the 34th Annual Nebraska Women in Agriculture Conference, with the theme “Take Charge of Change.”

The conference is one of the longest-running women's conferences of its kind in the country. The goal of the Nebraska Women in Agriculture Conference is for women to build relationships with each other while gaining valuable knowledge about managing risk on their farms and ranches. The event featured 4 general session speakers and over 30 workshop sessions.

The keynote speaker this year was Marji Guyler- Alaniz, President and Founder of …

Market Impacts Of A Meat Tax, Regan Gilmore, Azzeddine Azzam

Cornhusker Economics

Over time, animal activists and environmentalists have made calls to put a tax on meat. What effect would that have? To find out, we estimated the impacts that a retail-level greenhouse gas (GHG) tax on meat would have on livestock and grain markets.

The research used a multi-market economic model that integrates the beef, pork, and poultry markets with the corn, distillers' grain, soybean, soymeal, and ethanol markets. For GHG taxes, we used those provided by Springman et al. based on a emission price (social cost) of $52 per metric ton of carbon dioxide equivalent estimated by EPA. Emissions by …

Nebraska Farm Real Estate Values Continue Gradual Declines In 2019, Jim Jansen, Jeffrey Stokes

Cornhusker Economics

The market value of agricultural land in Nebraska declined by three percent over the prior year to an average of $2,650 per acre according to the 2019 Nebraska Farm Real Estate Market Survey (Figure 1 and Table 1). This marks the fifth consecutive year of downward pressure as market values have dropped approximately 20 percent since reaching a high of $3,315 in 2014.

The University of Nebraska-Lincoln Department of Agricultural Economics annually surveys Nebraska land professionals including appraisers, farm and ranch managers, and agricultural bankers. Results from the survey are divided by land class and summarized by the eight Agricultural …

Things To Consider Before Co-Signing A Loan, J. David Aiken

Cornhusker Economics

Parents co-signing loans for their children is common in agriculture. This usually happens when the child needs a loan to purchase land, livestock, or farm equipment. Lenders are more willing to make the loan to a beginning producer if the parents co-sign. This means the parents promise to repay the loan if the younger producer cannot. Parents have been doing this as a way to help their kids get started in agriculture for decades. If the child turns out to be an effective producer, the risk of the parents being on the hook for the unpaid loan balance is pretty …

2019 Nebraska Property Tax School Funding Issues, J. David Aiken

Cornhusker Economics

Nebraska agricultural property taxes are among the highest in the United States. Over the last three years, Nebraska farmers and ranchers have paid nearly 31 percent of their net farm income as property taxes (47 percent in 2017). When state and federal taxes are factored in, this represents an effective tax rate of more than 50 percent (over 60 percent in 2017). While no one particularly enjoys paying property taxes (or any other tax), property taxes are especially burdensome for Nebraska farmers and ranchers.

The proposed 2020 constitutional amendment to provide property tax relief would require dramatic state spending cuts, …