March Clinic Dates

Farmers and ranchers are invited to attend a FREE clinic.  The clinics are one-on-one, not group sessions, and are confidential.  The Farm Finance clinic gives you a chance to meet with an experienced Ag law attorney and Ag financial counselor.  These clinic staff specialize in legal and financial issues related to farming and ranching, including financial planning, estate and transition planning, farm loan programs, debtor/creditor law, water rights, and other relevant matters.  Here is an opportunity to obtain an experienced outside opinion on issues that may be affecting your farm or ranch.  Bring your questions!

These FREE farm and ranch clinics are being held in:

March Clinics:

Norfolk clinic – Friday, March 3rd

Norfolk clinic – Thursday, March 16th

Fairbury clinic – Monday, March 27th

To sign up for a clinic or for more information, call Michelle at the Nebraska Farm Hotline:  1-800-464-0258.

The Nebraska Department of Agriculture and Legal Aid of Nebraska sponsor the farm finance clinics.

Farm mediation                  Legal Aid of Nebraska

September Clinic Dates

Free clinics are available through the Farm Mediation program and Legal Aid of Nebraska.   In these clinics, participants can get one-on-one advice from financial and legal professionals about farm transition and financial issues.  The dates for September 2016 are:

Grand Island – Thursday, Sept. 1st

Fairbury – Friday, Sept. 9th

North Platte – Thursday, Sept. 8th

Norfolk – Friday, Sept. 16th

Lexington – Thursday, Sept. 15th

Norfolk – Tuesday, Sept. 27th

Please call the Rural Response Hotline 1-800-464-0258.

Will You Be Affected By FSMA?

The FDA is inching closer to implementing the Food Safety Modernization Act (FSMA).  On September 10, 2015, the FDA released the final Preventative Controls Rule for food processing facilities.

FMSA is on the minds of many producers and processors, with one of the primary questions being ‘Am I Affected?”  The National Sustainable Agriculture Coalition has put together a page attempting to answer that very question.  Obviously, the information there is for informational purposes only and is subject to change as the rules become final and implemented but nonetheless, is a great starting point.  NSAC also has a flow chart to help determine if your farm or business may be subject to the Produce Rule and/or Preventive Controls Rule.

As the FMSA rules begin finalization and implementation, we’re happy to answers any questions you may have as to the impact of the rules on your operation.

Nebraska Agri-Tourism Limitation of Liability

Nebraska recently passed LB329, providing a bevy of benefits for those individuals involved with agri-tourism.  The bill exempts property owners from lawsuits for injury or death caused by an “inherent risk” on the property.  An inherent risk includes conditions, dangers, or hazards that are an integral part of the land or waters used for agri-tourism, the behavior of wild or domestic animals, the ordinary dangers of structures or equipment on the site, or the negligence of a paying participant.

The exemption does not apply if the property owner is negligent.  Additionally, the property must display signs with the exemption.

Covered activities at working farms and ranches include hunting, fishing, swimming, boating, canoeing, kayaking, tubing, water sports, camping, picnicking, hiking, backpacking, bicycling, horseback riding, nature study, birding, farm ranch and vineyard tours and activities, harvest-your-own activities, water skiing, snow-shoeing, cross-country skiing, visiting and viewing historical, ecological, archaeological, scenic, or scientific sites, and similar activities.

LB329 is an interesting step towards limitation of liability for those interested in starting or expanding their agri-tourism operation.  If you have any questions, you are welcome to contact us — we’re happy to help!

 

Livestock Disaster Assistance Deadline Approaching

If you are a livestock producer who wants to request assistance for losses suffered from October 1, 2011 through December 31, 2014, the deadline to apply for assistance is fast approaching.  The deadline to apply is January 30, 2015.

Assistance is available via two programs: the Livestock Indemnity Program and the Livestock Forage Disaster Program.

The Livestock Indemnity Program provides financial assistance to eligible producers for livestock deaths due to adverse weather, extreme temperatures, disease, wildfires, or attacks by animals re-introduced into the wild by the federal government or protected by federal law, including wolves and avian predators.

The Livestock Forage Disaster Program provides financial compensation to livestock producers that suffered grazing loss due to drought or fire.  Qualifying droughts are based upon the U.S. Drought Monitor severity ratings and qualifying fires are those on rangeland managed by a federal agency and normally permitted for grazing.

Contact your local FSA office for more information on whether you potentially qualify, the types of records required to document losses, and any other questions you may have.

NAP Insurance Program Changes

The Farm Service Administration (FSA) recently announced changes to the Noninsured Crop Disaster Assistance Program (NAP).  But before discussing those changes, lets first discuss what NAP is.

Simply, NAP provides an insurance option for farmers who grow crops that are not eligible for crop insurance.  In fact, if a farmer can obtain crop insurance, including the Risk Management Agency’s multi-peril crop insurance (MPCI), NAP is unavailable.  NAP only covers those crops that are non-insurable and is intended to help farmers farm another year in the event of a catastrophic event.

So what are the changes?

Coverage Levels:

Previously, NAP would cover only 50% of a crop and then pay out up to 55% of the crop’s value.  Now, NAP includes a buy-up provision to cover up to 65% of a crop and pay out up to 100% of the crop’s value.

The 50% coverage cost remains at $250.  Any coverage beyond 50% requires the farmer to pay an additional formula-based premium, or 5.25 times the level of coverage.  The premium is capped at $6,562.00 and it applies towards an individual or entity’s $125,000 NAP payment limitation.

Beginning, Socially Disadvantaged, and Limited Resource Farmers:

First, the $250 service fee is waived for beginning and socially disadvantaged farmers.  This is an expansion of the fee waiver; previously, it applied only to limited resource farmers.  If a beginning farmer has paid the service fee for the 2015 crop year, a refund will be issued.

Additionally, beginning, socially disadvantaged, and limited resource farmers are now eligible for a 50% premium reduction when purchasing buy-up coverage.

Organic and direct market prices:

The state FSA office can provide farmers with the option of insuring crops at the organic market price, rather than conventional or direct-to-consumer price.  However, sufficient data must be available for FSA to establish those separate price points.

Other issues of potential interest:

The NAP changes include a sodsaver provision that is relevant to Nebraska farmers.  If NAP coverage is sought for newly broken cropland, the farmer must pay 200% of the normal premium, not to exceed $6,562.00.

Crop Insurance for Tilling Native Sod

For those readers in Nebraska, Iowa, Minnesota, Montana, North Dakota, and South Dakota, there is a change in crop insurance if you wish to till native sod and plant an annual crop.

The Risk Management Agency, pursuant to the 2014 Farm Bill, is limiting crop insurance benefits to producers who till native sod and plant an annual crop for the first four years of production.  Native sod is defined as acreage that has never been tilled or land which the producer cannot substantiate has ever been tilled for crop production.  The reduction in crop insurance benefits is for all counties in the states listed above and for production on five acres or more per crop insurance policy.

The above policy goes into effect in Fall 2014.  If you have plans to till native sod, now is a good time to touch base with your crop insurance agent and discuss this and other risk management strategies.

Cover Crops and Crop Insurance — What do you need to know?

It is no secret that, year after year, more farmers are considering the possible benefits of cover crops for their cash crops.  But the question for many farmers is whether they can terminate the cover crops without sacrificing crop insurance coverage.

To help answer that question, USDA personnel who helped craft the new cover crop termination policy will be speaking at a webinar on January 23, 2014 from 2:00 to 3:30 p.m. E.S.T..  The webinar, hosted by the National Center for Appropriate Technology and the National Sustainable Agriculture Coalition, looks to be a valuable resource for farmers trying to determine the best path forward for their operation.

However, if attending the webinar is not your cup of tea, the cover crop termination policy is also available.  What are the highlights?

  • The linked policy is applicable only to non-irrigated land.  If the land is irrigated, the cover crop must be terminated prior to the cash/insured crop emerging.
  • The policy uses zones to determine when cover crops may be terminated.  Roughly speaking, western Nebraska is in zone 2 and eastern Nebraska in zone 3.  Most of South Dakota is in zone 2, with the exception of a small sliver of eastern South Dakota in zone 3.
  • For zone 2, late spring to fall seeded crops require cover crop termination 15 days or earlier prior to planting the cash crop.  Early spring seeded crops require termination of the cover crop as soon as practicable prior to planting the cash crop.
  • For zone 3, the cover crop must be terminated at or before planting the cash crop.
  • An early spring seeded crop are crops planted as early as possible after the spring thaw.  Examples would be spring wheat, spring barely, sugar beets, and corn.  Later spring planted crops are crops such as soybeans and dry beans.

The policy statement covers frequently asked questions, as well as some technical details.  You are also welcome to contact your resources at the USDA if you have questions about the new policy.  You are also welcome to contact us if you have any questions.

Pasture, Rangeland and Forage Insurance — A Pilot Project for Nebraska

Cornhusker Economics has a wonderful overview of the new Pasture, Rangeland and Forage Insurance pilot program in Nebraska.  In summary:

  • If you are a Nebraska producer who uses grazing and hay production in your operation, the USDA’s Risk Management Agency is introducing a new insurance product, the Pasture, Rangeland and Forage (“PRF”) coverage.
  • In the 2013 crop year, PRF coverage changes from a vegetative index to a rainfall index.  This means that, instead of PRF coverage based upon satellite imagery to determine the “greenness” of a pasture, PRF will now be based upon the rainfall received in insured area.
  • Insurance (or, in legalese, indemnity) is paid when the rainfall in the insured area is below the guaranteed level, which is determined as a percent of average rainfall.  This means that coverage is determined based upon the rainfall in the insured area, and not upon the production of the operator.
  • An insured area is based upon a grid.  Per Cornhusker Economics, the grid in Nebraska is approximately 13 miles east-to-west and 17 miles north-to-south.  Thus, the rainfall index is calculated for the grid rather than an individual farm or ranch.

But how does it work?  That requires a few steps.

  • First, each grid area has a base dollar value of production determined by RMA for grazing or haying.
  • Next, the producer selects a productivity factor.  The productivity factor adjusts the base dollar value up or down, from 60 percent to 150 percent of the base dollar value.
  • Third, the producer will also select a guarantee level.  The guarantee level is the percentage of average rainfall at which insurance payments are triggered.  The guarantee level can range from 70 percent to 90 percent, ranging in five percent increments (i.e. 70, 75, 80, 85, and 90 percent).  Thus, if a producer selects an 85 percent guarantee level but the grid receives only 82 percent of average rainfall, the insurance is triggered.
  • With the base dollar value, productivity factor, and guarantee level, it is possible to calculate the maximum payout.  Liability is calculated per acre and is calculated as the productivity factor multiplied by the guarantee level.  In other words, if there is a base dollar value of $30 per acre and a productivity factor of 120 percent, the productivity value is $36 per acre.  (30 x 1.2 = 36).  Then you multiply the productivity value by the guarantee level.  Assuming a guarantee level of 80 percent, the total payout would be $28.80 per acre.  (36 x .8 = 28.8)

But wait, there is more!

  • The producer not only chooses the productivity factor and guarantee rate, but the producer must also select time period of coverage called index intervals.  An index interval is two months long.  If PFR insurance is selected, a producer must select two index intervals during the calendar year.
  • Once the intervals are selected, the total payout must be allocated across the intervals.  How does this work?  Well, our producer above has $28.80 of total payout available.  Thus, our producer must allocate part of the $28.80 to separate index intervals.  For example, our producer can allocate 60 percent (or $17.28) to one index interval and 40 percent (or $11.52) to a different index interval.  Keep in mind that if an index interval is selected, at least ten percent of the total payout must be assigned to the index interval and the maximum allocation for any index interval is 60 percent of the total payout.
  • Premiums are subsidized and the amount of the subsidy depends upon the guarantee level.  For a 90 percent guarantee level, 51 percent of the subsidy is paid.  An 80 and 85 percent guarantee level has 55 percent of the subsidy paid.  For 70 and 75 percent guarantee level, 59 percent of the premiums is subsidized.

Keep in mind that any indemnity paid is based upon the grid system and the index interval selected.  That means it may not rain adequately on your acres but the grid may have enough rain that coverage is not triggered.  Also keep in mind that two index intervals must be selected.  Cornhusker Economics suggests selecting the two index intervals in which precipitation has the greatest impact upon production.

If you are curious as to your grid, click here.  Also feel free to contact your crop insurance representative or, if you have any other questions, you are welcome to contact Legal Aid of Nebraska!