MPP-Dairy Update

MPP-Dairy Background
MPP-DAIRY calculates a two month average margin using the US All-Milk Price/cwt minus the cost of feed needed to produce 100 pounds of milk including the feed needed for dry cows and youngstock. The ration for the feed cost calculation includes corn, soybean meal and alfalfa. Milk, corn and alfalfa prices will be taken from the National Agricultural Statistics Service (NASS) monthly publication “Agricultural Prices” and averaged in two months periods. Soybean meal prices will come from the Agricultural Marketing Service (AMS) Central Illinois, Decatur, prices. Two month periods will include January-February, March-April and so on. Since 1997 this margin calculation has averaged $8.50, but since 2007 it has averaged $7.40 per cwt (Figure 1). Since MPP-Dairy is an insurance program and dairy producers choose their margin coverage level, an indemnity will be paid if the margin calculated falls below the coverage level chosen. So far only one period, March-April 15, has triggered a payment at the $8 coverage level, 49.5¢ per hundredweight.

Figure 1: Historic Dairy Margins using MPP-Dairy Formula

Dairy farmers may enroll for 2016 MPP-Dairy coverage, July 1-Sept. 30 2015, at local USDA offices. Participating farmers must remain in the program through 2018 and pay a $100 administrative fee each year. Producers have the option of selecting a different coverage level, margin amount and percentage of milk covered, during open enrollment each year. In addition to margin levels selected, MPP-Dairy payments are based on an operation’s historical production which will increase by 2.61% in 2016 if the operation participated in 2015. Producers must submit form CCC-782 for 2016, confirming their Margin Protection Program coverage level selection, to the local Farm Service Agency (FSA) office. If buying coverage above the $4.00/cwt. catastrophic level for 2016, dairy producers can either pay the premium in full at the time of enrollment, or pay a minimum of 25% of the premium by Feb. 1, 2016. The remainder of the premium will be due June 1, 2016.
USDA has an online resource available to help dairy producers decide their level of coverage. A web tool, available at http://www.fsa.usda.gov/mpptool, allows dairy farmers to quickly and easily combine their unique operation data and other key variables to calculate their coverage needs based on price projections. Producers can review historical data or estimate future coverage based on price projections. The web tool can be used on computer, mobile phone, or tablet. Soon a revised web tool will be released which will factor in more individual dairy farm information to more accurately project the possible MPP-Dairy impact for the dairy.

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Margin Protection Program-Dairy 2016 Sign Up

The note below is from a news release posted by USDA’s Farm Service Agency. It discusses the open enrollment period for MPP-Dairy that began 1 July 15. This program is intended to assist in managing margin risk for diary producers. The margin calculation is not for an individual dairy farm but does allow  some measure of insurance against steep in margin as dairy producers experienced in 2009.

“2016 Enrollment Open of MPP-Dairy

Producers have the option of selecting a different MPP-Dairy coverage level during open enrollment each year. So far in 2015, only dairy farmers “buying-up” coverage at the $8.00/cwt. level have received any indemnity payments, partially offsetting premium costs.

In addition to margin levels selected, MPP-Dairy payments are based on an operation’s historical production. A dairy operation’s historical production will increase by 2.61% in 2016 if the operation participated in 2015.

USDA has an online resource available to help dairy producers decide which level of coverage will provide them with the strongest safety net under a variety of conditions. The enhanced Web tool, available at www.fsa.usda.gov/mpptool, allows dairy farmers to quickly and easily combine their unique operation data and other key variables to calculate their coverage needs based on price projections. Producers can also review historical data or estimate future coverage based on data projections. The secure site can be accessed via computer, mobile phone, or tablet, 24 hours a day, seven days a week.

Producers must submit form CCC-782 for 2016, confirming their Margin Protection Program coverage level selection, to the local Farm Service Agency (FSA) office. If buying coverage above the $4.00/cwt. catastrophic level for 2016, dairy producers can either pay the premium in full at the time of enrollment, or pay a minimum of 25% of the premium by Feb. 1, 2016.

For more information, visit FSA online at www.fsa.usda.gov/dairy for more information, or stop by a local FSA office.”

Nebraska Farmland Values and Rental Rates

The 37th “Nebraska Farm Real Estate Market Highlights” report was recently released. the average all-land value was reported as $3250 per acre, down 2% from 2014. Five of the eight Nebraska Agricultural Statistics Districts had declines in land values, Northeast, East, Southeast, Central And South, while three had increases, North, Southwest and Panhandle. The last three are heavily influenced by pasture land values which have increased.

The report lists factors affecting farm and grazing land values. Beef cattle prices are adding bullishness for hay and grazing land values. Two crop factors were negative for cropland values, current crop prices and high input costs leading to losses.

Hayland prices rose 20% statewide while grazing land rose 9% for tillable land and 16% for non-tillable grazing land. Crop ground prices dropped 4 to 9% with the largest drop in dryland cropland with no irrigation potential. Also the more marginal cropland had a larger value decline than higher quality farmland.

Even though land values declined over the past year, all districts and land types are higher than 5 years ago. Nearly all districts of Nebraska and ag land use classes are double or more than 5 years ago.The Northwest Ag district had the smallest percentage change, 86%, the Southwest district had the largest percentage change, 137%, in the value of all ag lands. Hayland is 191% higher and non-tillable grazing land is 136% higher statewide.

Active farmer/ranchers continue to be the majority of buyers for ag land in Nebraska, 89%, with only 3% of ag land purchases by out of state buyers. The largest group of NE ag land sellers were estates, 42% of transactions. There was variations for both buyer and seller by ag district. Compared to 2014, four Nebraska districts had higher land sales by active farmers, North, Southwest, Northwest and Central.

2015 cash rental rates for cropland for cropland declined in all ag districts. However grazing rental rates rose from 10 to 35% Monthly pair and stocker pasture rental rates set record levels.

via Red Willow Farm and Ranch Management | Keeping you up to date.

More hay price questions

More questions are coming in regarding hay prices. The new question was about oat hay. Quality oat hay can be used in beef heifer development but can under certain growing conditions be high in nitrates so testing is recommended. Current reported oat hay prices are in the neighborhood of $70 per ton for round bales.

Farmland Rental meetings

Landlord/Tenant Lease Workshops This August Across Nebraska
The Landlord/Tenant Cash Lease workshops offered in August will help landlords and tenants put together a lease that is right for both parties, and help maintain positive farm leasing relations.
Topics for discussion include:
– Latest information about land values and cash rental rates for the area and state;
– Expectations from the lease, including typical lease arrangements;
– Lease termination, including terminating handshake or verbal leases where the deadline is August 31, 2015;
– Lease communication, determining appropriate information sharing for both the tenant and landlord;
– Alternative cash lease arrangements, flexible provision considerations for your situation; and
– Other topics, like irrigation systems, hay rent, pasture rental agreements, and grain bin rental will be covered as time allows.
The UNL Extension Educator team of, Allan Vyhnalek, Robert Tigner, Jim Jansen, Jessica Groskopf, and Tim Lemmons, will present on these topics and provide common sense tips during the presentation. It is very helpful if both the tenant and landlord can attend together. It is also helpful if the spouse attends. Everyone is welcome to the workshop.
This free workshop is sponsored by the Nebraska Soybean Board. Refreshments and handouts are provided. Registration is requested by calling the host county of the workshop. Register by three days prior to the workshop you would like to attend to ensure that there are enough handouts and refreshments.
This workshop has been held extensively across Nebraska for the past four years with over 2,800 attending. The vast majority of both landlords and tenants find the workshop to be very helpful in improving communications, setting rental terms, and learning about the use of flex lease provisions. As crop budgets tighten, it is even more important to attend and listen to the latest discussion about leasing issues.
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

LANDLORD/TENANT MEETINGS

Date      City              Location                      Start time      Registration Phone #
Aug. 10 Dakota City Extension Office meeting room 1:00 p.m. 308-324-5501
Aug. 10 Ogallala Fairgrounds 1:00 p.m. 308-284-6051
Aug. 11 Norfolk Life Long Learning Center 1:00 p.m. 402-370-4000
Aug. 12 Fairbury Jefferson co. Fairgrounds 1:00 p.m. 402-729-3487
Aug. 12 North Platte West Central Research/Extension 6:00 p.m. 308-532-2683
Aug. 17 Weeping Water Cass Co. Fairgrounds 1:30 p.m. 402-267-2205
Aug. 17 Grand Island Hall Co. Fairgrounds 9:30 a.m. 402-385-5088
Aug. 17 Kimball 4-H Building, Fairgrounds 7:00 p.m. 308-235-3122
Aug. 19 Leigh Colfax Co. Fairgrounds 9:30 a.m. 402-352-3821
Aug. 19 Thedford Thomas Co. Courtroom 1:00 p.m. 308-645-2267
Aug. 19 Valentine Cherry Co. Extension Office 6:00 p.m. 402-376-1850
Aug. 19 McCook Fairgrounds Community Building 1:00 p.m. 402-345-3390
Aug. 20 Chadron 4-H Building, Fairgrounds 9:00 a.m. 308-327-2312
Aug. 21 Plainview Community Center 9:00 a.m. 402-329-4821
Aug 24 Wayne Wayne Fire Hall 9:00 a.m. 402-375-3310
Aug. 27 Columbus Pinnacle Bank(east) 1:00 p.m. 402-563-4901
Aug. 27 Alliance Library, Alliance 1:00 p.m. 308-762-5616
Aug. 28 Near Mead Ag Research and Dev. Center 9:30 a.m. 402-624-8030