Economics Commons^™

Hog Barn Density And Location In U.S. And Nebraska, Elliott James Dennis

Extension Farm and Ranch Management News

There is strong local and national interest in adding hog barns to existing row crop operations. Declining on farm income over the past several years has accelerated this interest. Grain operations cite diversifying farm income, adding another family to the farm operation, and/or replace commercial fertilizer expense as the primary reasons for adding a hog barn.

While there is industry demand to increase hog contract growing, these agreements can possess significant benefits and risks to producers. This is the first of a four part series which will discuss some financial and legal implications of adding a hog barn to an …

Multi-Peril Crop Insurance Basics, Matthew Stockton, Duran Rudnick, Chuck Burr

Cornhusker Economics

The Federal crop insurance corporation (FCIC) https://www.rma.usda.gov/Federal-Crop-Insurance-Corporation and https://www.everycrsreport.com/reports/R45193.html offers three types and eight levels of taxpayer subsidized multi-peril crop insurance (MPCI) policies, sold for four different unit types. The unit types are designed to define the nature of the farm area being insured. There are four types of insurable units, optional, basic, enterprise and whole farm. Each of these units has differences in costs per acre and is likely to create variations in indemnities. For example, a highly localized severe hail storm on a single field covered using basic units would likely have an indemnity, versus not likely to …

What Are Total Export Commitments Telling Us About Beef’S Potential In 2020: Positive Signs?, Elliott James Dennis

Extension Farm and Ranch Management News

Overarching Market Conditions

The recent cattle on feed report suggests that cattle feedlots are coming closer to sorting through much of the backlog associated with plant closures and shutdowns as a result of plant workers testing positive for COVID-19 and plants implementing CDC and OSHA worker health recommendations. For example, the number of cattle on feed over 90 days has dipped below 2019 levels for the first time since April. However, cattle on feed over 120 days is still about 10% higher than 2019. The result of cattle being on feed longer is sustained record level dressed weights for both …

Drought Decisions: Profit Maximizing Decisions During And After Drought Conditions, Robert Tigner, Elliott James Dennis

Extension Farm and Ranch Management News

In summary, using available price risk management tools can effectively reduce some of the market price risk variability that is inherent in agricultural production that are caused by either production or price risk.

Nebraska Monthly Economic Indicators: August 26, 2020, Eric Thompson

Leading Economic Indicator Reports

The LEI-N rose by 0.59% during July of 2020. July marked the third consecutive increase in the leading indicator after sharp declines in March and April. The July result indicates that the Nebraska economy will grow over the next 6 months, continuing a steady recovery from large economic losses in March and April. Five of the six components of the leading indicator improved during July. Airline passenger enplanements continued a steady rebound, and there was a modest increase in building permits for single-family homes. There also was a slight drop in initial claims for unemployment insurance and a drop in …

2020 Nebraska Property Tax Changes, J. David Aiken

Cornhusker Economics

The Nebraska Unicameral enacted significant property tax relief legislation in the closing days of the 2020 legislative session. The last-minute compromise was negotiated by seven legislators selected by the Speaker. The compromise estab-lishes a refundable state income tax credit of an estimated 6% of the property taxes paid for local schools (excluding property taxes for school bonds and school budget overrides). Taxpayers will be able to claim this credit on next year’s Ne-braska state income tax return. For fiscal years (FYs) 2021-22 through 2023-24 (i.e. from July 1, 2021, through June 30, 2024), the amount availa-ble for the refundable state …

Annie’S Project: Know Your Numbers, Know Your Options, Jessica Groskopf

Cornhusker Economics

To help farmers and ranchers improve their record keeping and decision making, Nebraska Extension has hosted several Know Your Numbers, Know Your Options courses across the state since October 2019. These programs are inspired by Annie’s Project.

Annie's Projects are educational courses for wom-en that focus on agricultural risk management topics. These hands-on programs aim to increase the knowledge, skills, and abilities of attendees. They encourage attendees to ask questions, connect with participants and speakers, and share their experiences.

Risk Management Needs And Challenges For Agriculture, Bradley D. Lubben

Cornhusker Economics

Farmers and ranchers must continually manage risk in their operations to be successful. But the amount of risks and challenges they have faced over the past few months and years seems almost unprecedented. From financial challenges toproduction and market shocks to public health scares and policy developments, agriculture has had to respond and adapt to a wide range of issues.

Cares Act Implications On Tax Planning For Farmers, Tina N. Barrett

Cornhusker Economics

The CARES Act, passed in March of 2020, provid-ed many changes that directly impacted farmers. It created both the Payroll Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), which many farmers utilized. However, the CARES Act included several other provisions that didn’t get as much attention. Farmers need to be aware of these as they go into tax planning this fall, as they could benefit their operations.

Estimating A Fair Value For Standing Forage, Jay Parsons, Daren Redfearn, Mary E. Drewnoski

Cornhusker Economics

Several things need to be considered when deciding what value to place on standing forage. Forage prices reflect current inventories, demand, expected current season production and associated yield risk, and quality characteristics. Standing forage can be harvested in a number of different ways which need to be considered when pricing it. Below, we provide a few general thoughts and questions concerning harvesting method and comparable feed value to consider when pricing standing forage. We follow with a few examples illustrating pricing calculations for forage mechanically harvested as hay, haylage, and silage. We close with pricing considerations for forage harvested by …

Feeder Cattle Future Price Spreads: Opportunities To Hedge?, Elliott James Dennis

Extension Farm and Ranch Management News

First paragraph:

Feeder cattle future price spreads across all months have recovered to near pre-COVID-19 levels as quarantine restrictions and packing plant capacity issues have been mostly sorted out. For example, for the week of July 17, 2010 [sic], prices reached levels not seen since the beginning of March 2020. Pasture and corn progress are two factors that have the potential to push prices lower in the next coming months. Given current market conditions, producers have some options to lock in a margin.

Nebraska Monthly Economic Indicators: July 24, 2020, Eric Thompson

Leading Economic Indicator Reports

The LEI-N rose by 1.72% during June of 2020. The June increase followed sharp declines in March and April. The June result indicates that the Nebraska economy will grow over the next 6 months, continuing the steady recovery from large economic losses in March and April. All six components of the leading indicator improved during June. The slow rebound in airline passenger enplanements continued, and manufacturing hours-worked increased. There also was a slight drop in initial claims for unemployment insurance and a drop in the value of the U.S. dollar in June. A lower U.S. dollar improves competitive conditions for …

Historic Analysis Of Flooding And Excessive Moisture Across Nebraska And Implications For Agricultural Lease Arrangements In 2020, Jim Jansen, Jeffrey Stokes

Cornhusker Economics

The Nebraska Farm Real Estate Market Survey and Report 2019-2020 provides insight on recent trends on the market value of agricultural land and cash rental rates 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 2020 evaluates historic flooding and excessive moisture over the prior decade across Nebraska and implications on accounting for this type of risk in …

Coronavirus Food Assistance Program (Cfap) Payments For Nebraska Livestock Producers, E. Wesley F. Peterson

Cornhusker Economics

In the June 10, 2020 issue of Cornhusker Economics, the Coronavirus Food Assistance Program (CFAP) was described and the average level of payments to Nebraska Corn and Soybean Producers from this program were estimated. CFAP includes payments for both livestock and crops and in this issue, I explain eligibility requirements, payment sources, and expected payments for Nebraska livestock producers. The COVID-19 epidemic in the United States caused hardships for both producers and consumers of livestock products. The virus affected workers in livestock processing and packing plants, in particular, due to the nature of the work which normally requires working in …

2020 Nebraska Agricultural Custom Rates With Statewide Survey Summary, Glennis Mcclure

Cornhusker Economics

With the large investment cost of agricultural machinery and equipment, and often with the uncertainty of labor availability, many Nebraska farms and ranches utilize and pay for custom services. There is generally great interest in the biennial University of Nebraska-Lincoln Custom Rates Survey report from those that perform services and those that pay for services. The recently completed 2020 Nebraska Custom Rates Survey and accompanying report summarize current rates charged for specific machinery operations and custom services across the state.

The Value Of Soil Sampling And Sampling Density: Conceptual Framework (Part 1), Taro Mieno, David Bullock

Cornhusker Economics

When considering variable-rate nitrogen or seed application, soil sampling can provide farmers and their consultants with valuable information about the spatial distributions of soil properties such as organic matter, micro- and macro-nutrients, and pH. Conceptually, that information may be especially valuable for site-specific input management. But just as farmers make decisions about input applications, they also must make decisions about soil sampling, and in particular, must choose soil sampling density. It is standard practice for U.S. corn and soybean farmers to take soil samples on their fields every three or four years at a density of one sample per 2.5 …

Nebraska Monthly Economic Indicators: June 24, 2020, Eric Thompson

Leading Economic Indicator Reports

The LEI-N rose by 2.45% during May of 2020. The May increase followed sharp declines in March and April. The May results indicate that the Nebraska economy will grow over the next 6 months, allowing the state to begin to recover from economic losses in March and April. Four of the five components of the leading indicator improved during May. There was a significant decline in initial claims for unemployment insurance. The slow rebound in airline passenger enplanements also began. In addition, building permits for single-family homes rebounded in May after an April drop. The value of the U.S. dollar …

Farm And Ranch Enterprise Budgets: Return To What?, Larry Van Tassell, Jay Parsons, Glennis Mcclure

Cornhusker Economics

Budgets capturing the projected revenues and costs associated with producing and marketing a single commodity are generally called enterprise budgets or cost and return estimates but can also be referred to as profit center budgets. Two of the major purposes for developing enterprise budgets are to determine which enterprises are the most profitable and to determine breakeven prices for use in a marketing plan. Enterprise budgets produced by the University of Nebraska-Lincoln can be found at farm.unl.edu.

Introduction To The R-Package: Usdampr, Elliott James Dennis, Bowen Chen

Extension Farm and Ranch Management News

Why the Need for the Package? In the 1990’s, concern over growing packer concentration and a hog industry market shock resulted in discontent among producers and packers. As a result, the United States Congress passed the Livestock Mandatory Reporting Act of 1999 (1999 Act) [Pub. L. 106-78, Title IX] which is required to be reauthorized every five years. See here for a full history of the Livestock Mandatory Reporting Background.

Market reports were publicly issued in the form of .txt files with varying frequency from April 2000 to April 2020. Current and historical data were also housed in a USDA-AMS …

Business Powers Of Attorney For Nebraska Farm And Ranch Business Owners, J. David Aiken

Extension Farm and Ranch Management News

This publication introduces the POA concept and discusses the Nebraska statutory form POA and its limitations. The purpose is to familiarize the reader with POAs, including their use and misuse, so that they can interact more effectively with their attorney in developing a POA, should they need one.

Disclaimer

This information is intended for educational purposes only; it must not be taken as legal advice or as a substitute for legal advice. If you have legal questions about developing and implementing a power of attorney for operating your business should you be unable to do so yourself, contact an …

Can Commodity Prices Be Negative? Revisiting The Events In The Crude Oil Market In April., Fabio Mattos

Cornhusker Economics

Preventive measures adopted during the COVID-19 pandemic have changed our lives and businesses in many ways. Commodity markets have also witnessed unique events that were partially influenced by those changes. In April, for the first time in history, prices in a large exchange-traded futures market turned negative. Crude oil futures prices for May 2020 delivery were traded below zero on April 20 and 21, reaching a minimum of –$40.32/barrel. If I am selling crude oil to you for –$40.32/barrel, it means that I am giving you the contracted amount of crude oil and paying you $40.32/barrel to take my oil. …

Utilizing Annual Forage Crops In Rotations, John Hewlett, Jay Parsons, Jeff Tranel

Extension Farm and Ranch Management News

First paragraph

Approximately 60 million acres of forage are harvested annually in the United States, according to the National Agricultural Statistical Service (NASS). With lower commodity grain and oilseed prices along with high pasture rental rates and/or difficulty finding range and pasture to rent, some producers are considering ways to incorporate more forages into their crop rotations.

Changing Grid Premiums And Discounts Due To Underlying Changes In The Fed Cattle Industry, Elliott James Dennis

Extension Farm and Ranch Management News

First paragraph:

In recent weeks there has been increased attention given to the role of Alternative Marketing Arrangements, commonly referred to as AMA's, in the fed cattle market. The use of these AMA’s varies greatly by region and some of the more common AMA’s used include grid and formula pricing. AMA’s pay producers premiums and discounts from a ‘base price’ based on a combination of the yield grade, quality grade, and weight of dressed cattle. It is common for the negotiated cash price to serve as the ‘base price’ for AMA’s using the either the geographical region or the 5-market …

Coronavirus Food Assistance Program (Cfap) Payments, Anil Giri, E. Wesley F. Peterson, Sankalp Sharma

Cornhusker Economics

On April 17, 2020, U.S. Secretary of Agriculture Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP), a new program to assist producers and consumers affected by the COVID-19 pandemic (USDA 2020b). CFAP will provide $19 billion in relief to producers and entities throughout the supply chain. This will be done through two programs, Direct Support to Farmers and Ranchers ($16 billion) and USDA Purchase and Distribution ($3 billion) (USDA 2020a). Producers will be paid on actual losses due to decreases in prices and/or disruption of supply chains. On May 19, 2020 USDA announced the details of the CFAP. There …

Impact Of Covid-19 On Demand For Distillers Grains From Livestock Operations, Daniel Gertner, Elliott James Dennis

Cornhusker Economics

Government and industry responses to COVID-19 cases have created a variety of unique situations in the agriculture industry. "Stay-at-home" orders forced consumers to be homebound, increasing the demand for food in grocery stores while reducing the need for food in restaurants. These caused a series of rapidly changing supply and demand conditions along the livestock supply chain. Meat destined for restaurants need to be repacked and reprocessed to make it compatible to sell in grocery stores. Meat packing plants continued to try to process harvest-ready animals, but a growing number of positive cases among plant workers forced idling, reduced plant …

Coronavirus Food Assistance Program For Livestock Producers, Bradley Lubben

Extension Farm and Ranch Management News

United States Congress and the President have approved multiple phases of COVID-19 assistance to date including the $2.3 trillion CARES (Coronavirus Aid, Relief, and Economic Security) Act passed in March that provides financial support for agricultural producers as a small part of the overall relief.

While agricultural producers and agribusinesses are eligible for two programs administered through the Small Business Administration, including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDLs), the primary support for agriculture is coming from USDA through the Coronavirus Food Assistance Program (CFAP). The CARES Act provided $9.5 billion directly to the Secretary of …

Nebraska Monthly Economic Indicators: May 28, 2020, Eric Thompson

Leading Economic Indicator Reports

The LEI-N fell by 5.57% during April of 2020 as the COVID-19 Pandemic continued to impact Nebraska’s economy. The decline in April followed a large decline in March. Taken together, the two monthly drops suggest that the Nebraska economy will be smaller in the fall of 2020 than it was during January and February of this year. All components of the leading indicator worsened during April. There were few airline passenger enplanements during April. In addition, both building permits for single-family homes and manufacturing hours-worked declined while initial claims for unemployment insurance rose. There also was another increase in the …

Coronavirus Food Assistance Program For Crops Producers, Bradley Lubben

Extension Farm and Ranch Management News

The United States Congress and the President have approved multiple phases of COVID-19 assistance to date including the $2.3 trillion CARES (Coronavirus Aid, Relief, and Economic Security) Act passed in March that provides financial support for agricultural producers as a small part of the overall relief.

While agricultural producers and agribusinesses are eligible for two programs administered through the Small Business Administration, including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDLs), the primary support for agriculture is coming from USDA through the Coronavirus Food Assistance Program (CFAP). The CARES Act provided $9.5 billion directly to the Secretary …

The Impact Of The Covid-19 Crisis On Nebraska's Ethanol Industry, John C. Beghin, Sushant Timalsina

Cornhusker Economics

This article looks at the impact of the pandemic crisis on Nebraska’s ethanol industry. We trace the changes in return margins since the last quarter of 2019 to early May of this year and show the deterioration of these margins and the resulting reduced returns, gross revenues and production reduction induced by the low returns.

Workforce Development In A Post-Covid World: A Grassroots Approach, Cheryl A. Burkhart-Kriesel, Kristina Bayton, Samantha Guenther, Blayne Sharpe

Cornhusker Economics

As the world slowly emerges from COVID 19 both the virus and the lingering effects on the economy will be in the spotlight. There is a real urgency to get businesses up and running and employees working again. Some businesses may be able to "flip a switch" and up to speed while other may need to ramp up more slowly and will only be able to "turn up the dial." In both situations, there are implications for the local workforce and for the community.