Friday January 2 Ag News - Happy New Year!!!

2015 Nebraska Beef Reports Available to Producers
Karla H. Jenkins, UNL Cow/Calf, Range Management Specialist

The Nebraska Beef Cattle Report is an annual publication describing the research results of experiments conducted by UNL faculty in the beef industry. All reports include an implications section describing how the results of these experiments apply to beef cattle production. This year’s report contains 48 articles summarizing research on cow/calf, growing cattle, resource management, feedlot, and meat products. Within each section topics include nutrition, reproduction, management, and technology. The purpose of this report is to give cattle producers, consultants, and extension personnel a research based decision making tool.

The 2015 Nebraska Beef Cattle Report, as well as past reports, can be viewed and downloaded as a complete PDF or as individual articles at http://beef.unl.edu/nebraska-beef-report-2015 . Additionally, producers wanting to read a summary of each study in the report can access the NebGuide (G425) containing those summaries at http://www.ianrpubs.unl.edu/epublic/live/g425/build/g425.pdf.

Anyone interested in a printed copy or who would like to join the mailing list to receive this yearly report should contact Sheila Hayes at (402) 472-6486 or shays@unl.edu.



PLAN FOR DROUGHT WHEN PREPARING PASTURE LEASE
Bruce Anderson, UNL Extension Forage Specialist

               Do you rent pasture?  What happens if drought lowers pasture production below expectations?  Specifically, what does your pasture lease say about drought?

               Drought can play havoc on pasture leases.  All too often, pasture leases fail to include an appropriate plan to adjust to this problem.

               Without a plan, both the landowner and the tenant are at risk.  Landowners risk having the pasture become overgrazed, resulting in future weed problems, reduced long-term production, and lowered value.  The tenant risks poor performance or health of the livestock due to less forage and lower quality feed.  This can lead to higher supplemental feed costs or being forced to sell the cattle.

               So, who decides when drought has lowered pasture production low enough to remove the cattle?  And, what should be the adjustment in the rent payment?  And who gets insurance or government payments?

               Unfortunately, I can’t give you a specific answer.  Instead, now is the time to discuss these issues as landlord and tenant.  Be sure to list the length of the grazing period in the lease along with beginning and ending dates.  Also make sure that stocking rates are specified in the lease, adjusting these stocking levels for increased cow size if necessary.  Usually, it is best to design the lease so both landowner and tenant share in the opportunity and risk associated with drought by adding an appropriate escape clause due to drought.  Indicate how a drought adjustment will be made and how that will affect rent payments.   And get it all in writing to avoid any misunderstandings later.

               Drought can cause a lot of headaches.  But if you’ve planned ahead, making sudden adjustments to your pasture leases won’t be one of them.




Iowa Farmland Values Fall from Historic High

Average Iowa farmland value is now estimated to be $7,943 per acre—a drop in value of $773, or 8.9 percent, per acre. Land values were determined by the Iowa Land Value Survey, which was conducted in November by the Center for Agricultural and Rural Development at Iowa State University. Results from the survey are similar to results found by the Realtors Land Institute and the Federal Reserve Bank of Chicago.

As farmland values do not rise or fall uniformly across the state, the survey examines values by crop reporting districts; each of the 99 counties individually; low, medium and high grade farmland; and also averages the state as a whole. The $7,943 per acre and 8.9 percent drop in value represent the state as a whole.

While this year marks the largest decline in farmland values since 1986, it is only the second year since 1999 that the survey has shown a decline in farmland values. After hitting a historic peak in 2013, values have returned to a mid-point between 2011 and 2012 values. In spite of the decrease, farmland values are more than double what they were 10 years ago, 81 percent higher than 2009 values, and 18 percent higher than 2011 values.

“I think we have seen a peak for the time being,” said Michael Duffy, a retired ISU economics professor and extension farm management economist, who conducted this year’s survey. “Commodity prices and farm income are settling back to more expected levels, and I think land values will probably move sideways for a while,” he said. “Many people think this report indicates the beginning of another farm crisis, but land values are still considerably higher than they were just a few years ago.”

Drop in commodity prices influences farmland values
Corn and soybean prices started falling in 2013, and as a result farm income dropped. The most recent USDA net farm income estimate showed a record high income in 2013, but a 23 percent drop in net farm income for 2014. Falling commodity prices, along with a drop in farmland value, could make problems for some farmers.

“The drop in farmland value is due to the drop in commodity prices,” Duffy said. “Pressure could come if farmers incurred debt in anticipation that commodity prices would continue. I think all farmers will have a cash flow problem for the next 18 months or so. If farmers still have equity in their land they should be able to refinance, but farmers who got over-extended will be in trouble.”

Of respondents that listed positive and/or negative factors influencing farmland values, low interest rates were the most commonly cited positive factor, and lower commodity prices were the most frequently cited negative factor. Other negative factors mentioned included high input prices and an uncertain agricultural future.

The survey was initiated in 1941 and is sponsored annually by Iowa State University. Only the state average and the district averages are based directly on the ISU survey data. The county estimates are derived using a procedure that combines the ISU survey results with data from the US Census of Agriculture. Beginning this year the survey is being conducted by the Center for Agriculture and Rural Development in the Economics Department at Iowa State University.

The survey is based on reports by licensed real estate brokers and selected individuals considered to be knowledgeable of land market conditions. Respondents were asked to report for more than one county if they were knowledgeable about the land markets. The 2014 survey is based on 428 usable responses providing 608 county land values estimates.

For additional resources, including maps and historical survey data, please see http://www.card.iastate.edu/land-value/2014/. 



FSA Yield Data Update - Crop Insurance Records Could Be Available to Help Base Acre Update

The Farm Service Agency has new information available for landowners to help them better update their base acres and yields.

The Agricultural Act of 2014 provides landowners with the opportunity to reallocate base acres according to their recent planted acres. The legislation also allows producers to update yields used for payments. For some landowners, this will be the first chance to update their base acres and yields since 1986.

Thus, FSA has been working with the Risk Management Agency to make available certified yield data to help better calculate safety net options with updated yields. FSA states that producers can check with their local county FSA office to see if the crop-insurance yield data is available. This data is only available to the producer associated with the crop-insurance records.

Under the farm bill, landowners can reallocate base acres using planted acreage from the 2009-2012 crop years. Landowners are not allowed to increase their base from levels used in 2013. Landowners must have some proof of yields if they are audited, such as crop-insurance records.

For yield, landowners can bump up their yields to 90% of the average yield for crop years 2008-2012. If any crop yield from 2008-2012 is below 75% of the county yields, then 75% of the county average from 2008-2012 is used as the yield plug-in for that year.

Landowners have until Feb. 27 to reallocate base acres and update yields.  More information on USDA commodity programs can be found at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=arpl&topic=landing. 



As Ogallala aquifer empties, group advocates for aqueduct to tap Missouri River
Kansas Aqueduct Coalition proposes solutions to water shortages at KFU convention

Thinking Outside the Box, the theme for the annual Kansas Farmers Union convention held in early December, focused on alternative, if not visionary (and occasionally contrary, at least to the status quo) approaches to food production and distribution, livestock management and water conservation. Cole Cottin, program coordinator for the Kansas Rural Center, shared her recent findings in a study entitled Feeding Kansas, which called for more regional food hubs and a shift to crops that were more healthful and require less water; Missouri farmer and rancher Cody Holmes elaborated on his use of intensive rotational grazing with multi-species herds; and National Geographic photographer Jim Richardson presented his ideas of how farmers could feed an additional two billion people by 2050.

Most of the proposed solutions involved changes in attitudes and perceptions rather than massive financial or engineering undertakings. The latter was left to Mark Rude, executive director of the Southwest Kansas Groundwater Management District No. 3 in Garden City, whose discussion of the proposed Kansas Aqueduct really stretched the boundaries of unconventional thinking, at least to many of the members present.

The aqueduct, a 360-mile-long canal spanning three-quarters of the state from the loess hills surrounding White Cloud in the northeast to a new reservoir in the high, dry plains between Scott City and Great Bend, was the antithesis of what the other speakers proposed. It was big, it was grand, it was enormously expensive, but the reasons Rude gave in favor of the project were indisputable.

"If we lose the Ogallala aquifer, the decimation of farms will be tremendous,"he said. "We've got to do something."

Underlying an area spread across eight states, the Ogallala supplies water for drinking and irrigation to 82 percent of the 2.3 million people within the region. One of the world's largest aquifers, its discharge rate has accelerated to the point where some studies predict it could go dry by 2028. Should that happen, Rude said, the results would be catastrophic.

"As we consume this water,"Rude said, "we lose land value, we lose the economy, we lose the community. We're mining these aquifers, but how do we conserve that water, or augment that supply? That's why we're taking this dramatic step and looking at the options."

The Kansas Aqueduct Coalition, the group advocating the canal, bases its findings on the Six-State High Plains Ogallala Aquifer Regional Resources Study, completed in 1982. A schematic from the study envisions a lock and dam intake structure on the Missouri River near White Cloud pumping water to a nearby 13,000-acre source reservoir with a maximum storage capacity of 228 billion gallons. Water would then flow 360 miles in a zigzag route through a concrete-lined canal 280 feet wide and 23 feet deep. Fifteen pump stations would be necessary to lift the water about 1,600 feet to a 25,000-acre terminal reservoir near Utica with a maximum capacity of 517 billion gallons.

Powering those pump stations would more than double the state's consumption of electricity, he said, making the aqueduct the largest electrical system in Kansas.

"This is no small thing to think about,"he said. "As we talk about this, there are so many issues just to add to the list much less deal with. We're trying to identify these challenges, and also focus on Kansas communities and farms."

Removing that much water from the Missouri River is within the water laws of the state, Rude said. "If it's in the middle of the river,"he said, "it's Kansas water. That water is wide open for appropriation."

Nevertheless, he added, the state will have to open discussions with neighboring and downriver states to cement a compact, and the sooner the better. "It's critical that something happens along those lines really soon,"he said. "That may not be an option tomorrow."

The estimated cost of the aqueduct would be $25 billion, Rude said.

Conservation practices, tillage improvement, agricultural efficiency and other measures are making an impact on water usage in the southwestern part of the state, he said, but they're not enough. "We're dropping a million acre feet per year,"he said. "Those will help, but when you're that far out of whack, it takes more than that."

During the past few years, all 105 counties in the state were stricken with drought, yet the Missouri River consistently flooded, he said. Tapping into that flow would have minimal impact on downriver consumers, yet it might be the solution for augmenting the aquifer. The logistics are daunting, the hurdles piling up like logjams, and the options declining about as fast as the Ogallala.

"We can think about innovation, but at some point innovation and practicality have to come together,"Rude said. Whether the aqueduct is as practical as it is innovative remains to be seen, but Rude and the other members of the Kansas Aqueduct Coalition know this: doing nothing is not an option.



USDA Announces Commodity Credit Corporation Lending Rates for January 2015

The U.S. Department of Agriculture's Commodity Credit Corporation (CCC) today announced interest rates for January 2015. The CCC borrowing rate-based charge for January is 0.125 percent, unchanged from 0.125 percent in December.

The interest rate for crop year commodity loans less than one year disbursed during January is 1.125 percent, unchanged from 1.125 percent in December.

Interest rates for Farm Storage Facility Loans approved for January are as follows, 2.000 percent with seven-year loan terms, unchanged from 2.000 percent in December; 2.250 percent with 10-year loan terms, down from 2.375 percent in December and; 2.375 percent with 12-year loan terms, down from 2.500 percent in December.



Elanco, Novartis combination brings value, more innovation to customers
Elanco today announced it has finalized the acquisition of Novartis Animal Health, creating a new global leader in animal health focused on delivering increased value and innovation to the industry.

The acquisition, announced in April, follows Elanco’s purchase of Lohmann Animal Health earlier in 2014. Both strategic investments position the company to offer a more diversified product offering and capabilities to help customers sustain and grow their businesses. This includes the flagship brands customers have come to expect from Elanco, but also a comprehensive portfolio of nearly 300 brands encompassing therapeutics, vaccines, parasiticides, antimicrobials, surgical, enzymes, food safety and more.

“Elanco’s acquisition of Novartis Animal Health brings together two strong companies with a passion for serving the customer,” said Rob Aukerman, president North American Commercial Operations for Elanco. “We will continue to offer the products our customers trust, while significantly investing in the development of new solutions to our customers’ greatest unmet needs.”

Going forward, Elanco will significantly increase investment in research and development, bringing greater breadth and depth to an already strong pipeline. The combined organization will have expanded capabilities and expertise with a broader portfolio of more than 100 product development projects focused on:
-    enhancing care and extending quality of life of pets, while preventing disease and protecting from parasites
-    protecting livestock from disease and parasites, improving animal well-being and reducing the environmental footprint of livestock production
-    providing a broader set of solutions in areas such as enzymes, diagnostics, aquaculture and vaccines.

Elanco aims to help veterinarians help pets live longer, healthier lives, with pet ownership increasing as millions recognize the physical, social and emotional benefits of companionship. Elanco is also committed to helping producers around the world produce more food using fewer resources to meet the growing demand for animal protein while protecting the planet and well-being of animals.

“We’ll continually seek innovative ways we can support our customers’ business,” Aukerman said. “With increased technical services that combine our analytic and benchmarking tools with on-the-ground support, we'll be able to spend more time with individual customers seeking innovative solutions that can make a difference in their business.”

The complete integration of the businesses will take time, but Elanco will strive to make the transition seamless. For the foreseeable future, business will continue in much the same way, including product ordering and customer support. Availability and access to products will continue uninterrupted.