All about agriculture
At the 2013 Farm News Ag Show Wednesday, farmers heard:
They should expect another below-trend yield for Iowa row crops in 2014.
There is concern over market prices for corn if the U.S. produces another 14 billion bushel crop in 2014.
There are 10 common mistakes they make when planning farm successions.
That voluntary water quality practices does not mean optional, because demand to reduce nitrogen and phosphorus escaping into surface waters will not go away.
These were subjects covered by four speakers throughout the day, with another four speakers ready to address show attendees today.
This is the 12th year for the Ag Show, being held for the first time at Iowa Central East Campus, 2014 Quail Ave., on the east edge of Fort Dodge.
The show continues today from 7:30 a.m. to 3 p.m. A total of 2,500 people are expected to walk through the trade show area during the two-day event, said Dana Lantz, Farm News ad manager and show organizer.
Bill Northey, Iowa secretary of agriculture, will be speaking at 7:30 a.m., followed by three presentations through the day, including David Kruse, president of CommStock Investments, of Royal, at 8 a.m.; Kelvin Leibold, an ISU farm management specialist, at 10 a.m.; and Matt Neal, an ISU entomologist, at 1 p.m.
A free pancake breakfast will be served to the first 525 visitors starting at 7:30 a.m. until 9:30 a.m.
Visitors can also register to win a Kubota top and bottom set toolbox, provided by R&J Material Handling and Farm News, or a 1/16 die-cast metal replica of a Steiger Panther PTA 325 tractor, from Le Mars Toy Store. Register at the Farm News booth just inside the building entrance.
Dr. Elwynn Taylor, Iowa State University climatologist, told an audience of 90 during a morning presentation that as weather conditions are looking now, a fifth consecutive year of below-trend yields can be expected based on developing weather patterns.
Taylor said the Midwest is in its second year of a 20-year cycle of volatile winters, although the 2013-2014 winter may not be as cold as last year. He said the forecasted arctic breakout predicted to start last night will be the third arctic breakout already this season.
Concerning the 2014 growing season, he said predictions will be fine-tuned as the winter proceeds, but as of now he saw conditions favoring another below-trend yield year.
He went a step further, saying farmers will have to set their minds for managing low-yield risks for most of the next two decades.
This is due to 300 years of tracking weather patterns – a 40-year cycle of 20 mild and 20 volatile winters.
“We are at the beginning of 20 years of volatile winters,” Taylor said. That will culminate in volatile yields, he said.
“You’ll have to manage your risks.”
Farmers can best do that by watching the monthly production estimates from the U.S. Department of Agriculture, he said.
“Since 1956,” Taylor said, “the USDA has gotten estimates right just four times.
“And that’s good for you. USDA bases its estimates on perfect growing conditions. But you know the growing conditions for your fields, so you can manage your risk accordingly.”
Dr. Matt Helmers, an ISU ag engineer, told a crowd of 45 that the Iowa Nutrient Reduction Strategy is a voluntary, but not optional, mandate on the state to reduce nitrogen and phosphorus leaching into surface waters.
Helmers explained the INRS is requiring the state to reduce nitrogen escaping into streams and rivers by 45 percent and phosphorus by 29 percent.
Although meeting the mandate is not a simple one, it’s also not impossible and not participating in the reduction strategy is not a real option for farmers, he said.
“If we don’t show progress,” Helmers said, “there will be regulations and there is already talk about lawsuits.
“The demand for reducing N and P will not go away.”
Reducing nutrients is designed to protect drinking water quality downstream and to keep lakes and streams cleaner.
Helmers outlined a number of nutrient management practices designed to keep nitrates from surface waters and erosion-preventing measures to reduce phosphorus escapes.
In both practices, he said, cover crops will play an important part in keeping nitrogen from dissolving in water and flowing out tile lines in heavy rain events, as well as hold soil in place, keeping phosphates out of streams and rivers.
The process of studying how nutrients escape into surface waters “has opened the eyes of those in the Environmental Protection Agency that this will not be a simple solution; and that it’s not caused by farmers’ incompetence, but due to the demand for grains and the land practices that are employed to meet the demand,” he said.
Chad Hart, ISU’s grain marketing specialist, said he is “short-term bearish and long-term bullish for agriculture.”
He’s bearish in the next year or two because of the growing corn and soybean production around the world competing with the U.S. exports.
“I’m really amazed,” Hart told 90 listeners, “that we just harvested a record corn crop and we are still at a breakeven price. That’s how much the 2012 drought affected us.
“But what happens if we produce another 14 billion bushels? How will we chew through all this corn?”
He is bullish for farming incomes on the long term since world population will continue to rise, demand for food will increase and there are only so many acres that will produce food crops.
“And we’re sitting in the middle of the largest of the four most fertile regions in the world,” he said.
Melissa O’Rourke, an ISU farm and agribusiness management specialist, outlined to 65 listeners the 10 common mistakes people make in farm succession planning. They include:
– Procrastination. Sixty percent of farmers have no plan in place and 89 percent have no farm transfer plan. “What kind of mess are you leaving for your family?” O’Rourke asked.
– Failure to plan, thinking they won’t die soon. Death is not the only worry, O’Rourke said. Farmers should have powers of attorney in place for business and heath care decisions in event they become incapacitated, such as being in a persistent vegetative state through illness or injury.
– Failure to communicate end-of-life and succession decisions. “There should be no secrets about the plan,” she said. “The earlier you communicate the plan, the better the family can work through the emotions.”
– Treating all heirs equally does not mean all are treated fairly. She said a child that remains to work and adds value to the farming operation may feel cheated if their share of the inheritance is the same as those who moved off the farm.
– Failure to coordinate estate plans with property ownership. “Give away as much as possible before death,” O’Rourke said. “Sell off what the heirs do not want.”
– Doing nothing because the estate’s worth is too little to generate taxes. With land values up, she said, “you need to fully understand the fair market value of all property.”
– Lack of liquidity. “Death is not cheap,” O’Rourke said. Heirs need to cash flow for ongoing farm operations, to cover health care bills, pay taxes and other expenses.
– Failure to maintain good records. Farmers need to be sure all records are accessible to people who need them. “A lot of records are kept in safes and online,” she said, “but it does nobody any good if they can’t access them.” She recommended that a hard copy of all electronic records be easily accessible to one’s estate executor.
– Doing estate planning “on the cheap.” She said although there are numerous estate-planning forms available online, she recommended forming a team of professionals to help in the planning to assure all decisions are clear, practical and accomplish one’s goals.
– Failure to update or review the plan. “Estate planning is never done,” she said, recommending annual reviews to address business and farm changes.