Extension Update by Gary Zoubeck [August 28, 2014]

Coming Events

• August 27-28:  Crop Management Diagnostic Clinic, ARDC Mead http://ardc.unl.edu/cmdc.shtml
• August 28, 5:30 p.m., York County Corn Grower Plot tour located on the Ray & Ron Makovicka farm located East of York ¼ mile East of the intersection of Road 14 & O
• September 3, 11:00 a.m., Hamilton County Corn Growers Association tour located on the Mike Oswald farm located 4 miles west of Aurora on Highway 34; OR east of the IAMS plant just south of Highway 34

Corn Grower Plot Tours

I would like to invite all area producers and other interested in the corn production to the annual York County Corn Grower Plot Tour planned for this Thursday, August 28, at 5:30 p.m. The 2014 plot is located East of York on the Ray and Ron Makovicka farm located ¼ mile East of the Intersection of Road 14 and O. We hope hear from the participating seed representatives, NRD representatives, as was as UNL Extension Educators about our new irrigation apps for use on your smart phones!

Do you know a corn producer that’s not involved with the Nebraska Corn Growers Association? How about contacting them or picking them up and bringing them along? We’ve got some great benefits for members that join, ask me or any of the board of directors for details.

The Hamilton County Corn Growers Association tour will be Wednesday, Sep. 3, beginning at 11:00 a.m. on the Mike Oswald plot located 4 miles west of Aurora on Highway 34 OR east of the IAMS plant just south of Highway 34.

Cropping Update

This past week the ETgages that I monitor dropped 1.25 inches for the week. The factor for our soybeans is 1.1, so that’s a total of 1.37 inches for the week or about .20”/day for soybean. Depending upon your corns planting date and maturity, the factor may be lower. It’s .96 for corn that’s reached full dent, so your water use would have been .17”/day.

Soybeans that are at the end of seed enlargement will need about 3.5” of water maturity, while corn at beginning dent will require 5.0” and corn at ½ milk line will need 2.25”.  Since we’ve received about 1.75” this past weekend and they’re predicting some good chance of rain the next few days, we may be getting closed to the end of the irrigation season. We want to dry the soil as much as possible without harming yields so that Mother Nature will refill the profile for us.

If you’re using sensors a new feature, we’ve added to your free CropWater App is calculating that last irrigation. You can input your crops stage of growth, your sensor readings, and it will estimate your water status needs to maturity. It’s available for iPhones/iPad and will be release soon for Droids. I hope you’ll check it out!

The Great Balancing Act – Negotiating a Cash Rental Rate

I’ve received a few questions about Cash Rental Rates for 2015, so I thought I’d share a recent column/CropWatch article that Al Vyhnalek, Extension Educator in Columbus did. It follows:

“Getting landlords and tenants to agree for this next year will be a great balancing act in my view. On the landlord’s side, the land taxes have skyrocketed in the past few years. Ask anyone that owns farmland to talk about this and you can practically see the steam coming out their ears. I own farmland in Saline County and so I have firsthand experience about those feelings. Landlords probably better remember that most farmers own land too, they know how land taxes are changing.

On the tenant’s side, it’s not $7 per bushel corn and $15 per bushel soybeans anymore. With the last USDA acreage and carry-over estimates, the corn and soybean prices plummeted again on June 30. Current cash price for corn and soybeans are around $3.30 and $10.00 respectively at local elevators. That is a significant drop for the second year in a row. Expenses are not likely to go down. All estimates that I see for corn production (as an example) indicate that the expense of raising one bushel of corn will be somewhere between $4.10 and $4.70 depending on what the land charge (expense) is.

So, if I explain the above paragraph to the tenant I usually hear something like this:  ‘Well, that farmer made too much money the past several years, and I am not dropping my rent, not with land taxes where they are at.’

So we have a dilemma. The tenant that cannot or should not pay more rent and a landowner that is unwilling to lower rent. This creates the great balancing act.

We do also need to keep in mind that the lease on farm land is a traded commodity that is ultimately governed by supply and demand. At this time, the demand is still exceeding the supply, so at the time of this writing, land cash rental rates are not likely to go down significantly.

Both parties need to use a sharp pencil. Landlords need to get out a calculator and really determine what the land charge for taxes is. I’ve had landlords think rent should go up by $25 per acre to cover taxes when the tax change per acre per year is $5-7 per acre. I also think that tenants have added expenses (like fertilizer and chemical packages, new machinery, better more costly seed genetics, as examples) over the past few years that need to be examined closely now that the price of corn and soybeans has changed dramatically.

I will finish this column by saying that 1) Cool heads will prevail; 2) Share information with each party so no one feels like there is an advantage of ‘secret’ information given to the other party; 3) Consider lowering rents, keeping rents steady, or only increasing rents by the actual increase in land taxes. What you do will depend on your situation and where you rent is currently. 4) Consider going to some type of flex lease, or modified crop share agreement.

The great balancing act for farmland rental arrangements of 2015 is an interesting situation. I wish both parties well as they work on determining rent for the next year. And while I will not mediate a rental agreement dispute, if you have questions, please continue to contact me and I will help as I can.

For more information or assistance, please contact Allan Vyhnalek, Extension Educator, University of Nebraska-Lincoln, Extension in Platte County. Phone: 402-563-4901 or e-mail avyhnalek2@unl.edu.’

I know one thing for sure, lease rates for 2015 will be determined by the local market supply and demand. All parties must agree.”

Al also indicated to me that a good starting point to start lease discussions would be by thinking about by calculating “30% of gross”. Taking 30% of the average production and multiplying that by the expected fall price for 2014. This number gives us where we should start rent discussions for the upcoming year. So 244 bu. yield times .3 is 73.3 bushels times $3.75 = $275 cash rent per acre.

His example 30% does not just come from thin air. If you were to crop share with the landlord paying no expenses, they’d expect to receive about 30% of the crop. If you stuck the pencil and calculator to it – it would probably be 27-28% for the corn and 32-33% for the soybeans – so that is why he uses 30%.

Good luck at you negotiate the upcoming leases. Ideally shared crop leases work well. Over the long haul leases need to be fair for all parties involved. What are those prices and inputs going to be? We have a farm lease calculator available at: http://agecon.unl.edu/resource/farmcalc.html.

Last year’s Nebraska rental rates can be found on our website: http://york.unl.edu/crops-future click on the appropriate link.

Livestock Disaster Programs

The York FSA staff wants to remind producers that time is running out to apply for the two Livestock Disaster Programs and qualify for the full payment. We have been notified by the national level that there is the possibility of a 7.3% reduction in all payments issued after the end of the fiscal year, September 30, 2014. This would include the Livestock Disaster Program payments. Applications should be filed as soon as possible but no later than September 19, 2014, to give our office time to issue the payments before October 1.

The Livestock Forage Program will pay for pasture losses due to drought if you had any type of livestock on grazing acres in York County in 2012.  Counties to the North and West of York County are eligible for 2012 and also 2013. We are also taking applications for the Livestock Indemnity Program which compensates livestock producers for livestock losses in excess of normal mortality that resulted from an eligible adverse weather event in 2012, 2013, and 2014.

Please pass this information to friends and neighbors that may not have heard about these programs.

Nebraska State Fair  

Hopefully, if you’re planning to attend the state fair, you’ll stop by and visit the new “Raising Nebraska Building” while you’re there. It’s a great way to learn more about Nebraska’s greatest industry “Agriculture”. If you stop by, let me know what you thought of it!