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Minnesota County Cropland Rental Rates Available

By David Bau, Extension Educator

Average, Median, Ten Percent Lowest Average Rents and Ten Percent Highest Average Rents are listed by county in recently release publication titled “Cropland Rental Rates for Minnesota Counties”.  The rental rates come from rents paid by farmers who participate in Adult Farm Management programs across Minnesota. This publication provides a historical perspective on rental rates paid by a group of Minnesota farmers and trends in those rental rates over the past five years. This information is meant as a guide and starting point. The information and data is not meant to establish, determine, set, fix, or even hint at what actual rents should be. It is simply a reporting of historical land rental rates in Minnesota.

Historical rental data is included for years 2013 through 2017. Weighted average rental rates are listed by county for each year. The 2017 data also includes the median cash rent and the 10th and 90th percentile range, explained under “data re…

What's New in Farm Transition and Estate Planning Policy in the past year?

By Megan Roberts, Extension Educator

Over the past year, I have been asked often what is “new” in farm transition and estate planning. In general, there have been only a handful of recent changes in federal and Minnesotan laws and regulations impacting the farm succession process. Some of those changes are quite dramatic, such as the doubling of the lifetime estate and gift exclusion amount in the Tax Cuts and Jobs Act of 2017. Other projected changes were not passed into law, resulting in continuation of past policies. In this blog post, I will briefly overview federal level policy changes, Minnesota level policy changes, and end by outlining key tenants of farm succession that remain unchanged. This post covers the year from July 2017-June 2018.

What to Expect in 2018

By David Bau, Extension Educator

Heavy spring rains resulting in flooded fields and delayed planting for many farmers in southern Minnesota.  Fortunately winter gave wave to summer heat and planting was hectic right up to the insurance final planting dates for corn and soybeans.  The majority of farmers were able to get the crop in with a few wet areas having been left behind and planted around although some will have prevented planting this year.  So how does 2018 look now?  With later planting dates, crop maximum potential was lowered.

For corn, maximum corn yield is generally obtained when planting occurs in late April or early May (100 percent if planted by April 30th). In years when spring arrives late when there are few growing degree days during late April and the first half of May, maximum corn yield also can be obtained when planting occurs in mid–May.  A couple of studies by Dr. Jeff Coulter, University of Minnesota Extension Corn Specialist. One from 2009 to 2011 at Lambert…

Managing Farm Profit Margins - The 5% Club Update

By Don Nitchie, Extension Educator

A single 5% improvement may be easy to overlook, but you should not take this small improvement for granted. Increasing revenue 5% while also decreasing costs 5% can have a big impact on your bottom line.  We have studied the potential impact this can have on a Southwest Minnesota Farm Business management Association average farm in 2017.

The table below compares actual outcomes for the average Southwest Minnesota Farm Business Management Association farm in 2017, to the projected 2018 results for the average association farm if it joins “The 5% Club”. Our analysis of “The 5% Club” compares farm performance if the average association farm improves gross revenues by 5% and lowers operating costs by 5% over 2017 for 2018.

It is impressive how just these small changes result in Net Farm Income of an average farm doubling and Term Debt Repayment Capacity improves from 1.3 in 2017 to 2.3 in 2018.  In 2016, the same 5% changes would have almost tripled Net…

Prevented Planted Insurance Coverage Dates

By David Bau, Extension Educator

Heavy spring rains resulting in flooded fields have delayed planting for many farmers in southern Minnesota.  Many of these farmers will have to decide what to do when the final planting dates of May 31 for corn and June 10th for soybeans.

The USDA’s Federal Crop Insurance Corp. policies have prevented planting provisions for payment if planting cannot occur before the final planting date.  There are also options to plant after the final planting date, but with reduced insurance coverage.

For most of Minnesota, the final planting date for corn is May 31. It is May 25 for northern counties.  The final planting date for soybeans in Minnesota is June 10. The late planting period extends for 25 days after the crop's final planting date at this point the insurance coverage is reduced to 55% for corn and 60% for soybeans.

University of Minnesota Extension agriculture business management educators have posted extensive information regarding prevented and …

Dairy MPP - Strategies for MY Farm

By Nathan J. Hulinsky, Extension Educator

MPP

Dairy Margin Protection Program (MPP) was enacted in the Agricultural Act of 2014 (2014 Farm Bill). The program was an insurance mechanism for dairy producers to protect milk price/feed cost margin by selecting a coverage level from $4.00 to $8.00/cwt. Also producers need to select coverage percentage between 25% and 90% of annual pounds produced. The program initially had mixed results with most farmers only receiving enough payments to cover their enrolment fees. In April 2018 The Bipartisan Act of 2018 was passed, making changes to the MPP payment structure, resulting in better benefits to most dairy farmers.

Changes to MPP

Calculations are monthly, instead of bi-monthly of margins. Pounds of milk covered increased in Tier 1 to 5 million pounds/year, from 4.Premium rates reduced significantly.Certain groups, beginning, limited resource, disadvantaged, or military veteran farmers may qualify for administrative fees. Must re-enroll by June 1…

Outlook 2018 for Corn and Soybean Crops

By David Bau, Extension Educator

With heavy April snowfall farmers are just getting started planting their 2018 crops with hopes of good yields and good prices.  There has been plenty of spring moisture and now the cropping season will take off in full swing when the soil dries out.  Farmers have been blessed with three years in a row of above average crops. Will 2018 continue the trend?  The good yields helped many farmers survive the low prices and small profits the past couple of years. In Southern Minnesota corn farmers in the Adult Farm Management programs have averaged losses on corn production since 2014, while they were able to generate small profits on soybean from 2014 through 2016 turning to a loss in 2017.

Cash crop prices for 2018 corn are at $3.70 and soybean prices are $9.60 depending on local basis. These prices are 30ȼ better than a year ago for corn and 70ȼ higher for soybeans. December corn futures rallied 25ȼ from the April low price and soybeans futures have incre…

Thinking About Joining a Marketing Group

By David Bau, Extension Educator

Marketing groups and clubs have been in existence for many years and give farmers the opportunity to share and discuss marketing ideas and strategies. I have worked with several groups since 1999 and currently meet with four groups. Most groups consist of 10 to 20 member farms and meet 12 to 20 times per year for 90 to 120 minutes. Local sponsors are involved in promoting, developing and managing these groups.

Marketing groups are ongoing group training and discussion sessions focused on marketing methods, tools, issues, conditions, and trends. The sessions include formal teaching with research based materials from the University of Minnesota, and other credible sources along with discussion facilitated by Regional Extension Educators. Each group formulates a pre-harvest and post-harvest marketing plan that is used to benchmark individual marketing performance.

Typical members of marketing clubs are commodity grain and livestock producers of any size a…

Beginning Farmer Tax Credit

By David Bau, Extension Educator

In May 2017 a new tax credit for Minnesota beginning farmers became available.  The new law provides tax credits for the rent or sale of farm land or a variety of farm assets to beginning farmers.  Agricultural Assets include: land, livestock, facilities, buildings and machinery used for farming in Minnesota.

To qualify as a beginning farmer you must be entering or entered farming within the last 10 years.  You must provide a majority of the labor and management for farm located in Minnesota.
Have adequate experience and knowledge for type of farming you are engaged in.  Be able to provide positive projected earnings statements.  You are not directly related to owner of the agricultural asset.  Have a net worth that does not exceed current limit of $800,000.

The beginning farmer will need to participate in an approved financial management program.  Costs of this program may also be eligible for a tax credit for 3 years for maximum of $1,500 per year.

C…

To Rent or Not to Rent??

By David Bau, Extension Educator

Farmland rental rates have remained high even though grain prices have gone down significantly.  As grain prices rose farmland rental rates were slow to increase. When grain prices started to fall in 2013, farmland rental rates started to decline, but at a much slower pace than grain prices.

The average cash prices for corn and soybeans in 2012 in Worthington were $6.82 for corn and $12.64 for soybeans.  The average price of corn declined each year since while soybean prices peaked with an average price of $13.99 in 2013. From 2012 through 2016, corn prices declined by 54.5% and soybean prices by 27% , while average rents paid by southern Minnesota in adult farm management programs declined from a peak of $243.47 in 2013 to $226.85 in 2016 or 7%.  Corn and soybean prices declined by an average of 41% and if this was applied to 2013 average rental rates the average rate in 2016 would calculate to $143.65.

Many rents are still above $200, $250 and higher…

Comparing Corn and Soybean Cash Prices with Average Southern Minnesota Farmland Rental Rates

By David Bau, Extension Educator

The average cash price for corn and soybeans each calendar year since 2000 is listed in Table 1 below.  Columns 2 and 3 list the average cash prices each year in Worthington for corn and soybeans.  The Column 4 lists the average percent change in corn and soybean prices from the prior year.  Column 5 lists the average rent paid by 1200 farmers in Southern Minnesota who are part of an Adult Farm Management Programs.  Column 5 multiplies the price percent change by previous year’s actual average rents to determine the farmland rent each year.  Column 7 starts with the average rent $98.31 in 2000 and then multiplies this by the corn and soybean price change (-3.21) to determine a rental rate of $95.16 for 2001.  To determine the 2002 rental rate, start with the 2001 rate of $95.16 and multiply this by the price change (15.06) and to determine an average rent of $109.49 for 2002.  This process was repeated to determine rentals rate through 2017. There are …

Farm Resource Guide Available

By David Bau, Extension Educator

The Farm Resource Guide for 2018 is now available at many University of Minnesota Extension County offices across the state.  This resource guide includes a wide variety of useful farm business management information including the following items:

Custom ratesAverage farmland rental rates by countyFlexible Rental Agreements It includes lease forms for Cash Rent and Share Rent arrangementsFarmland sales information for all counties in MinnesotaInformation on charges for custom feeding, commodity storage, leasing buildings and various bin rental rates Current information on pasture rental rates, tree timber valuesMarketing information along with recent cost trends for MinnesotaCommodity price probabilities for corn, soybeans, alfalfa hay, straw, grass hay, hogs and cattleCorn and soybean yields by county Feedlot Rule Highlights and information on Manure Agreement and Easements Examples of Manure Spreading Lease and Land Application Agreement forms
This Re…

Third Annual Women in Ag Network Conference on February 15

By Megan L. Roberts, Extension Educator

The Women in Ag Network is excited to announce our third annual conference on February 15, 2018 in St. Cloud, MN at the Holiday Inn and Suites. Registration begins at 8:45 a.m. with conference programming from 9:15 a.m. to 3:30 p.m. This third annual event will be a day of learning and networking for women involved in agriculture. Our theme is “Overcoming Adversity.” The theme was selected to be a relevant and timely topic as farmers and agriculture face lower commodity prices and economic challenges.

Katie Pinke, publisher of AgWeek and blogger of The Pinke Post, is our keynote speaker.  Her presentation, “Accepting Interruptions to Define Your Path Forward,” will highlight that even the most well-orchestrated plans aren’t exempt from interruptions on the farm or off the farm. In this time of agricultural adversity, Katie will help attendees define their best path forward through life’s pivotal moments. Katie will draw upon trials and triumphs …