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Senior Editor and Writer
Calendar and Template Manager
Markets and Production
Editor and Contributor
Oklahoma's Latest Farm and Ranch News
Your Update from Ron Hays of RON
Thursday, February 11, 2016
Ferrell Says Great Estate and Succession Planning Must Be More Than Just
a Few Legal Documents
the farm or ranch to the next generation requires more than just a
solid estate plan. Speaking at the Oklahoma Cattlemen's Foundation
Succession and Estate Planning seminar Wednesday, Oklahoma State University
Department of Agricultural Economics Ag Law Professor Shannon Ferrell
said the process is about more than paperwork and numbers. While
landowners need to have their details outlined in an estate plan, he
said stakeholders also need to have those crucial conversations and
outline how the transfer of management will take place over
In speaking nationally on estate planning issues, Ferrell hears
several key concerns. He said producers want to make sure their
family can keep the farm operation together for the next generation
and that they can keep their family engaged. Landowners also have
concerns on how to move forward with an estate plan, will or trust.
In looking at research, he said the most successful businesses have a
plan in place that will make sure the assets, business and values are
transferred to that next generation, along with making sure the next
generation is prepared, willing and able to take their role in the
Estate plans should be updated regularly. Ferrell said once you have
a transition plan in place, this plan needs to be reviewed and
updated. He recommends landowners review the document every time
there is a significant event. This includes anytime the stakeholders
change through birth, death, marriage or divorce. This also includes
anytime land or a new enterprise is added. Ferrell recommends
reviewing the estate plan every two to three years to make sure none
of the tax issues or laws have changed.
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Groups Find President's Budget Cuts Hurt Producers as Farm Income
Bureau Federation (AFBF) and American Soybean Association
(ASA) took a hard look at the budget proposal for fiscal year 2017
issued from President
Barack Obama. The association expressed strong
opposition to a proposed $18 billion cut to crop insurance and a lack
of funding for infrastructure improvements.
"A global glut of food production has sent U.S. farm revenues
down sharply," said AFBF President Zippy Duvall.
"With farm income down 56 percent in the past two years alone,
America's farmers and ranchers face difficult times. Yet, the
president's just-released budget would cut 27 USDA programs,
including a 10-year, $18 billion cut to the federal crop insurance
programs so important to farmers. And all this happens as farm income
is projected to decline another 3 percent in 2016." Click
or tap here to read more from AFBF.
"We once again find ourselves fighting attempts
to cut crop insurance," said Richard Wilkins, ASA President
and a farmer from Greenwood, Del. "Our policy has always been
that we will strongly and absolutely oppose any attempt to target
farm bill programs for additional cuts, and it goes without saying
that we will continue to fight proposed cuts to the farm safety net.
All it takes is a quick glance around the farm economy to see that we
need a stronger safety net for our farmers, not a weaker one."
or tap here to read more from ASA.
CME Group to Shorten
Trading Hours for Cattle and Lean Hog Futures as of February 29
the world's leading and most diverse derivatives marketplace, today
announced it will take a number of steps designed to further enhance
its livestock markets.
Reduction of CME livestock trading hours: based on customer requests,
CME livestock futures and options trading hours will be reduced to
align with the period of greatest liquidity in these markets. During
2015, roughly 87 percent of daily livestock futures and options
trades occurred during the proposed hours.
February 29, and pending CFTC approval, the proposed
trading hours for Live Cattle, Feeder Cattle and Lean Hog futures and
options will be as follows:
CME Globex futures and options - 8:30 a.m. to 1:05 p.m. CT Monday to
Open outcry options - 8:30 a.m. to 1:02 p.m. CT Monday to Friday
The daily settlement period and procedures for CME livestock
contracts will remain unchanged. Click
or tap here to read more.
Jayson Lusk Weighs in on
Crop Insurance- Saying Removal of Premium Subsidies Would Benefit
California Farmers and Hurt Kansas Producers
Dr. Jayson Lusk,
Ag Economist for Oklahoma
State University, has written on his blog about an
abstract on Crop Insurance that has been published in the Journal
Applied Economics Perspectives and Policy where he takes a look at
who wins and who loses with Crop Insurance subsidies provided to some
producers in US Agriculture.
According to Dr. Lusk, "Farmers of the major commodity crops
(and increasingly even minor crops including fruits and vegetables)
are eligible to buy subsidized crop insurance. The insurance is, in
principle, priced at actuarial fair rate (i.e., the price of the
insurance is equal to the expected loss), but the government
subsidizes the insurance premium paid by the farmer (in addition to
some of the costs of the insurers). The average subsidy is around 65%
of the premium amount. If there were a similar program for your car
insurance, and the annual premium you pay for your car is $1000/year,
you'd get back $650 in subsidy. In addition to this premium subsidy,
the latest farm bill also has provisions to subsidize the deducible
in the case of a loss. All this begs the question: what impact do
these subsidies have on food prices and production? "
From the abstract:
"Results indicate that the removal of the premium subsidy for
crop insurance would have resulted in aggregate net economic benefits
of $622, $932, and $522 million in 2012, 2013, and 2014,
respectively. The deadweight loss amounts to about 9.6%, 14.4%, and
8.0% of the total crop insurance subsides paid to agricultural
producers in 2012, 2013, and 2014, respectively. In aggregate,
removal of the premium subsidy for crop insurance reduces farm
producer surplus and consumer surplus, with taxpayers being the only
aggregate beneficiary. The findings reveal that the costs of such
farm policies are often hidden from food consumers in the form of a
higher tax burden. On a disaggregate level, there is significant
variation in effects of removal of the premium subsidy for crop
insurance across states. Agricultural producers in several Western
states, such as California, Oregon, and Washington, are projected to
benefit from the removal of the premium subsides for crop insurance,
whereas producers in the Plains States, such as North Dakota, South
Dakota, and Kansas, are projected to be the biggest losers."
There's more to read from Dr. Lusk on his blog- which is
We are pleased to
Farmers & Ranchers Mutual Insurance Company as
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levels, full-time staff members serve as a "watchdog" for
family agriculture producers, mutual insurance company members and
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Click here to go to
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And remember- the 2016 Annual Convention of AFR-OFU will be held in
Norman February 19 and 20. Click
here for details about their 111th Annual meeting.
Gaining Access to China
Could Be a Big Boost for U.S. Beef Exports in 2016
The Chinese are buying a lot of beef internationally
now, but they aren't buying it from the United States. The preferred
supplier looks to be Australia. U.S. Meat Export Federation
and CEO Phil Seng said the U.S. continues to struggle
getting market access since the market was closed after a cow was
discovered with Bovine Spongiform Encephalopathy (BSE) in the U.S. in
2003, which led China to ban U.S. beef. One of the key demands from
China looks to be the traceability of U.S. beef. Seng said
traceability was one of the original 22 demands from the Chinese
government. Nearly all the demands have gone away, except
Under the World
Organization for Animal Health (OIE), the US is
considered a negligible risk. This means the U.S. has a credible
traceability system that is recognized by OIE. Seng said the U.S. is
working to get China more assurances on the voluntary traceability
system and he is hopeful the Chinese will come to the U.S. with their
audit team to look at packing plants and the record keeping process.
"So, I think we have a great story to tell and hopefully the
sooner we get them here and get this thing going the better, because
if you want to really make a big boost in 2016 get into that Chinese
market open," Seng said. "It's been the fastest growing
beef market over the last decade."
I featured Seng on the Beef Buzz feature. Click
or tap here to listen to today's Beef Buzz.
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Legislation Requires Animal-Rights
Contributions Raised in Oklahoma, Be Spent in State-
But Not for "Political" Purposes
A proposed law that would prohibit animal-rights
organizations from raising funds in this state to spend in another
state or on political campaigns was endorsed unanimously Wednesday by
a legislative panel.
House Bill 2250 by state Rep.
Brian Renegar would forbid any animal-rights
charitable organization, professional fund-raiser or professional
solicitor engaged by such an organization, from soliciting
contributions in Oklahoma for use on "program services or
functional expenses outside of this state, or for political purposes
inside or outside this state."
Renegar, D-McAlester, and Rep.
Scott Biggs, R-Chickasha, both indicated HB 2250 was
triggered by the actions of the Humane Society of the United States
after the Moore tornado of 2013. The HSUS raised "about a million
dollars" from Oklahomans who were concerned about pets and
livestock injured or orphaned by the twister, but the agency spent
"only about $100,000" of those contributions in Oklahoma
and diverted the balance elsewhere, Biggs told the House Committee on
Agriculture and Rural Development.
Renegar also said he included the ban on using animal-rights
contributions for "political purposes" because of State
Question 777, the "right to farm" issue that will appear on
the general election ballot in November. Click
or tap here to read more.
Today's Acronyms- TPP,
AMR and CFTC (and EPA for the Bonus Round)
Our world is full of Acronyms- and in the world of
farming and ranching, we have more than our share. This
morning- I wanted to update you on three acronyms in the news-
House Speaker Paul Ryan said this week his chamber does not have the
votes yet to pass the Trans-Pacific Partnership. The Wisconsin
Republican also said lawmakers have a long list of issues regarding
the TPP, which was signed last week in New Zealand. Currently, the
trade agreement faces opposition from a majority of Democrats on
Capitol Hill and presidential candidates in both parties. Some are
pressing the White House to make changes to the deal to ensure
However, congressional leaders still don't expect a vote until after
the November Elections. Congress can only pass or fail the agreement
under the terms set by Trade Promotion Authority which was passed by
Congress last year. Senate Majority Leader Mitch McConnell and
Finance Committee Chairman Orrin Hatch both have said they want to
get the deal done, but not without addressing their concerns. Ryan
and McConnell met with the president at the White House last week to
discuss trade and other issues facing Congress in the final year of
This stands for Antimicrobial resistance, which is an emerging public
health threat requiring a globally coordinated effort to counter the
risks it poses to food security, according to FAO Deputy
Overuse and misuse of antibiotics and other antimicrobial agents
foster increasing resistance among the very microbes that cause the
infections and disease they were designed to quell, threatening to
reverse a century of progress in human and animal health, she said.
"We have to help save live-saving drugs," she told European
ministers of health and agriculture at a conference on antimicrobial
resistance in Amsterdam.
Aside from the human health considerations, the emergence of microbes
resistant to antibiotics and other pharmaceutical agents puts animal
health at risk and consequently has an impact on rural livelihoods
and food security. "AMR is a global threat that in this
inter-connected world cannot be solved in Europe alone," Semedo
Read more by clicking
We had to get at least one government entity into our Acronyms of the
Day- this is, of course, the Commodity Futures Trading Commission-
and the House Ag Committee held a hearing that featured the Chairman
of the CFTC. House Members raised many concerns with CFTC Chairman Timothy Massad,
including the importance of strong futures and derivatives markets
for end-users, reforms to Dodd-Frank, the Reg AT rule and its
potential impact on smaller market participants, and the continued
need to reauthorize the commission. Last year the House passed H.R.
2289, the Commodity-End User Relief Act, to reauthorize the CFTC,
with no corresponding action in the Senate. The CFTC has been unauthorized
since September 2013.
For more on the Wednesday hearing in DC- Click
AND ONE MORE
McCarthy will be in front of Mike Conaway
and his House Ag Committee this morning starting at 9:00 AM central
time- click here for the spot on the world wide web where you will be
able to tune in and watch the fun as they talk WOTUS and
more. Okay I lied- TWO more Acronyms.
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