Ag Connection
Your link to the Universities for ag extension and research information


Volume 12, Number 2
February  2006
 

 

This Month in Ag Connection

 


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Asian Soybean Rust-What Happened?
New Generation Cooperatives
2005 Bermudagrass Yields at Lincoln, MO
Bottom Line Tidbits: Farm Tenant and Landowner Communication
Horizon Point Custom Weather Analysis
Taxation Tidbits

 

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Asian Soybean Rust – What Happened?

Soybean Rust was anticipated as a severe problem in 2005, but the disease never materialized.  Asian soybean rust experts at a recent Soybean Rust conference indicate that a lack of over wintering inoculum, high temperatures and a lack of moisture were all contributing factors.

 

The disease was first reported in the United States in 2004.  In 2005, rust was reported in Florida in February and spread slowly through the southeast, mostly during late summer and early fall.  Most of the detections were reported after August 15.  The rust that was detected consisted of a few lesions or pustules found on a few leaves. 

 

Scientists at the National Soybean Rust Conference said the disease did not over winter along the Gulf Coast in 2004 because of a hard freeze killing any volunteer soybean and kudzu leaves.  In milder winters there will be more host survival and the spore load will increase. 

 

While temperature plays an important role in the infection process, researchers are not certain how temperatures might affect development of the disease in the United States.  Temperatures ranging from 65 to 85 degrees Fahrenheit are ideal for infection. Once the disease resurfaced in 2005, it was too late in the growing season for it to spread.

 

Some experts believe it may have been too hot in 2005 for the disease to develop early in the growing season.  Most infections started in late August when temperatures started to drop.  In China, scientists indicated that it is too hot for soybean rust to develop during the summer.  Without prolonged periods of leaf wetness the disease could not proliferate.  The ideal conditions for soybean rust development occurred in only a few places in 2005.

 

The absence of low level jet-stream winds also played a part in the lack of disease development.  Other than the effects of the summer’s tropical storms, the low-level jet winds were not strong.  Most northerly wind currents did not extend much past the first tier of states north of the coast. 

 

The disease could reappear in 2006 and beyond.  Watch for updates and scout your fields!!

 

(Author:  Wayne Crook, Agronomy Specialist)


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New Generation Cooperatives

New generation cooperatives (NGC) are a popular method used to add value to agricultural commodities. While not a specific legal structure, the term “New Generation Cooperative” is used to describe how a firm operates. It describes the relationship between the firm, its members and how it is financed. NGC start up and construction are financed through the sale of delivery rights. Expenses and growth are financed through members retained earnings. The delivery rights represent a member’s right to deliver a specific amount of commodities to the cooperative. The five primary characteristics of NGC are:

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Defined Membership: Most will refer to a NGC as a closed cooperative. More accurately it should be called “defined”. The number of members in a NGC depends upon the proposed capacity of the cooperative’s operations. A key feature of the NGC is its ability to control supply or access to the cooperatives operations. By limiting membership to those members who purchase the right to supply the cooperative, the NGC is able to ensure a steady supply of the agricultural inputs required for running operations. Generally membership to a NGC is not closed permanently. If the cooperative expands it could seek additional memberships.

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Delivery Rights: Once a member contributes equity, they receive the right as well as the obligation to deliver a specific amount of commodity each year.

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Upfront Equity Required: Members must invest upfront in the cooperative. Most cooperatives must have at least 50% equity raised before a lender will finance the remainder of the project.

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Delivery Rights are Transferable: NGC’s make a provision that the delivery rights can be transferred to another farmer. The value of those rights will vary depending upon the success of the coop.

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Marketing Agreement: Upon purchasing delivery rights, members are required to sign a marketing contract outlining the duties of both the members and the cooperative stating the delivery, quality and quantity of commodity.

A few benefits for producers are:

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Price paid for the commodity. Producers are paid for the commodities delivered to the cooperative.

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Value-added payments. Producers are rewarded for the value added to their commodities. The payment is paid upon patronage basis, which is based upon the number of delivery rights owned.

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Potential appreciation of delivery rights, since membership is limited, and the delivery rights are transferable. If the cooperative is successful, the value of those rights increase.
 

Here are five questions you should ask if you are considering joining a NGC:

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What are the potential returns from the cooperative?

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What risks is the cooperative business exposed to?

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How will cooperative membership influence your farm income?

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How will my lender view the cooperative investment?

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How will cooperative membership impact my personal and business goals?

NGC’s should operate with the following objectives:

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increase farm income and productivity

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reduce marketing risk

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increase market access

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increase member networking and knowledge

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provide new services and

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increase membership share values.

(Author: Mary Sobba, Agricultural Business Specialist)
 


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2005 Bermudagrass Yields at Lincoln, MO

During the spring of 2002 Bermudagrass plots were established at Lincoln, MO. The three seeded varieties are Wrangler, Guymon and Cheyenne. Sprigged varieties are Hardie, Midland 99 and Ozarka. All plots were fertilized with urea on May 13, 2005 at a rate of 100 pounds actual nitrogen per acre, with an additional 50 pounds of nitrogen per acre applied on June 1, 2005 after the first harvest date.

Plots were mowed to a four-inch stubble height on June 1, July 5 and September 12. Samples were collected, weighed and sub-sampled. The sub-samples were air dried to approximately 15 percent moisture. Dry matter yield estimates were then made by multiplying these air-dry weights by 0.85. This adjusts for the moisture in the air since we do not have access to drying ovens to eliminate all moisture from the samples.

Due to the lack on rainfall during July, there was no growth to harvest at the scheduled early August harvest time. August rains resulted in adequate regrowth for a September harvest. Harvest after mid-September is not recommended for Bermudagrass. Also, since no harvest was taken in early August, additional N was not applied.

Yield results for the seeded varieties are listed in Table 1. There were statistically significant differences in dry matter yield between these varieties. Wrangler had the highest yield on the June 1 harvest date. Total estimated dry matter yield for Wrangler was greater than for either Guymon or Cheyenne. Total estimated dry matter yield was not statistically different for Guymon or Cheyenne, even though Guymon outyielded Cheyenne on the June 1 harvest date.

Table 1
2005 
Estimated Dry Matter Yield in Pounds
per Acre of Seeded Bermudagrass Varieties

Variety

6-1-05

7-5-05

9-12-05

Total

Wrangler

2392a

3034

1735

7162a

Guymon

1784b

2538

1659

5981b

Cheyenne

1338c

2206

1901

5446b

P>F

0.003

0.09

0.32 0.01

a,b,c = Means within column with differing superscripts are different.

LSD = Least Significant Difference 

Sprigged variety yields are listed in Table 2.  No statistically significant dry matter yield differences were noted among these varieties. 

Table 2
2005
Estimated Dry Matter Yield in Pounds
per Acre of Sprigged Bermudagrass Varieties

Variety

6-1-05

7-5-05

9-12-05

Total

Hardie

1949

3152

2224

7326

Midland 99

1620

2955

2477

7052

Ozarka

2049

3114

2240

7404

P>F

0.67

0.85

0.73

0.94

The plots will continue to be monitored in 2006.  Additional plots are being established to compare yield and forage quality with the addition of various legumes to tall fescue. 

Special thanks to MFA Plant Foods at Cole Camp for supplying the urea for these demonstrations and to the Benton County SWCD for allowing the plots on their property in Lincoln.    

(Authors:  Gene Schmitz, Livestock Specialist and Rich Hoormann, Agronomy Specialist)
 


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Bottom Line Tidbits: Farm Tenant and Landowner Communication

Heads-up farmers: the number one complaint consistently shared by farm rental landowners is “my tenant takes me for granted and doesn’t communicate with me”. Improving your communication with your landowners or potential landlords can give you a competitive advantage.

If you rent land, addressing and curing this complaint of landowners should be one of your highest business management priorities for 2006. An important economic reality is that it would be easier and cheaper for the landowner to come up with a new tenant – than it would be for the tenant to come up with replacement land. The ironic point is that addressing and curing this lack of communication complaint should not be difficult or complicated.

If you don’t feel comfortable visiting in person or telephoning each of your landowners on a regular basis – consider developing a seasonal or quarterly newsletter. This letter should inform the landowner about:

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happenings since your last communication

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crop progress and condition

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weather update

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new equipment and technology

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upcoming activities and events.

Don’t be afraid to share information about your personal or family activities. Remember, a goal of the communication is to develop a feeling of inclusion – that you are not taking the landowner for granted.

On the subject of activities or events – have you considered having a field day for your landowners? This could be an excellent way of expressing your appreciation for the opportunity of farming their land and impressing upon them the significant investment you have made in machinery and new technology. This would also be an excellent opportunity to invite some of your farm service and input representatives to your farm. In fact, they could help communicate to the landowners the need for their company’s services or products. An additional benefit is that a field day would give you the opportunity and motivation to cleanup or cleanout the shop and machine shed.

Use your imagination for ways of enhancing your communication with your landowners and approach the task with a positive and creative attitude.

The ball is in your hands – don’t drop it!

(Author: Parman R. Green, University of Missouri Ag Business Mgmt. Specialist)


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Horizon Point Custom Weather Analysis

Horizon Point is a custom weather analysis system for farmers. It provides farmers with the opportunity to have site specific weather reports sent to their e-mail address. For more information on this system, see the following web site: http://agebb.missouri.edu/horizonpoint/

This service is free. Give it a try.

(Author: Don Day, Natural Resource Engineer)
 


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Taxation Tidbits

  2005 2006
Standard Deduction:
  • Single
  • Married filing jointly
  • Head of household

$5,000
$10,000 
$7,300

$5,150
$10,300
$7,550
Personal Exemption $3,200 $3,300
Maximum Section 179 Deduction $105,000 $108,000
Maximum Social Security Wage Base $90,000 $94,200
Full Retirement Age for Social Security  65 years 6 mos. 65 years 8 mos.
Annual Gift Exclusion $11,000 $12,000
Federal Estate Tax Equivalent Exemption $1.5 mil. $2.0 mil.

(Author: Parman R. Green, MU Extension Ag Business Mgmt. Specialist)


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University of Missouri ExtensionAg Connection - Ag Connection Newsletter,  February 2006
http://outreach.missouri.edu/agconnection/newsletters/is-06-02.htm -- Revised: February 10, 2006
daydr@missouri.edu