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January 1, 1998
Hedging & Options
represents a standardized
quantity linked to a futures contract, and …
March 20, 2015
Commodity Program Papers
your farm’s cc yield. The link to download the model is …
Employee and Employer Forms
the Apply for an EIN Online link. You
may also apply for …
March 1, 2012
Fed Cattle Pricing
Feuz). Formula prices
linked to the boxed beef cutout …
January 18, 2012
Leasing Papers
and Presentations
Projected Pasture Rental Rates for 2012
Kevin C. Dhuyvetter
Department of Agricultural Economics, Kansas State University
January 2012
It’s that time of year when livestock producers and landowners look to warming
weather and grass turning green and thus the need to negotiate pasture rental rates for the
upcoming grazing season. Often the starting point in negotiations is what was charged last year
and then a determination is made as to whether or not that value should be changed for the
current year. A valuable source of information historically available to look at the previous year
was the average rental rates reported in the annual Bluestem Pasture Release published by the
Kansas Department of Agriculture Statistics Division (Kansas Ag Statistics) (historical reports are
available at
www.nass.usda.gov/Statistics_by_State/Kansas/Publications/Economics_and_Misc/Bluestem/).
This survey collected data on rental rates in the Flint Hills of Kansas for various types of cattle
and stocking programs (i.e., different weights of stocker cattle for both season long and early
intensive and spring‐ and fall‐calving cow herds). Unfortunately, due to budget constraints this
survey was discontinued after 2009 and thus producers and landowners who have relied upon
that information in the past need to find an alternative source of information.
One alternative source of information is the USDA NASS survey of cash rental rates at
the county level. This information for Kansas is summarized in 2011 Kansas County‐Level Land
Values and Cash Rents available at www.agmanager.info/farmmgt/land/lease/. The
disadvantage of this information is that rental rates are reported only as dollars per acre
without any supporting information pertaining to stocking rates. Without knowing anything
about stocking rate, information on pasture rental rates per acre has limited value when setting
rates for specific tracts of land.
Many factors impact the rental rate for any particular tract of land (e.g., forage quality,
stocking rate, size of pasture, quality of fence, water availability, landowner/tenant
relationship), however, an examination of historical data indicates there are three factors that
explain much of the variability in average rental rates over time. First, rates trend up over time
and thus are expected to increase from year‐to‐year, all else equal. Second, rates are positively
related to cattle prices, i.e., rental rates tend to increase more when cattle prices are high
compared to when cattle prices are low. Third, rental rates are positively related to corn prices
suggesting that producers are willing to pay more to rent grass when feed prices are high.
These relationships have been quantified and embedded in a decision tool that allows
producers and landowners to predict average rental rates given assumptions about these three
factors (i.e., year, feeder cattle price, and corn price) (see Determining Pasture Rents in the
Kansas Flint Hills and corresponding decision tool available on www.AgManager.info (direct link
www.agmanager.info/farmmgt/land/lease/). …
Price Risk Publications
represents a standardized
quantity linked to a futures contract, and …
Breakout Sessions
Press releases, radio interviews, & links
–Crops: Marketing
• …
August 1, 2017
Breakout Sessions
Kansas economy are directly linked.
Water is a finite resource …
September 14, 2017
Crop Insurance Papers
1
Margin Protection: Crop Insurance Premiums and Credits
Monte Vandeveer (montev@ksu.edu)
Kansas State University Department of Agricultural Economics ‐ September 2017
A recent article here on AgManager.info discussed the basic operations of Margin Protection, a new
form of crop insurance coverage coming to Kansas for the 2018 corn and soybean crops. This article
takes a brief look at expected premium costs for Margin Protection, including the credits allowed for
also purchasing a traditional Revenue Protection (RP) or Yield Protection (YP) policy.
To review, Margin Protection, or MP, protects against an unexpected decline in “margin,” defined here
as crop revenue minus operating costs. So MP not only protects against a decline in crop price or yield
(as does the traditional RP coverage), but it also protects producers from an unexpected increase in
certain operating costs.
MP coverage does not use individual farm yields or producers’ own records of input costs. Instead, it is
an area‐based plan which uses county‐level estimates of yields and inputs used to calculate crop
revenue, operating costs, and the resulting margin. While it intends to reflect the general experience
of most producers in a county, it may not exactly match the results of any particular individual.
Producers should remember that they could experience a loss on their own farm and yet receive no
indemnity from MPR coverage.
MP coverage for 2018 corn and soybeans in Kansas actually begins in the fall of 2017. The Projected
Price discovery period for both crops and inputs runs from August 15 to September 14. The final or
Harvest Price discovery for the inputs diesel, urea, and diammonium phosphate then occurs in April
2018, and Harvest Prices for the crops and interest costs are determined over October 2018.
The Risk Management Agency has provided a wide range of resources on its website to explain MP
coverage. Links to fact sheets, policy documents, and other supporting information are available at
https://www.rma.usda.gov/policies/mp/.
In addition, growers can find more information at www.MarginProtection.com, including premium
quotes. Here, they can enter their location (county), insured crop, and other details to obtain the
latest premium estimates. After the end of the Projected Price discovery period on September 14, the
website quotes will be actual premium amounts, not just estimates.
Margin Protection can be combined with the traditional RP or YP coverage used by most corn and
soybean growers in Kansas. The RP or YP policy bought next spring is referred to as the “base policy” in
this arrangement. Purchase of a base policy will result in a premium credit for MP coverage, to reflect
the situation that an indemnity from the base policy will offset a portion of the indemnity from the MP
policy. The amount of premium credit is based on the expected reduction in MP indemnities that
instead will be paid under the base policy, which will be determined when all information needed to
Kansas State University Department Of Agricultural Economics Extension Publication …