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Farm and Ranch Management Updates
Characteristics Contributing to Nebraska Farm and Ranch Financial Stress
Significant financial changes have been underway in the U.S. agricultural system. After a decade of increases in crop and livestock prices mirrored by corresponding increases in expenses, prices began declining dramatically in 2014 (USDA-NASS, 2017). A survey in July 2016 indicated that 52 percent of Nebraska farmers and ranchers were financially stressed.
Sweet Sorghum as an Ethanol Feedstock in Western Nebraska – Could It Happen?
It has been proposed that non-irrigated sweet sorghum might be grown in western Nebraska as a seasonal substitute for corn grain in corn ethanol plants. In the research summarized here1, we examine the economic feasibility of this possibility, based on the technical data that are currently available about sweet sorghum production.
Managing Cattle Market Risk with LRP Insurance
Price and market uncertainties pose a significant risk to cattle producers with a substantial amount of money invested in breeding livestock, land, and other infrastructure. Price protection through the Chicago Mercantile Exchange (CME) futures contracts and options can be used to help mitigate this risk but, in the case of futures contracts, they can also introduce financial burdens in the form of margin calls. Furthermore, many medium to small-scale producers prefer not to get involved with trading futures and options contracts.
September Dairy Budget
The September Iowa-Nebraska dairy budget improved slightly from August, just over 7 cents per hundredweight. Feed costs increased by $0.35 per hundredweight from an increase to corn, 1 cent per bushel and a $15 per ton for alfalfa hay. Even though milk component prices dropped in September compared to August, gross revenue increased because of the higher total protein pounds and a less negative PPD. PPD improved to be $0.75 less negative than August. Butterfat revenue declined as did income from cull cows while income from butterfat and other solids increased.
Syngenta Litigation Update
On September 26, 2016, Kansas federal district court judge John Lungstrum certified eight state classes and one national class of corn producer plaintiffs in the Syngenta litigation. This means corn farmers--allegedly harmed by lower prices when China rejected US corn imports because the unapproved Syngenta GMO seed varieties–can have their day in federal court. Affected Nebraska corn farmers will begin receiving written notice soon informing them that they are automatically included in the Nebraska producer class and the national producer class.
Crop Insurance Workshop Planned
Nebraska Extension and planning partners from Kansas State University, Oklahoma State University and Colorado State University are holding crop insurance workshops in November.
August Dairy Budget
The total gross income in the August 20,000 pound dairy budget rose by just over $154. The income from protein rose by $409 while the negative PPD led to $168 loss in income. Gross feed cost declined by about $161, most of that from the decline in hay prices. All 3 of the 4 budgets show a positive return to management. Only the 20,000 pound tiestall budget had a negative return to management for August 2016.
Payoff of Corn/Soybean Rotation in Western Nebraska
Corn and soybeans are the two most common crops grown in Nebraska. Some farmers in the western part of the state plant continuous corn with few that plant continuous soybeans. In most cases some type of corn/soybean rotation is practiced. Idealistically speaking crop rotations should be producer and site specific, matching physical geography, resource availability and management capability. This work focuses on the difference in profitability among four possible rotations.
Partial Budgeting: Making Incremental Farm Business Changes
Business owners must often make decisions about changes for their agricultural businesses. Many of the decisions are incremental, such as adding land, expanding or reducing, adding or changing how an enterprise is managed. Analyzing the whole farm impacts for these types of changes is unnecessary. The partial budget is a useful analytical tool for agricultural managers, operators, owners, and investors when these situations arise. A partial budget helps agricultural owners/managers evaluate the financial effect of incremental changes.
July Dairy Budget
Compared to June, the July 2016 NE-IA dairy budget showed a very good improvement. The improvement came from both increased income and reduced feed costs. Gross income rose by over $20 per month per cow and feed costs dropped by about $13.25 per cow per month. For a total improvement of $33.25 per cow per month. The higher income came from increased butterfat, protein, other solids and quality price. However, the cull cow price dropped as did the PPD. All feed prices dropped, except fat. The net improvement is $1.73 per cwt.