Economic and Policy Update Newsletter
Cow-Calf Profitability Estimates for 2023 and 2024 (Spring Calving Herd) | EPU Article
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Secrets of Successful Farm Managers | EPU Article
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2023 Farmland Values | EPU Article
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2023 Farm Bill Overview and Update | EPU Article
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Stocker Outlook for 2023 | EPU Article
Read MoreWe strive to educate our communities and provide the most current information on relevant agricultural topics. Each issue is comprised of articles written by our extension faculty on topics ranging from global trade to the economics of small vegetable farms.
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Recent Articles
Stocker Outlook for 2024
Greg Halich & Kenny Burdine | March 28th, 2024
Temperatures are getting warmer, the grass is getting greener, and the calf market is starting to take off. These are tell-tale signs of spring in Kentucky, and we are experiencing all three. There are signs pointing to an early spring, which likely means that some stocker operators have begun placing calves in order to get ahead of the spring price run. But the strong calf market does create questions for stocker operators purchasing calves for sale this fall. The purpose of this article is to assess the likely profitability of summer stocker programs for 2024 and establish target purchase prices for calves based on a range of return levels.
The Ag Census Confirms Geographic and Commodity Shifts in the Kentucky Farm Economy
Will Snell | March 28th, 2024
The twenty-year time frame between the latest USDA Ag Census (2022) released earlier this year and the 2002 Ag Census occurred during a period of dramatic changes in Kentucky agriculture. Overall, the Census data reveal that the market value of agricultural products sold in Kentucky increased from $3.1 billion in 2002 to $8.0 billion in 2022. However, the increase was not spread uniformly across the state. The two most western Kentucky Agricultural Statistical Districts (Purchase and Midwestern) experienced increases surpassing 200%, while the Eastern and Northern Kentucky districts realized minimal gains (53% and 27% respectively).
Maximizing Value: 2024 Spring Application of Broiler Litter for Grain Crop Production
Jordan Shockley | March 28th, 2024
Spring is here and grain producers across the state are gearing up for planting. One of the many decisions producers have to make before planting is in regard to their nutrient management plan. Broiler litter provides a great opportunity as a complete fertilizer and is being produced and used throughout the state in grain production. However, the value of broiler litter can vary greatly depending on the management practices, nutrient content of the litter, soil test data and commercial fertilizer prices.
Cow-Calf Profitability Estimates for 2023 and 2024 (Spring Calving Herd)
Greg Halich, Kenny Burdine, and Jonathan Shepherd | February 28th, 2024
The purpose of this article is to examine cow-calf profitability for a spring calving herd that sold weaned calves in the fall of 2023 and provide an estimate of profitability for the upcoming year, 2024. Every operation is different, so producers should evaluate and modify these estimates to fit their situation.
Price Dynamics at Kentucky Farmers Markets, 2021-2023
Brett Wolff | February 28th, 2024
This month, we want to share some of the data we have from the most ubiquitous specialty crop direct market type we have in Kentucky—Farmers Markets. In 2023, there are 170 farmers markets in Kentucky where 3,000+ vendors sell a variety of specialty crops, meat, value-added, and other products (personal conversation, Sharon Spencer, KDA). Since 2004, the Center for Crop Diversification has collected price data from Farmers Markets in Kentucky.
Old Crop Balance Sheets and New Crop Projections: What would it take to get $6.00 Corn and $14.00 Soybeans?
Grant Gardner | February 28th, 2024
The first projections for the 2024/25 crop year were released on February 15th at the Ag Outlook Forum (AOF). These estimates indicate a more bearish situation in the 2024/25 marketing year than we are currently experiencing in 2023/24. As we came out of COVID/Russia-Ukraine-induced highs, prices have fallen rapidly. The season average price for corn in 2022/23 was $6.54/bu and is projected to decrease to $4.80 in 2023/24 and $4.40 in 2024/25.
2022 Tobacco Census Data for Kentucky
Will Snell | February 28th, 2024
The USDA conducts an agricultural census every five years with the latest having been released on February 13, 2024 reflecting the 2022 Census. Below are some highlights from the Census pertaining to Kentucky’s tobacco sector which undoubtedly has experienced the largest structural change of any sector and state in U.S. agriculture over the past two decades.
Grain Profitability Outlook 2024
Greg Halich | February 28th, 2024
Grain prices have dropped dramatically in the last year. Current prices for 2024 new crop delivery are around $4.15/bu for corn, $11.00/bu for soybeans (2/23/23). This is a decrease of around $1.00/bu for corn and $1.75/bu for soybeans compared to what these prices were expected one year ago.
Weathering The Storm
Jerry Pierce | February 28th, 2024
“Agriculture is by nature a cyclical industry.” So said the Federal Deposit Insurance Corporation (FDIC) in History of the Eighties - Lessons for the Future published in 1987. It still is, with net incomes cycling up and down over the decades. So how can farms “weather the storm” when farm income is cycling down? Long-term success in farming depends greatly on the ability of the farm business to meet obligations in the long term and short term. And it might be said that every business must meet its obligations this year to have a chance to meet the longer-term obligations.
U.S. Beef Cow Inventory Continues to Decline
Kenny Burdine | February 2, 2024
USDA-NASS released their January 2024 cattle inventory estimates on the afternoon of January 31st. Estimates came in pretty close to expectations and confirmed that the cowherd had continued getting smaller during the course of 2023.
5 Commandments for Bale Grazing in the East
Greg Halich | January 30th, 2024
I have had many people tell me they tried bale grazing and that it will not work under in conditions such as those found in Kentucky. In just about every case where they explained how they were implementing bale grazing, they were not adhering to one or more of the following fundamental concepts, which I will frame as the “Five commandments for bale grazing in the East.”
Farm Bill Update – January 2024
Will Snell | January 30th, 2024
Following the expiration of the 2018 Farm Bill on September 30, 2023, Congress extended the 2018 Farm Bill late last year until September 30, 2024. Congress has been forced to address budget issues during the early weeks in 2024, with a continuing resolution passed in mid-January to prevent a government shutdown. However, ongoing budget discussions to keep the government open beyond early March, along with a major tax reform bill, border security, and foreign aid packages will continue to monopolize floor debate in the coming weeks, leaving minimal, if any floor time to address reauthorizing a new farm bill.
Kentucky’s Agricultural Districts Program
Jerry Pierce | January 30th, 2024
Someone asked about Agricultural Districts recently. It sounded like a farm tax program, but I had to admit that I knew nothing about them, and that I would look into it. The program was created by the Kentucky Legislature in 1982. The purpose of the legislation is “to provide a means by which agricultural land may be protected and enhanced as a viable segment of the state's economy and as an important resource.”
Capital Investment Analysis
Steve Isaacs | November 29th, 2023
Investments in land, machinery, livestock, facilities, the things that will last, and hopefully make money, are long-term decisions with major implications for the business. Analysis of a major purchase can have a lot of moving parts and requires putting pencil to paper or numbers to a spreadsheet. Every investment will be unique… different costs, different outcomes, different net return estimates, different cash flow patterns.
Secrets of Successful Farm Managers
Kayla Brashears | November 29th, 2023
After spending over a decade analyzing a plethora of farm operations, I’ve learned a few things about what makes an operation successful. There isn’t a hidden formula anyone can follow to become successful, but there are best practices that operations can implement to position themselves favorably.
The Corporate Transparency Act and its Potential Impact on Kentucky Businesses
Jonathan Shepherd, Bill Eversole, and Trish Murphy | November 29th, 2023
On January 1, 2024, the Corporate Transparency Act (CTA) will go into effect, which has a potential impact on many of Kentucky's small businesses. This new law requires nearly all business entities to report their beneficial owners to the federal government. While this legislation has the potential to affect many of Kentucky’s small businesses, many have never heard of this legislation, much less the potential financial implications of non-compliance, or the time allowances given for compliance.
The Economic Value of Applying Broiler Litter in the Fall 2023
Jordan Shockley | November 29th, 2023
Spring application of broiler litter is ideal for maximizing the economic value but faces challenges that include wet soil conditions, lack of time to spread litter near planting, and availability of litter in the spring. Therefore, it is a common practice in Kentucky to apply broiler litter in the fall. While not optimal from an economic, agronomic, or environmental perspective, producers still need to understand the economic value from applying broiler litter in the fall.
Prospects for Winter Backgrounding 2023-2024
Greg Halich & Kenny Burdine | October 30th, 2023
After several years of cattle selling at frustratingly low price levels, continued herd liquidation has led to tight supplies and much higher calf prices in 2023. While markets have pulled back in recent weeks, calves and heavy feeders are moving at prices $50 to $70 per cwt above what was seen a year ago. Feed prices have also decreased over the last several months and most feeds will cost less this winter than last. All of these factors should be taken into consideration when one considers placement of calves into backgrounding programs this fall.
Mississippi River Level Impacts on Basis: 2022 Vs. 2023
Grant Gardner | October 30th, 2023
In 2022 and 2023, the river levels on the Mississippi slowed barge freight and, thus, crop exports out of Kentucky. When river levels decline, barge transportation slows, which causes barge freight rates to increase. When river levels are normal in Kentucky, the average October basis is near -$0.20 for corn or -$0.30 for soybeans. This year, producers that had to deliver when the basis was at its worst could have lost $0.30- $0.60/bushel on corn and $0.50-$0.70/bushel on soybeans.
2023 Kentucky Vegetable & Fruit Input Costs: Changes and Trends
Tim Woods, Emily Spencer & Matt Ernst | October 30th, 2023
Prices for many crop inputs have increased steadily since 2016. This report updates 2023 Kentucky price trends for key vegetable and fruit crop inputs: fuel and fertilizer, labor, plant protection products, and seed. These representative data may be used to help producers identify input costs and trends and update production budget estimates for 2024.
What to Consider When Renting Out Your Farm
Michael Forsythe | October 30th, 2023
According to 2022 KFBM data, only 27% of land farmed by Kentucky farmers is owned by the farmer. The remaining 73% is typically comprised of landowners that may or may not have a background in farming. In some cases, the landowner inherited the farm and may not even live in the same state as the farmland. There are several factors the landowners need to be aware of and consider when renting their farm.
Kentucky Farm Observations From Across the State
Kentucky Farm Business Management (KFBM) Program | October 30th, 2023
The Kentucky Farm Business Management Program is a program of the Department of Agricultural Economics at the University of Kentucky. Extension Specialists serve four Farm Analysis Associations working with cooperating members to improve farm management techniques and decisions through recordkeeping and analysis. Currently, KFBM serves 355 farms that are representatives of 49 counties. KFBM specialists work very closely with a diversity of farms and this article will share some of the real-time observations that they have seen this fall.
Fall 2023 Wheat Planting Decision
Greg Halich | September 29th, 2023
Corn harvest is now underway and Kentucky grain farmers will soon decide if and how much wheat they will plant this fall. Compared to last year there are significant decreases in wheat and soybean prices, but also significant decreases in fertilizer and fuel prices. The following analysis quantifies these relative changes to estimate the profitability for crops harvested in 2024.
Southern Ag Today: A Resource for Farmers and Policymakers in The Southern Region
Jordan Shockley | September 29th, 2023
The Department of Agricultural Economics here at UK is proud to be a part of Southern Ag Today. This daily email aims to keep producers and policymakers informed in easy-to-read articles to fit their busy schedules.
Suzy Martin | September 29th, 2023
It is important to understand the challenges facing tax preparers when it comes to accelerated depreciation and equipment purchases with trade-ins. The Tax Cuts and Jobs Act (TCJA) passed in 2018 had three significant changes to capital purchases and trade-ins.
Steve Isaacs | September 8th, 2023
Each August the USDA releases the results of their survey of farmland values. The survey includes data from approximately 9,000 tracts of land of about one square mile each across the continental United States. The survey takes place in early June and reports the separate values of cropland and pastureland, and the value of all land and buildings (i.e., farm real estate value). This year the national average is $4,080/acre, an increase of 7.4% from 2022. State-level values are also reported.
Can I Afford to Buy A Farm?
Kayla Brashears | August 29th, 2023
Most farmers will seek financing to complete a farmland purchase, and it’s important to have an idea of your purchasing position before you approach lenders. Even if you aren’t actively looking to purchase a farm, understanding your debt capacity is important in managing your farming operation. An unexpected death or life change may present an opportunity to purchase land, equipment, or buildings. If you know your financial position, you can evaluate clearly whether the deal is a good one.
2023 Farm Bill Completion Remains in Limbo as Congress Returns from its August Recess
Will Snell | August 29th, 2023
This past month Congress has been on its annual August recess and will be returning after the Labor Day holiday to begin the charge to pass a new farm bill. The current 2018 farm bill expires on September 30, 2023. In the midst of anticipated lower future prices for most ag commodities, higher borrowing costs, and reduced ad hoc government outlays for farmers, the ag community is urging Congress to pass this ongoing piece of legislation that has been in place since the New Deal programs of the 1930s.
2023 Tobacco Update
Will Snell | August 29th, 2023
The 2023 tobacco harvest is well underway for the 2023 season. This is setting up to be a late harvested crop as early weather conditions delayed progress. While there are pockets of very good crops, excessive rain has certainly had a negative impact on the crop in certain areas, especially the dark tobacco crop in the Purchase region.
What Do Higher Profit Farms in Kentucky Have in Common?
Lauren Omer Turley | August 29th, 2023
In today’s farming culture, the farm is run just as a business. The goal of most producers is to be at the top of the profitability curve in order to stay competitive. Data from the Kentucky Farm Business Management program for 2018 through 2022 were used to analyze differences between the highest-profit grain farms (high one-third) and the lower-profit grain farms (low one-third). Farms in the higher profit group were larger, had higher corn and soybean yields, cash rented a larger percentage of their acres, had a larger percentage of their acres in corn, and had higher gross returns and lower costs.
Interest Rates and Grain Storage
Grant Gardner | August 29th, 2023
For the 2023/24 marketing year, higher interest rates will negatively impact producers' costs for holding grain in storage, especially for producers utilizing operating loans. This article examines the operating loan interest cost of storing grains at different interest rates and lengths of time and how to calculate operating loan interest costs when the grain is stored. The article also provides charts to depict the change in operating loan interest cost of storing corn, soybeans, and wheat.
Highlights of the 2022 Kentucky Equine Survey
Jill Stowe | July 28th, 2023
As Kentucky’s equine industry navigated significant changes in the past decade, (emerging from the Great Recession in 2008-2009, the global COVID-19 pandemic in 2020-21, and natural disasters in 2021 and 2022), it experienced areas of both growth and contraction. The number of equine and equine operations declined, but income increased. In addition, the total value of equine and equine-related assets in the state was $27.7 billion in 2022, up more than 18% from 2012.
An INFORMATION System
Steve Isaacs | July 28th, 2023
Recordkeeping is often too narrowly defined and restricted to the financial side of the business. Have to file taxes, have to get loans. Both require some of the same information. The financial records are important for sure. However, they are only one of three overlapping information subsystems needed to manage the business effectively. Rather than thinking of “records” or “recordkeeping,” let’s think about “information systems” and financial is just one of them.
Dairy Margin Coverage Provides Some Help in Challenging Milk Market
Kenny Burdine | July 28th, 2023
Dairy producers continue to struggle with decreasing farm-level milk prices and high feed costs. For the first five months of 2023, the US All Milk price averaged $21.16 per cwt, which was more than $4 per cwt lower than the first five months of 2022. Every operation should consider all available tools when putting together their risk management plan, but it’s hard to imagine that DMC-Dairy would not be one of the tools in their risk management toolbox.
Summaries of Produce Auction Quantities and Prices Available Soon
Savannah Columbia | July 28th, 2023
The produce auction is a marketing channel for growers producing fruit and vegetable crops, nursery crops, and ornamentals. The produce auction serves growers as a market to sell large quantity crops while it serves buyers or consumers as a place to purchase bulk fresh, local products. The forthcoming report Three-Year Average Prices & Quantities at Kentucky Produce Auctions: 2020-2022, compares average volumes and prices for 16 crops (listed under Crops & Units) from two major Kentucky produce auctions for the 2020, 2021, and 2022 seasons.
Ag Export Growth Subsides Amidst a Changing Global Economy
Will Snell | June 29th, 2023
After achieving a record high of $196.4 billion in FY 2022 (October 1, 2021- September 30, 2022), USDA has for the second time reduced its 2023 FY forecast for U.S. agricultural trade – down to $181 billion compared to $184.5 billion estimate in February and its initial estimate of $190 billion last November.
2022 Financial Overview of Kentucky Farms
Tarrah Hardin | June 29th, 2023
After coming off a record high Net farm income (NFI) in 2021, grain farms in Kentucky Farm Business Management (KFBM) program saw their net farm income decrease to levels below pre-pandemic. The main cause of the downturn in NFI, comes from the increase in operating expenses.
Kentucky Dairy Product Shoppers: Perceptions of Local Sourcing and the Environment
Tim Woods, Shuoli Zhao, Azita Varziri, and Camille Dant | June 29th, 2023
A significant survey was completed during the early part of 2023, exploring the values and demand perceptions of Kentucky consumers of dairy products. This survey of 827 individuals explored a wide range of attitudes and behaviors connected with a range of food sourcing and impact considerations.
2023 May WASDE Update: Yield is King
Grant Gardner | May 30th, 2023
The USDA released its latest World Agricultural Supply and Demand Estimates (WASDE) on May 12th. The May WASDE report gives the first projections for the 2023/24 marketing year outside of February’s Agricultural Outlook Forum (AOF). One large addition to the May projections compared to February is that the May projections are based on the acreage reported in the March 31st Prospective Planting report.
Land Rental Agreements
Jennifer Rogers | May 30th, 2023
Land rental agreements can come in many shapes, sizes, parameters, and stipulations. Typically, we see three basic land rent types: cash rent, share rent, and the increasingly popular, flex rent. Each rental agreement is likely to be different. This article will just touch on the basics, realizing that each landlord and renter can develop their own individual agreement.
The PRIMER Method
Steve Isaacs | May 30th, 2023
It’s certainly a credit to the Land Grant System and the Cooperative Extension Service that most farm magazine articles about some new topic end with, “For more information, contact your local Extension office.” Rather than trying to be an expert on every topic, it has proved useful to provide a structure for answering the questions and conducting some analysis. Early in my career, I started using a simple acronym, PRIMER, to guide the discussion.
Current State of Carbon Market Policies
Jordan Shockley | May 30th, 2023
There are now policies that have passed or are currently being considered pertaining to carbon markets in the agricultural sector. Two important policies in the carbon market space are the Growing Climate Solutions Act (passed) and the proposed rule by the Securities and Exchange Commission (SEC) titled “The Enhancement and Standardization of Climate-Related Disclosures for Investors.”
2023 Farm Bill Overview and Update
Will Snell | April 28th, 2023
The 2023 Farm Bill debate continues to evolve in our nation’s capital amidst a lot of political challenges. The farm bill is a massive comprehensive piece of legislation covering everything from farm programs, conservation, rural development, forestry, trade promotion, nutrition, and even ag research and education. Generally, the farm bill comes before Congress every 5 years, with the current (2018) farm bill set to expire on September 30, 2023.
H-2A Guest Worker Program for Agricultural Employers
Laura Powers | April 28th, 2023
The H-2A Visa program is a popular program for farmers seeking to hire temporary, seasonal workers. For many years in Kentucky, you mostly found H-2A workers on Kentucky tobacco farms. However, as many farmers have experienced a lack of dependable employees, more and more non-tobacco farms have shifted to the H-2A visa program to supplement labor needs during the year.
Projected Plantings and Historical Accuracy
Grant Gardner | April 28th, 2023
In this article, I discuss the Prospective Planting report for 2023, which provides the first survey-based estimates of farmers' 2023 planting intentions. I first discuss the projections for the United States and Kentucky. I then look at how accurate the United States estimates have been in recent history and how the information could affect marketing year prices.
Where to Find Local Agricultural Products Near You!
Savannah Columbia | April 28th, 2023
May is almost here, which means backyard gardening, trips to agritourism venues, and farmers’ markets are about to be in full swing! The local, fresh fruits and vegetables we have been waiting for all winter are finally readily available to us. But have you ever wondered where to find it?
USDA Revising Tax Documents for Assistance Under the Inflation Reduction Act
Jerry Pierce | April 21st, 2023
USDA is mailing revised tax documents and a cover letter to about 12,500 direct loan borrowers who received financial assistance last year under Section 22006 of the Inflation Reduction Act. Affected borrowers should have already received a letter explaining the change in reporting and options to avoid or alleviate any tax burden from the financial assistance.
Will Snell | April 6th, 2023
This tobacco update includes 2023 tobacco budgets for burley, dark air-cured, dark fire-cured, cigar wrapper tobaccos, a summary of USDA’s 2023 Prospective Plantings report, and an overview of recent prices and market factors.
Stocker Outlook for 2023
Greg Halich and Kenny Burdine | March 30th, 2023
Spring has officially arrived in the Commonwealth, which always brings questions about stocker profitability. Calf prices typically increase seasonally as we move into spring, but have increased at a larger-than-normal rate since the end of 2022. While it is likely that some stocker operators purchased calves early, to get ahead of the seasonal spring price increase, most will place calves into stocker programs in the coming weeks.
Maximizing Value: 2023 Spring Application of Broiler Litter for Grain Crop Production
Jordan Shockley | March 30th, 2023
Spring is here and grain producers across the state are gearing up for planting. One of the many decisions producers have to make before planting is in regard to their nutrient management plan. Broiler litter provides a great opportunity as a complete fertilizer and is being produced and used throughout the state in grain production. However, the value of broiler litter can vary greatly depending on the management practices, nutrient content of the litter, soil test data and commercial fertilizer prices.
Bale Grazing Grant Comes to Kentucky and Beyond
Greg Halich | March 30th, 2023
“Bale Grazing: A Practical, Low-Cost, and Environmentally-Sound Management Strategy to Winter Beef Cattle”, is a NRCS Conservation Innovation Grant that has been funded for six states. One of the focuses of the project is to collect data that will provide NRCS with the answers to the many questions they have about bale grazing as well as winter feeding in general. NRCS will use the research that comes out of this project to guide policy decisions.
Changes in Kentucky Sales Tax That Apply to Farming
Jerry Pierce | February 28th, 2023
Legislation went into effect on the first of 2023 that made many services subject to Kentucky’s 6% sales tax. One change was to the qualifications for residential use exemption from sales tax on utilities. As a result, Kentucky sales tax will be charged for utility services furnished to any location that is not your place of domicile, even if it was formally classified as residential. There are other changes that apply to farming.
Valentine’s Day: One of a Flower Grower’s Favorite Holidays
Savannah Columbia | February 28th, 2023
Valentine’s Day has topped its historical spending record for the second year in a row. Popular gift items include candy or chocolate, flowers, greeting cards, jewelry, and/or dinner reservations. Experience gifts are making an impact in the local food and business scene, as local producers offer various “experiences” to consumers. For Valentine’s Day, many cut flower growers offered the gift of a bouquet subscription that could be purchased for someone.
Cow-Calf Profitability Estimates for 2022 and 2023 (Spring Calving Herd)
Greg Halich, Kenny Burdine, and Jonathan Shepherd | February 28th, 2023
The purpose of this article is to examine cow-calf profitability for a spring calving herd that sold weaned calves in the fall of 2022 and provide an estimate of profitability for the upcoming year, 2023. Even though calf prices were better in 2022 compared to 2021 (+$.15/lb), projected profitability is lower due to increases in cash costs ($94/cow higher in 2022).
Grain Profitability Outlook 2023
Greg Halich | February 28th, 2023
The grain markets surged to a new level after Russia’s invasion of Ukraine in late February 24, 2022. Prices have come down since their peak last spring, but they are still extremely high. Current prices for 2023 new-crop delivery are around $5.60/bu for corn, $14/bu for soybeans (2/22/23). This is an increase of around $.30/bu for corn and $.75/bu for soybeans compared to what these prices were expected one year ago.
U.S. Beef Cow Herd at Lowest Level Since 1962
Kenny Burdine | February 2nd, 2023
USDA-NASS released their January 1, 2023, cattle inventory estimates on the afternoon of January 31st. There was really no question that the beef cattle herd had gotten smaller; it was really just a question of how much smaller it had gotten. A combination of dry weather, higher input costs, and strong cull cow prices resulted in an 11% increase in beef cow slaughter during 2022.
Tobacco Update + Introducing a New Organization Supporting Tobacco Growers
Will Snell | January 30th, 2023
The 2022-23 tobacco marketing season is beginning to wind down following challenging growing/curing conditions for the 2022 crop. Buyers indicate that the subpar-quality crop turned out slightly better than expected. Grower prices will end up higher, but profitability will be lower given lower yields and inflated input prices.
Warm Welcome to Dr. Grant Gardner
January 30th, 2023
Dr. Grant Gardner was born and raised on a corn and soybean operation in southwestern Indiana. He received his B.S. in Agribusiness from Purdue University in 2017. He subsequently received his M.S. and Ph.D. in Agricultural Economics from the University of Nebraska-Lincoln and Kansas State University in 2019 and 2022, respectively.
Kentucky Sales Tax on Utilities
Jerry Pierce | January 10th, 2023
A legislative change was made to the qualifications for residential use exemption from sales tax on utilities. Effective January 1, 2023, the resident at a specific service address is responsible for declaring it as their place of domicile and the utility services exempt for residential use. Kentucky sales tax will be charged for utility services furnished to any location that is not your place of domicile, even if it was formally classified as residential.
The Economic Value of Applying Broiler Litter in the Fall of 2022
Jordan Shockley | November 29th, 2022
Spring application of broiler litter is ideal for maximizing the economic value but faces challenges that include wet soil conditions, lack of time to spread litter near planting, and availability of litter in the spring. Therefore, it is a common practice in Kentucky to apply broiler litter in the fall. While not optimal from an economic, agronomic, or environmental perspective, producers still need to understand the economic value of applying broiler litter in the fall.
More with Less.... Really?
Steve Isaacs | November 29th, 2022
We’ve all heard it. Budgets are tight. Profits are down. Vacancies are not filled. People are laid off. So… those who are left have to do their own jobs… and the jobs of those who aren’t here… and we’re going to do MORE? REALLY? It’s well-intentioned and probably said in an attempt to motivate those who are still around. Most bosses, managers, and administrators have probably said it at one time or another, “We have to do more with less.”
Tax Management is Still Important – Even in a Down Year
Jennifer Rogers | November 29th, 2022
With farm production being down, compared to recent years, it may come as a surprise to many that tax management is still vitally important. While some of the 2021 revenue may have been recognized last year, many bushels of crops were held over to sell in early 2022. Most farms are cash-based taxpayers, meaning that any crop sales held over to the following year will be taxed in the year they were received. This means that even this drought year, with reduced production, could still come with a big tax bill.
The Center for Crop Diversification: A Resource to Farm Market Vendors and Retail Markets
Katie Fortney | November 29th, 2022
Kentucky producers are occupied running their operations for a significant portion of the year, so cold-weather months are the perfect time to explore resources to start formulating new and prosperous ideas for the next season. The Center for Crop Diversification is an invaluable resource that provides the meaningful support necessary to help Kentucky’s producers accomplish their goals.
Prospects for Winter Backgrounding 2022-2023
Greg Halich & Kenny Burdine | October 31st, 2022
Feeder calf prices in Kentucky showed a great deal of strength for much of 2022. However, worsening drought conditions have combined with seasonal tendencies and that same weight steer calf is now selling for $15 to $20 less per cwt. Winter backgrounding profitability has a significant impact on calf prices as those winter backgrounders are competing with feedlots to purchase calves for placement in the fall. The purpose of this article is to examine potential returns to backgrounding programs for the upcoming winter.
Retirement 2022
Tarrah Hardin | October 31st, 2022
With high input and equipment prices, some producers are thinking of exiting in the next few years. In order to do this, they are starting to plan now so they can manage tax liability and protect any equity they have built within their business. When it comes to retiring, having a plan to navigate all the possible issues that might come up should be number one on the producer's to-do list. Rushing through things could bring on unexpected tax liabilities as well as issues down the road.
The Auction Market for Kentucky’s Front Porch Staples: Mums and Pumpkins
Savannah Columbia | October 31st, 2022
Mums and pumpkins are staples of the Autumn season in our state. Whether they are used as a decoration or the critical piece of a pumpkin carving contest – mums and pumpkins are bought and sold through many market channels this time of year. A specific market channel they make their way through is the produce auctions in our state.
U.S. Ag Exports Remain Strong Amidst a Lot of Headwinds
Will Snell | October 31st, 2022
Despite tight supply inventories, shipping and other transportation challenges, a higher valued U.S. dollar, and an overall slowing global economy, U.S. agricultural export sales are set to establish record levels in 2022. The value of U.S. ag exports is up 16% through the first eight months of this year relative to the same period in 2021. Higher prices are creating the increase, with aggregate export volume down 3%.
2022 Farmland Values
Steve Isaacs | September 29th, 2022
Land values are a good indicator of profitability in agriculture. Profits tend to accrue to the land and are reflected in sale prices and rental values. Kentucky’s farm real estate values increased 8.8% according to the annual Land Values Summary released by USDA in August. Average real estate value in the Commonwealth increased to $4,350 per acre, up from the $4,000 per acre reported in 2021.
Farm Employee Retention
Suzy Martin | September 29th, 2022
Hiring and managing employees is one of the least liked tasks a farm operator faces. Questions about the cost of hiring employees are an often-asked question of Kentucky Farm Business Management Program (KFBM) specialists. Farm employers need forward-thinking ideas aimed at keeping good employees.
Fall 2022 Wheat Planting Decision
Greg Halich | September 29th, 2022
Corn harvest is now underway and Kentucky grain farmers will soon decide if and how much wheat they will plant this fall. Compared to last year there are significant increases in wheat and soybean prices, major increases in all fertilizer prices, and fuel prices that have almost doubled. The following analysis quantifies these relative changes to estimate the profitability for crops harvested in 2023.
Carbon Programs for Woodland Owners in Kentucky
Jordan Shockley and Jacob Muller | September 29th, 2022
As carbon programs continue to evolve and expand throughout the country, many programs focus on agriculture, specifically sequestering carbon in row crop production. While carbon programs in the agriculture sector garner most of the attention, another opportunity is on the horizon for Kentucky woodland owners to participate in these programs. Forest-based carbon programs are beginning to take shape and expand across the U.S., including Kentucky.
Optimism for Burley???
Will Snell | August 30th, 2022
For those of you who have gotten past the title, it is not a typo. Yes, the Kentucky burley sector has lost over 70% of its market over the past couple of decades, while the number of farms growing burley in the Commonwealth has dwindled by more than 90%. But market conditions have changed for 2022.
Relating Farm Financial Terms to Real Life
Kayla Brashears | August 30th, 2022
A producer that works with any type of lending institution may hear their lender use words like liquidity, solvency, and profitability. A producer may know that their Debt-to-Worth is good or their Current Ratio is bad. However, oftentimes there is a disconnect between paper ratios and the daily farm operation. Outlined below are five pillars of financial health and their effect on daily operations.
USDA-FSA's Livestock Indemnity Program
Kenny Burdine | August 9th, 2022
USDA’s Livestock Indemnity Program (LIP) is administered by the USDA Farm Service Agency (FSA) and is intended to help compensate producers for greater than normal levels of livestock deaths from adverse weather, disease outbreaks, and predator attacks. As I try to process the disastrous impact of the recent flooding in Eastern Kentucky, I felt like it might be a good time for a reminder of how the LIP program works as there is potential for producers to receive payments from this recent event.
Mid-year Cattle Report Continues to Show Decreasing Cattle Inventory
Kenny Burdine | August 3rd, 2022
In late July, USDA-NASS released their mid-year estimates of U.S. cattle inventory. As expected, the report showed lower inventory across most all cattle types. All cattle and calves were estimated to be down by just under 2%, while beef cow inventory was estimated down by 2.4%.
I Have This Farm, Now What?
Michael Forsythe | July 29th, 2022
What do I do with the farm I just bought? Although this sounds like a question that should be asked before you buy the farm, there may be circumstances that cause you to acquire a farm before deciding what to do with it. No matter the circumstance, deciding what to do with the farm requires careful consideration. In this article, we will look at several decisions that need to be made when purchasing or inheriting a farm.
Hay Production Cost Increases in 2022 and Management Implications
Greg Halich | July 29th, 2022
Costs for hay production have skyrocketed in 2022. Fertilizer is driving the bulk of the overall increase, followed by fuel, and then general cost increases for other categories. While we can debate the exact causes of all these increases, we have a serious situation that needs to be understood and dealt with.
Historical Farm Income and Expenses
Lauren Omer Turley | July 29th, 2022
Agriculture seems to be on a roller coaster recently with the volatile commodity markets, energy costs, and the tough summer weather. Looking back over the last ten years, grain farmers have seen a wide range of commodity prices and yields. There has been much more variance on the income side than the costs per acre. It is interesting to look at trends over the past ten years using data from the Kentucky Farm Business Management (KFBM) program.
Consumer Covid Crisis Edges Back – A Little
Azita Varziri and Tim Woods | July 29th, 2022
Covid represented a significant shock in 2020 to the U.S. food system as well as to consumer perceptions about food. While many consumers were forced to rethink where and how they sourced food, these sourcing options were also framed by values and perceptions consumers held about their food. Issues of affordability, safety, local food economies, and choice were measured against rapidly emerging options to source. There is some initial evidence that some of the initially acute demand and values driven by Covid around food have edged back, at least a little.
U.S. Ag Exports/Trade Policy Update as of June 2022
Will Snell | June 30th, 2022
USDA recently updated their trade forecast for FY 2022 projecting a record-high U.S. ag export level totaling $191 billion, 11% higher than last year’s record high and 35% above the 2016-2020 average. Gains in U.S. ag trade are occurring despite a slowing global economy and a higher-valued U.S. dollar. However, the historic high export values for FY 2022 are in response to higher commodity prices as export volumes are projected to be lower for most agricultural commodities/products.
High Path Avian Influenza Update and the On-Farm Financial Impacts from an Outbreak
Jordan Shockley | June 30th, 2022
In 2014/15, the U.S. poultry industry experienced one of the most significant animal health emergencies due to high pathogenic avian influenza (HPAI), also known as “bird flu.” Federal expenditures to control the outbreak and pay poultry growers for lost birds exceeded $1 billion. Unfortunately, the poultry industry is experiencing another outbreak challenging the scale of 2014/15.
Circle of Concern and Circle of Influence
Steve Isaacs | June 30th, 2022
Much of our discussion is on items of concern, like prices and input supply problems, certainly important, but largely beyond our individual influence. Is it important? Sure. Is it something we can influence? No. Do we have to manage around it? Yes. While an individual cannot manage the price, they can monitor and manage use and efficiency. While an individual cannot manage a supply chain interruption, they can anticipate and plan to accommodate disruptions and delays.
The Cost of a Bad Hire
Steve Isaacs | May 31st, 2022
You need help and you need it now! Add the competition from $15-18/hr service sector wages to the mix and the situation seems almost hopeless. Someone shows up looking for a job and it can seem like an answered prayer. The temptation is to say, “Can you start today?” That should be the last question you ask, not the first.
Agricultural Sales Tax Exemption Now Streamlined
Laura Powers | May 31st, 2022
On March 20, 2022, Governor Andy Beshear signed Senate Bill 121 enacting a streamlined process for eligible farmers to receive a sales tax exemption on eligible purchases. The recently approved legislation renames the AE as an “agriculture exemption license number.” The new streamlined bill appears to provide some relief to retailers by eliminating their requirement to maintain an exemption certificate on file.
A Quick Look at Kentucky's Favorite Summertime Small Fruit: Strawberries
Savannah Columbia & Katie Fortney | May 31st, 2022
Summertime is upon us, and strawberries are filling the refrigerators of many homes in Kentucky. Strawberries, along with blueberries and blackberries, are staple crops in the small fruits business. With higher consumption rates, comes the potential for increases in prices.
What is the Driving Force behind Carbon Programs in the U.S. and Why Agriculture?
Jordan Shockley | April 28th, 2022
As new carbon programs continue to become available to row crop farmers across the country, understanding the driving force behind why these programs exist in the first place is key to determining their longevity. This article goes in-depth to address the question of why? Why do these carbon programs currently exist, and why are they focused on the agriculture sector?
Food Price Inflation - Trends and Implications for U.S. and Global Consumers
Will Snell | April 28th, 2022
Inflation dominates today’s conversation among the media, politicians, and everyone impacted–i.e., all of us. This article highlights the effects of inflation on ag (i.e., food) consumers and compares food price inflation in the U.S. versus global consumers.
3 Tips for Farm Management During Rising Inflation
Jennifer Rogers | April 28th, 2022
With input prices on the increase and so many things changing with our economy, it is important that producers think about how to manage during rising inflation. There is nothing that we can do to control the prices that we have to pay for products, we can only make sound management decisions about what we purchase and how we manage cash, and the cost of money that is borrowed.
The Importance of Agriculture for Kentucky: March 2022 Report Update Now Available
Sarah Bowker | April 28th, 2022
Our unit, the Community and Economic Development Initiative of Kentucky (CEDIK), recently updated the 2015 report, The Importance of Agriculture for Kentucky. The report defines the economic impact of the Agricultural sector on the Kentucky economy. In our March 2022 update, the primary finding is that the total economic impact of agriculture in Kentucky in 2019 equaled $49.6 billion, representing an 8.8% increase from the economic impact of $45.6 billion in 2012.
Maximizing Value: 2022 Spring Application of Broiler Litter for Grain Crop Production
Jordan Shockley | March 31st, 2022
One of the many decisions producers have to make before planting is in regard to their nutrient management plan. Broiler litter provides a great opportunity as a complete fertilizer and is being produced and used throughout the state in grain production. However, the value of broiler litter can vary greatly depending on the management practices, nutrient content of the litter, soil test data and commercial fertilizer prices.
Grain Profitability Outlook 2022
Greg Halich | March 31st, 2022
The grain markets had already been climbing before Russia invaded Ukraine on February 24th. Since then, prices have been on a tear, particularly for wheat and corn. Tempering the increased revenue from higher grain prices are steep increases in fertilizer and fuel prices. Fertilizer prices have been rising steadily since last winter and we now have prices that are at all-time highs. This article will evaluate the combined effect of the increases in both commodity and input costs, and estimate profitability for the 2022 crop.
Summer Stocker Outlook for 2022
Greg Halich & Kenny Burdine | March 31st, 2022
Driving through the Commonwealth it is clear that spring has arrived and we are seeing signs of pastures growing. Stocker operators are starting to place calves on pasture, which typically pushes calf prices to their seasonal highs. As of late March, calf prices have increased by more than $20 per cwt from their lows last fall. Simply put, the futures market is suggesting that the price of heavy feeders between spring and fall should increase substantially, which should be reflected in strong calf prices this spring.
Pre and Post-COVID Analysis of Select Spring Crops at the Auction
Savannah Columbia | March 31st, 2022
Spring is on the horizon in Kentucky. Many specialty crop growers have already begun thinking about which fruits and vegetables to cultivate and the ideal market channels in which to sell. There are many market channels available to producers – an important market channel for both Kentucky and many of our growers is the produce auction. While growers do not receive the same price premium at the auction compared to an urban farmer’s market, there are reasons the auction is a viable market channel.
Impact of Government Payments
Jerry Pierce | February 28th, 2022
How important is a new farm bill? That depends on a number of factors like what you grow, where you farm, and what happens during a year to trigger payment to you. What impact have farm bills and other government programs had on Kentucky farms in terms of profitability over the last decade? They appear to have had a considerable effect.
Cow-Calf Profitability Estimates for 2021 and 2022 (Spring Calving Herd)
Greg Halich, Kenny Burdine, and Jonathan Shepherd | February 28th, 2022
The purpose of this article is to examine cow-calf profitability for a spring calving herd that sold weaned calves in the fall of 2021 and provide an estimate of profitability for the upcoming year. Every operation is different, so producers should evaluate and modify these estimates to fit their situation.
2022 Tobacco Budgets
Will Snell | February 28th, 2022
The 2022 Kentucky-Tennessee tobacco budgets for burley, dark air-cured, dark fire-cured, cigar wrapper tobaccos are now available for download on our budgets page. As we always like to remind our users, budgets are just a tool that producers should draw upon in their decision-making. Every farm will have a different set of assumptions based on its unique production, management, and marketing outcomes.
Reducing Your Dependency on Commercial Fertilizers Strategies for Cattle Farms in 2022 and Beyond
Greg Halich | February 28th, 2022
Fertilizer prices have risen to all-time high levels in the last few months. Nitrogen and potassium fertilizers have both more than doubled over the last year. This article focuses on three practical methods that can significantly cut fertilizer costs on cattle farms, and to possibly eliminate the dependency on commercial fertilizer entirely.
Beef Cattle Numbers Continue to Decline
Kenny Burdine | February 2nd, 2022
USDA-NASS released their January 1, 2022 cattle inventory estimates on January 31st. Beef cow slaughter was significantly higher in 2021, so expectations were for continued contraction of cattle inventory. The USDA report confirmed that and provided some perspective on the magnitude of these decreases. Read more >>
IRS Extends March 1 Filing Date for Kentucky Farmers Affected by December Tornadoes
Jerry Pierce | February 1st, 2022
The Internal Revenue Service has announced that certain farms affected by the December 10th severe storms and tornadoes now have until May 16, 2022 to file 2021 returns and pay tax due. Read more >>
Update on Agriculture Exemption Number for Sales Tax Exemption on Farm Purchases
Jerry Pierce | January 28th, 2022
The application deadline for farms with existing Exemption Certificates on file with farm suppliers was January 1, 2022. Applications are still being accepted for existing farms. Farms that do not have existing Exemption Certificates should also apply as soon as possible in order to qualify for the sales tax exemption. Read more >>
Price Risk Management Tools for Cattle Producers
Kenny Burdine | January 28th, 2022
The last few years are unlikely to be remembered fondly by many cattle producers. Large cattle supplies, a global pandemic, weather challenges, and a sharp increase in feed prices have all impacted feeder cattle values. As I write this on January 21, 2022, there is more than a $15 per cwt increase in CME© feeder cattle futures from the March contract to the August contract. This article will briefly discuss some tools available to cattle producers should they want to protect themselves from downside price in 2022. Read more >>
Demand for Certified Kitchen Use Nationally and in Kentucky
Camille Dant | January 28th, 2022
Many Certified Kitchens saw a shock to their system and a halting of kitchen rentals and revenue as COVID-19 made its impact. Certified or commercial kitchens, also known as shared use kitchens, are commercially-licensed spaces where producers can prepare their products legally while providing budget and schedule flexibility that small businesses may need. Nationally and locally, these kitchens saw shifts in demand for the use of their space. Read more >>
Inflation - "Good" or "Bad" for Agricultural Producers and Consumers?
Will Snell | January 28th, 2022
Inflation has been headline news for several months and certainly an issue impacting all businesses, industries, and all of us as consumers. Last year the monthly inflation rate averaged just under 5% and in its latest report (January 12, 2022) the BLS indicated that prices over the past 12 months increased 7% -- the largest December to December percent change since 1981. Read more >>
The Dairy Gauge Benchmarking Tool
Jerry Pierce | January 28th, 2022
Benchmarking compares your farm’s performance to past performance or to established measures of success. The benchmark is some measure of a goal, or a range of what is desirable and what is not. You do this all the time, comparing this year’s yields to past years or this cow’s performance to others in the herd. These comparisons lead to informed decision-making, especially in managing the cow herd. Comparing your business performance is far less common, especially to the performance of other dairies. Read more >>
Opportunity or Obligation
Steve Isaacs | November 23rd, 2021
Baby Boomers are in the process of transitioning trillions of dollars of assets to Millennials and Gen Zers. This includes farming Baby Boomers. Family discussions about passing the business to the next generation should start with, “do you want to farm?” and “do I want you to farm?” Read more >>
Economic Value of Applying Broiler Litter in the Fall | 2021
Jordan Shockley | November 23rd, 2021
Spring application of broiler litter is ideal for maximizing the economic value but faces challenges that include wet soil conditions, lack of time to spread litter near planting, and availability of litter in the spring. Litter applied in the fall to fallow cropland will suffer from ammonium volatilization and leaching resulting in little to no nitrogen available to the crop come spring. Read more >>
Building a Farm Balance Sheet
Kayla Brashears | November 23rd, 2021
As December 31 approaches, producers should work towards developing a quality balance sheet. Doing so is critical to measure business growth year over year, liquidity, solvency, and borrowing power. It is best to complete the balance sheet at the same time each year. For most cash-basis taxpayers, such as farmers, December 31 is a great post-harvest time for completion. Read more >>
Family Living Expenses on Kentucky Farms
Steve Isaacs | October 28th, 2021
There is likely no single item in a farm business cash flow with more uncertainty and more variability than “family living expense.” We tend to live on what’s leftover after paying debt and taxes. However, the Kentucky Farm Business Management program does have accurate family living data for some of the farms in their records and management program. Read more >>
Bookkeeping Tips for Multi-entity Operations
Suzy Martin | October 28th, 2021
There are multiple reasons a farming operation might separate its business into multiple entities. If an operation is part of a program like Kentucky Farm Business Management, not only can they be advised about the pros and cons of multi-entity structures but can also be educated about the importance of following through with the changes new business structures bring. Read more >>
COVID-19 and Kentucky's Migrant and Resident Agriculture Worker Population
Savannah Columbia | October 28th, 2021
Kentucky is home to a multi-billion-dollar agriculture industry which operates in part by the labor inputs of foreign-born residents and migrant or H2A workers. Exposure risk for COVID-19 among agricultural workers can be higher than expected because many farm crews carpool or travel together and share sleeping quarters or communal areas which may be difficult to social distance in. Read more >>
New Features to Enterprise Budgets
Greg Halich | October 28th, 2021
Enterprise budgets are designed to help farmers estimate profitability in the current and future growing seasons, and are also used by lenders and other agricultural-related professionals. Expected year-to-year changes in profitability can help farmers make decisions related to cropping decisions. Read more >>
Tools to Manage Risk for Dairy Producers
Kenny Burdine | September 30th, 2021
While producer price differentials (PPD’s) have been less of an issue thus far in 2021, increasing feed prices are hammering dairy margins. Milk price volatility and rising feed costs continue to be risks that dairy producers are forced to manage. Fortunately, there are several tools available to dairy producers... Read more >>
Fall 2021 Wheat Planting Decision
Greg Halich | September 30th, 2021
Corn harvest is now underway and Kentucky grain farmers will soon decide if and how much wheat they will plant this fall. Compared to last year there is a significant increase in wheat and soybean prices, as well as major increases in all fertilizer prices. Read more >>
Characteristics of Higher Profit Farms
Lauren Omer Turley | August 31st, 2021
In today’s farming culture, the goal of most producers is to be at the top of the profitability curve in order to stay competitive. Although crop yields do play a major factor in management returns, the diversity of the operation also has an impact. Read more >>
Small Fruit, Big Local Demand
Brett Wolff | August 31st, 2021
With Kentucky Farmer’s Markets regularly reporting strawberry prices between $5 and $8 per quart, blackberry prices between $5 and $12 per quart, and blueberry prices of $7-12 per quart, these fruits could be great supplemental products for sellers looking to expand their offerings with something customers want. Read more >>
The Steer-Bull Price Differential: A Historical Perspective
Kenny Burdine | August 31st, 2021
In extension settings, I am often asked whether I think it pays for a cow-calf operator to castrate bulls and sell steers. Castration is not without cost as it requires time and facilities and does stress calves for a period of time. Like so many management decisions, there are numerous ways that one can look at this decision and there is more to be considered than economics alone. Read more >>
Steve Isaacs | August 16th, 2021
Average Kentucky farm real estate values were $4,000/acre as reported in the annual Land Values Summary released by USDA on August 6. This was 2.0% higher than 2020 and the first-time average values have reached $4,000. Nationally, farm real estate was valued at $3,380 up 7.0% from 2020 and the largest percentage increase since 2014. Read more >>
Grain Market Shift and Profit Implications
Greg Halich | July 27th, 2021
The grain markets have been on a tear for the last year and have exceeded just about everyone’s expectations as to where they would be going into the summer of 2021. Current prices for 2021 fall delivery are near $5.50/bu for corn and $13.50/bu for soybeans in many areas in Kentucky (7/22/21). If you haven’t marketed much of your 2021 crops now would be a good time to start getting serious about it. Read more >>
Mid-Year Inventory Report Suggests Opposite Trends for Beef and Dairy Numbers
Kenny Burdine | July 27th, 2021
On Friday, July 23rd, USDA-NASS released their mid-year estimates of US cattle inventory. Most all beef-related inventory categories were lower, with all cattle and calves down 1.3% from July 1, 2020. The story for dairy cow inventory was much the opposite as milk cow numbers were up 1.6% from a year ago and USDA reported a 2.5% increase in dairy heifer retention. Read more >>
"There's an App for That"
Jordan Shockley and Morgan Waldner | July 27th, 2021
While there are hosts of mobile apps dedicated to agriculture, there are also mobile apps that deal specifically with agricultural economics topics. Whether you are looking for pricing information for commodities or help with record-keeping, there’s an app for that. Read more >>
The Importance of Including Non-Cash Expenses
Michael Forsythe | July 27th, 2021
When farmers are evaluating their farm profitability, many times, they will only include their cash expenses and they will ignore a very important component of their true profitability. It is very important for a farmer to understand that cash expenses are not the only expenses to a farming operation. If a farmer does not include these non-cash expenses, they will inflate the true earnings of their farming operation. Read more >>
Agriculture Exemption Number Now Required for Tax Exemption on Farm Purchases
Jerry Pierce | July 19th, 2021
A new Kentucky law requires that farmers apply for an Agriculture Exemption Number to make qualified purchases for the farm exempt from sales tax. Farmers may still use Forms 51A158 and 51A159 without an Agriculture Exemption Number through June 30, 2022, by using their driver’s license number. Exemption Certificates without an Exemption Number will expire and no longer be valid as of July 1, 2022. Read more >>
Estate Transfer under Proposed American Families Plan
Jerry Pierce | June 29th, 2021
On May 28th the Biden Administration released a general explanation of its proposed tax changes. This includes an explanation of proposed changes in the American Families Plan that would tax transfers of appreciated property by gift or upon death, tax capital income for high-income earners at ordinary rates, increase the top marginal income tax rate, and apply the 3.8-percent Medicare tax to all trade or business income of high-income taxpayers, including transfer of assets. Read more >>
Does the IRS Consider my Farming Operation a Hobby Farm?
Tarrah Hardin | June 29th, 2021
Many producers that have both farm and non-farm income, may question if the IRS considers their farming activities to be a “business” or a “hobby”. This is a very important distinction to both the farmer and the IRS due to the IRS treatment of business income versus “hobby” income. The IRS has nine factors they use to determine the status of the farming operation. Read more >>
People Skills: Appropriate Feedback
Steve Isaacs | June 29th, 2021
People are the most important resource in a farm business. However, managing people is often the least developed of the skills necessary to run a successful farm business. If you think praising people when they do something right and criticizing them when they do something wrong is all there is to knowing how to provide feedback, then don’t be surprised that things aren’t going well in the people part of the business. Read more >>
It May be a Good Time to Sell Your Mature Hardwood Timber
Chad Niman and Bobby Ammerman | June 29th, 2021
If you have purchased a sheet of plywood or a 2 X 4 stud from your local lumber yard or box store recently you very likely have noticed that wood product prices have skyrocketed. The demand for wood has been on the increase and the prices for timber and lumber have risen along with the products. If you are a woodland owner with mature timber, it might be a good time to consider selling—if it fits in with your overall woodland management plan. Read more >>
How Hay Became a Four Letter Word
Greg Halich | May 28th, 2021
In some circles of the progressive forage community, hay has already become a four-letter word. It’s been demonized for sucking out the profits on cattle farms and has stigmatized underperforming farmers who feed it as a sign of weakness. Hay should be considered a tool, and like any tool, it can be used wisely or abused. Used wisely and fed judiciously, hay allows us to have a significantly higher stocking rate than we could with no hay feeding, and, in most cases, be more profitable. Read more >>
Solar Farming Considerations
Alison Davis | May 28th, 2021
Both solar and wind energy have the potential to offset a significant fraction of non-renewable electricity demands, yet it occupies extensive land when deployed at levels large enough to meet global demand. The following summarizes some of the considerations for individual farmers, communities, and local leaders... Read more >>
Proposed Gift and Estate Tax Changes
Laura Powers | May 28th, 2021
You may have been reading in the news lately about proposed changes to various tax laws and their impact on farmers. At this point, however, we would like to provide some background information as to what you may be hearing. Read more >>
U.S. and Global Food Price Inflation
Will Snell | May 28th, 2021
Last year, COVID induced major disruptions in our food supply chain ranging from temporary closures of meat processing plants and restaurants to the panic buying of consumers. As a result U.S. food prices overall jumped 3.5% in 2020 -- its second-highest annual level spike over the past 30 years. While escalating food prices has been headline news of late, USDA is projecting that food prices will increase only between 2 and 3% in 2021, as inflation for most food categories is expected to be at or below their 20-year historical averages. Globally, food price inflation is a much greater concern. Read more >>
National Farm Market Impacts from Covid
Tim Woods and Mahla Zare | April 29th, 2021
A Fall 2020 national survey conducted by the Farmers Market Coalition of farmers market managers starts to provide a glimpse into some of the winners and losers in farmers markets across the country. Farmers markets have been important venues for small vendors and localized food systems, often providing a diversity of kinds of vendors participating. Read more >>
Carbon Markets 101
Jordan Shockley and Will Snell | April 29th, 2021
The development of agricultural ecosystem credit markets, specifically carbon markets, is a hot topic in the popular press and Washington, DC. The United States Environmental Protection Agency (EPA) estimates that 10% of carbon dioxide, a primary greenhouse gas, is emitted by the agricultural sector. While this is relatively a small portion of overall carbon dioxide emissions by the economic sector, agriculture has received a lot of attention in reducing overall GHG emissions recently. Read more >>
Contractor or Employee?
Jennifer Rogers | April 29th, 2021
Extra help is often needed around the farm. It can be easy to get someone to come help out when needed and pay them at the end of the day for the job completed. What gets difficult is knowing the difference between contract labor and an employee. Read more >>
USDA Announces Additional Pandemic Assistance for Farmers
Will Snell and Kenny Burdine | March 30th, 2021
On March 24th, U.S. Ag Secretary Tom Vilsack introduced USDA’s Pandemic Assistance for Producers that will be distributing more than $12 billion to assist agricultural producers and other agricultural businesses impacted by the Coronavirus. Read more >>
Hemp Contract Considerations
Jonathan Shepherd, Paul Goeringer, and Tyler Mark | March 30th, 2021
Engaging in production agriculture is a risky profession, even for mature markets, such as corn and poultry, much less one that lacks the market transparency of hemp. One way producers mitigate risk in mature markets is through the utilization of production and marketing contracts.. Read more >>
Maximizing Value: 2021 Spring Application of Broiler Litter for Grain Crop Production
Jordan Shockley | March 30th, 2021
Spring is here and grain producers across the state are gearing up for planting. One of the many decisions producers have to make before planting is in regard to their nutrient management plan. Broiler litter provides a great opportunity as a complete fertilizer and is being produced and used throughout the state in grain production. Read more >>
Summer Stocker Outlook for 2021
Greg Halich and Kenny Burdine | March 18th, 2021
Spring means stocker operators are looking to place calves on pasture for summer and is the time of year when we typically see our seasonal highs in the calf market. The purpose of this article is to assess the likely profitability of summer stocker programs for 2021 and establish target purchase prices for calves based on a range of return levels. Read more >>
Cow-Calf Profitability Estimates for 2020 and 2021 (Spring Calving Herd)
Greg Halich, Kenny Burdine, and Jonathan Shepherd | February 25th, 2021
The purpose of this article is to examine cow-calf profitability for a spring calving herd that sold weaned calves in the fall of 2020 and provide an estimate of profitability for the upcoming year. Every operation is different, so producers should evaluate and modify these estimates to fit their situation. Read more >>
ARC-PLC Farm Bill Decision 2021
Greg Halich | February 25th, 2021
Starting in 2018, grain farmers have had the ability to decide on a yearly basis between the ARC and PLC Farm Bill programs. In general, the decision for 2021 will not be nearly as important as in most years, as the likelihood for a payout with either program is fairly low with all crop-types. Read more >>
2021 Tobacco Budgets
Will Snell | February 25th, 2021
I have always claimed that tobacco returns will generally generate a much greater variation across growers compared to many other agricultural enterprises given tobacco producer differences in labor source (H2A vs non-H2A), labor requirements, yield expectations, equipment and housing/stripping facilities, GAP fees, and price outcomes. Consequently, growers are encouraged to use our budget templates to develop a baseline that fits their individual farm and then look at our price and yield sensitivity tables to assess a wide variety of outcomes. Read more >>
Paycheck Protection Program Loan Forgiveness
Jerry Pierce | February 25th, 2021
The Economic Aid Act reauthorized the Small Business Administration (SBA) Paycheck Protection Program (PPP) through March 31. On January 19, 2021, SBA issued Interim Final Rules concerning forgiveness and review of first and second draw loans made under PPP. Read more >>
Liquidation of the U.S. Beef Herd Continues, but at a Slower Pace than Expected
Kenny Burdine | February 2nd, 2021
USDA-NASS released their January 1, 2021 cattle inventory estimates on the afternoon of Friday, January 29th. The U.S. beef cow herd was estimated to be down by 0.6%, which was a smaller decrease than most had expected. Read more >>
More Government Money on the Way for Kentucky Farmers
Will Snell | January 28th, 2021
As a result of the stimulus package that became law at the end of 2020, Kentucky farmers are set to receive a third round of CFAP payments in 2021 (CFAP 3.0). Currently, USDA is developing specific rules/details on the new CFAP program with farmer sign-up and payments to follow. Read more >>
Cantaloupe, Watermelon, and Pumpkin Market Trends for Kentucky
Savannah Columbia and Tim Woods | January 28th, 2021
Cantaloupe, watermelons and pumpkins have been important crops for Kentucky, especially moving through the auctions. Good growing conditions led to both strong yields and quality and, with the strong prices, these three products helped see auction sales move roughly 40% higher for the season compared to 2019. Read more >>
Continued Declines in Hemp Profitability Mixed with Marginal Profit Potential for 2021
Jonathan Shepherd and Tyler Mark | January 28th, 2021
For 2021, it is expected that both approved and planted acres for hemp will continue to decline. Many producers and processors are still working through the biomass and/or processed crude oil from 2019 and 2020 growing seasons. Read more >>
ARC vs PLC – The Basics
Will Snell | January 28th, 2021
The 2014 Farm Bill developed two programs to provide income support for specified row crops -- the Agricultural Risk Coverage (ARC) and the Price Loss Coverage (PLC) programs. These risk management programs were reauthorized in the 2018 Farm Bill with slight modifications and remain in effect for the 2019-2023 crop years. Read more >>
Paycheck Protection Program Update
Jerry Pierce | January 20th, 2021
The Economic Aid Act reauthorized the Small Business Administration (SBA) Paycheck Protection Program (PPP) through March 31 and made several modifications beneficial to farmers. It also authorizes second draw PPP loans. Read more >>
Additional CFAP Funding Announced
Will Snell and Kenny Burdine | January 19th, 2021
USDA announced on this past Friday that additional Coronavirus Food Assistance Program (CFAP) payments (labeled CFAP 2.1) will be made for certain producers using leftover funds from the first two rounds of CFAP. Read more >>
2020 Tax Update
Suzy Martin | November 25th, 2020
Despite all the events of 2020, the tax law changes were minimal. One item of discussion is the “Recovery Rebate”, which was the stimulus payment of $1200 ($2400 for couples) that was received in the first half of the year. Read more >>
Estimates of What it is Going to Cost Me to Destroy my "HOT" Hemp Crop
Jonathan Shepherd and Tyler Mark | November 25th, 2020
We recognize that no one plants a crop with expectations of having to destroy the crop. However, the risk of producing a hemp crop that is non-compliant is a real risk and has a genuine cost associated. This article begins to outline the time and cost estimates associated with the various methodologies of crop destruction. Read more >>
Communication in Stressful Times
Steve Isaacs | November 25th, 2020
How we communicate with family, friends, employees, customers, and employers is different in stressful situations. Dr. Vincent Covello of the Center for Risk Communication says that all the communication rules change under stress. The things we say, how we say them, and how they are heard are very different in low-stress situations than they are in high-stress circumstances. Read more >>
The Economic Value of Applying Broiler Litter in the Fall
Jordan Shockley | November 25th, 2020
Spring application of broiler litter is ideal for maximizing the economic value, but faces challenges that include wet soil conditions, lack of time to spread litter near planting, and availability of litter in the spring. Therefore, it is a common practice in Kentucky to apply broiler litter in the fall. While not optimal from an economic, agronomic, or environmental perspective, producers still need to understand the economic value of applying broiler litter in the fall. Read more >>