LONDON, Ohio — It has been a popular question in recent years as farmland rental rates have more than doubled in many places, and it is one Barry Ward, Ohio State University Extension production business management leader, expects to hear later this month at Farm Science Review: “What direction will farmland cash rents take in 2013?”
“I expect cash rent price movement to be mixed,” Ward said. “I expect farmland rental rates to be fairly flat in areas that may have experienced significant drought.
“In areas that enjoyed better moisture, I expect rents to continue to trend higher. Higher crop prices will put upward pressure on rents in general, but severe drought in many areas of Ohio may temper landowners’ expectations for higher rents.”
To help reduce any potential uneasiness between landowners and farmland renters in 2013, Ward recommends a flexible cash lease option. Flexible leases can lower the rental rate if crop production is somehow stunted during the year, or potentially increase the rate if conditions are favorable and crops thrive. This reduces some of the producer risk while offering additional income upside for landowners.
Ward will answer questions about farmland cash rent and other crop input questions during his session titled “Crop Input Costs” on Thursday, Sept. 20 at 11:20 a.m. at the Farm Science Review near London. His program is one of many “Question the Authorities” question-and-answer sessions offered throughout the three-day farm show, which runs Sept. 18-20.
“I plan to discuss the economic issues important to the direction of land values and rents, and also the likely direction of major crop input costs such as seed, fertilizer and chemicals,” he said. “As part of the development of our OSU Extension Enterprise Budgets we work to put together the best forecast possible for crop inputs for the upcoming production season.”
These forecasts are important because they help crop growers plan and make risk management decisions. Ward recommends producers plan input purchases well in advance of the beginning of the 2013 crop season and employ different strategies to manage risk given volatile input prices.
“Generally speaking, input costs will be higher for 2013, but some will experience more significant increases than others,” he said.
These increases, combined with likely lower 2012 profits due to drought conditions, likely make for a riskier 2013 for many producers.
“The level of costs producers have to finance these days is large. With stronger balance sheets due to high income the past five years, many farmers have had to finance a lower percentage of their costs,” Ward said. “This upcoming year may be different for many growers as they may have less net income to buy inputs.
“Many will have to extend their operating lines of credit for 2013. Good records are important as producers work with their lenders in preparation for the coming year.”
Agricultural enthusiasts will find many items of interest on the Question the Authorities schedule, including an expanded array of topics. While in previous years experts from the OSU College of Food, Agricultural, and Environmental Sciences filled out the program, this year faculty members from the OSU College of Veterinary Medicine are taking an expanded role.
As a result, livestock producers will find a lot more items to choose from on this year’s Question the Authorities menu.
Some of the many topics on the agenda include planning for a career in veterinary medicine, the rural/farm veterinary shortage, Ohio Livestock Care Standards Board enforcement activities, protecting the farm from nursing home costs, ag policy, shale energy legal issues for farmers, can your animals make you sick, feral swine and diseases, animal antibiotic use and resistance, farm trespassers and liability concerns, on-farm energy audits, deer farming 101, bioenergy opportunities, drinking raw milk, and food trends and farmers.
The Question the Authorities sessions will take place in the OSU Area in the center of the main Farm Science Review exhibit area.
Farm Science Review is sponsored by Ohio State University's College of Food, Agricultural, and Environmental Sciences, OSU Extension, and the Ohio Agricultural Research and Development Center. Pre-show tickets are $5 at all OSU Extension county offices. Tickets are also available at local agribusinesses. Tickets are $8 at the gate. Children 5 and younger are admitted free. Hours are 8 a.m. to 5 p.m. Sept. 18-19 and 8 a.m. to 4 p.m. Sept. 20.