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By Dennis L. Brothers, Joshua M. Duke, Adam Rabinowitz, and Jose Garcia Gamez
Using original data and a U.S. Department of Energy modeling program, we analyze how system size, photovoltaic power generation, and utility compensation affect solar system profitability on a representative southeastern U.S. commercial poultry farm. Results show that due to the poultry usage profile, when electricity buyback rates are low, system size and utility compensation are more important than solar availability in determining the profitability of a solar system for a commercial poultry grower. Also because of the usage profile, smaller systems may be more profitable regardless of solar availability. We also discuss the extent to which tax incentives and cost-share improve profitability.
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By Eilish R. Hanson, Amy Nagler, John Ritten, and Benjamin Rashford
Modeling farm-level economic implications from regional dedicated bioenergy production in the Upper Missouri River Basin, we estimate break-even prices for switchgrass yielding 2.7 tons per acre following 2016 crop budgets, at between $116 and $99 per ton across four agricultural sub-regions. Given that these prices fall short of predicted biomass feedstock prices, either the variable costs of production of switchgrass would need to decrease, or substantial subsidy policies would need to be in place to make switchgrass competitive within current crop mixes. Broad energy sector economic and policy shifts are likely necessary for dedicated bioenergy crops to become competitive.
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By Andrew J. Keller, Michael A. Boland, and Scott A. Petty
This paper traces the historical roots of farmland ownership, showing how English, and ultimately American, property law has developed through centuries of exchanges among English monarchs, their subjects, and the courts. It was these interplays that gave us concepts such as inheritance taxes, trusts, and limits to corporate ownership. Beginning in England’s feudal period, farmland was held largely by a wealthy few with incentives to keep the land in the family to preserve their dynasties. A few key court decisions were able to chip away at the dynastyfriendly protections, particularly the Duke of Norfolk’s Case in 1682. The result was the Rule Against Perpetuities (RAP), which limited the time an owner could control land after death. Adopting much, but not all, of these English traditions, U.S. property laws have taken steps toward reviving the possibility of an enduring dynasty as evidenced by the generation-skipping trust (GST) and the repeal of the RAP by several U.S. states. From these policies, the dynasty trust was born: a tool whose impact has yet to be fully understood and may merit further study.
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By Andrew J. Keller, Michael A. Boland, and Scott A. Petty
Evidence suggests that a shift in the structure of U.S. farmland ownership is occurring. Current U.S. Department of Agriculture data collection methods are unable to perfectly capture the drivers of this shift but nonetheless demonstrate that something significant is indeed happening. Without knowing the true extent of this recent phenomenon, nor exactly what is causing it, this paper first attempts to identify some of its possible drivers. In light of this evolving agricultural landscape, this paper offers an additional discussion of other trends in the proliferation of less traditional methods of farm and ranchland ownership that could impact U.S. agriculture going forward. Further dialogue seems advisable as to possible adjustments in USDA survey methods so that nuances of these issues can be better identified and understood.
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By Michael Boehlje and Michael Langemeier
Precision agriculture or site-specific crop management attempts to observe, measure, and respond to inter- and intra-field variability. The goal of precision agriculture is to enhance yields, reduce cost, and/or mitigate environmental risks. This article discusses potential payoffs of precision agriculture from the producer, value chain, and environmental perspectives. Benefits of precision agriculture are discussed in the context of technology adoption and competitive advantage. Potential benefits associated with precision agriculture are manifold. In addition to potentially reducing cost and enhancing product value, precision agriculture has the potential to improve efficiency of machinery use, reduce risk, enhance property value, improve our ability to monitor food safety and enhance traceability, enhance our capability to execute and monitor sustainable practices, reduce fertilizer and chemical leaching and runoff, and conserve irrigation water. The adoption of precision agricultural technologies will likely require a reexamination of a farm’s workforce skills.
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By Michael Langemeier and Elizabeth Yeager
This study examined factors impacting variability and downside risk for a sample of Kansas farms using data from 2007 to 2019. Liquidity, solvency, and the percentage of labor devoted to crop production were significantly related to the standard deviation of return on equity. Downside risk was measured as the number of years during the study period in which return on equity was negative. Value of farm production, financial efficiency, liquidity, percentage of acres owned, and the percentage of labor devoted to crop production were significantly related to downside risk. The risk measures were weakly correlated with each other; thus, when developing strategies to mitigate risk it is extremely important to determine whether a farm is more concerned about variability or downside risk.
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By Carl Zulauf, Michael Langemeier, and Gary Schnitkey
This paper examines the impact of crop safety net payments, including decoupled payments, on the aggregate net return to nine U.S. crops (barley, corn, cotton, oats, peanuts, rice, sorghum, soybeans, and wheat). Net return was calculated using economic cost and thus includes an opportunity cost for unpaid labor and owned land. Crop safety net payments since 1975 have turned an average minus 7% annual net return loss into a 4% profit. Largest loss was minus 9% with safety net payments versus minus 36% without safety net payments. Largest loss with safety net payments was similar across farm bills since 1980.