Apply now for 2014 Rural Energy for America Funding

Farmers, ranchers and rural small businesses can apply now for grants and loan guarantees for clean energy projects under the Rural Energy for America Program – or REAP. REAP was renewed in the 2014 Farm Bill and supports a wide range of energy efficiency and renewable energy technologies, including wind, solar, biogas, biomass, small hydroelectric, geothermal, tidal, wave, and hydroelectric technologies.

The USDA accepts applications year round and people can apply now use existing application forms. Grants cover up to 25% of project costs. The loan guarantees facilitate lending by providing a guarantee of a portion of the principal to the lender. You can find more background information on REAP here.

An official notice of funding availability is expected in early April, with an application

deadline 60 days later. This notice would be for funds from the 2014 appropriation plus funds carried over from previous years (total about $28 million). When the final REAP rule is announced, possibly in June or July, a second funding announcement will be issued for the 2014 mandatory funding ($50 million) from the new Farm Bill. Applications submitted but not funded in the first round will be considered in the second round.

There will be some changes in projects eligible for funding this year. Due to changes in the new Farm Bill, there will be no funding for ethanol blender pumps or feasibility studies. As the statutory deadline has passed, there will be no funding for Energy Audit or Renewable Energy Development Assistance projects. The next opportunity to apply for those is next January.

How to win funding competition

Potential applicants should remember that the USDA awards REAP funds on a competitive basis, both within a state and nationally. Applicants improve their chances with careful planning to maximize the score on their application. Applications are scored on a number of criteria where careful planning and self-scoring can increase chances of success.

At Farmenergy.org, we provide tools and tips to help facilitate application preparation and self-evaluate applications scores.  Application templates are available at the Iowa USDA REAP web page. These templates can help dealers and distributors prepare multiple applications.

Applicants should also be sure to check in early with the state staff of USDA rural development. They can answer questions, provide useful advice and may need to visit the project during the application process.

The USDA is working on implementing new rules from the 2014 Farm Bill and these new rules are expected be released this summer.

Supporting Pollinators on Organic Farms

Concerned about pollinators on your organic farm? The Xerces Society recently released a new manual on Pollinator Management for Organic Seed Producers. This new publication aids organic seed producers in understanding the role and diversity of seed crop pollinators, as well as strategies for reducing pollen movement between organic and conventional farms. Profiles of common pollinators, strategies for managing pollination, and guidelines for specific crops are all included. You can download the publication here.

Visit the Xerces Society website for more publications on creating and conserving pollinators on organic farms which are available for download including:

• Pollinator Habitat Assessment Form and Guide for Organic Farms
• Organic Farming for Bees Toolkit
• Organic Farming Practices: Reducing Harm to Pollinators
• Organic-Approved Pesticides: Minimizing Risk to Pollinators
• Farming for Bees
• Biodiversity Conservation: An Organic Farmer’s Guide,  by the Wild Farm Alliance

Choosing a Legal Structure for Your Agriculture Business

Choosing a legal structure for your business is a task that can feel overwhelming to a small farm or value-added business enterprise. This guide is meant to serve as an overview and a starting point for a conversation with your accountant and attorney. The end goal is to aid you in selecting a structure which shields the primary assets of the owner from any type of litigation potential or liability claim that may occur from business activities.

Sole Proprietorship

Hanging a shingle is an easy, fast way to begin making business transactions. This straightforward approach automatically puts your business in the category of a sole proprietorship. The business is you, and you are the business for all intents and purposes. Nothing has to be done to set up this arrangement, unless the business is operating under a fictitious name. The concern for the business owner is that there is no legal framework to shield the business owner's individual assets from those of the business.

Partnership

A partnership is a single company owned by two or more people. Each partner contributes to all aspects of the business's management plan, financials, and share of profits and losses, and should include an exit or dissolution plan. Profits or losses from the partnership pass through to the named partners at tax time, rather than having the business file taxes.

Limited Liability Corporation

A very common structure small businesses use is a LLC, which stands for Limited Liability Corporation. It provides the liability protection of a corporation with the tax structure of a partnership, while providing operational flexibility.

Non-Profit

Non-profit status, or incorporating as a 501(c) 3 is unusual for agriculture enterprises, but not unheard of. Farms with a mission-based objective such as food justice or education, may qualify for this status. Surplus revenue must be used to achieve the mission of the business, rather than be dispersed as profit.

Cooperative

The cooperative is owned by those who use its services, and profits are distributed to the user-owners. It consists of a board and members that have voting rights. This is common in agriculture, where high capital infrastructure such as packing, storage, trucks, or processing facilities can be purchased, used, and collectively owned by cooperative members to the benefit of all. If there are surplus profits, coop members are taxed once on the profits and not at the corporate level.

C Corporation

The C Corporation is in and of itself a legal entity liable for its potential debts. This is a complex structure which is usually reserved for large companies with many employees, and is not common in the family farm or business model.

S Corporation

Profits and therefore taxes can pass through the S Corporation to the individual shareholders. It is possible to create an S Corp sub chapter on an LLC. As in the C Corporation, this structure is not common with farms and small food businesses.

In closing, it is wise for the small agriculture business owner to be educated about business structures and liability implications in order to protect primary assets. A small amount of planning and investment in engaging professionals where needed can protect the future of the business and its owners.

(by Heather Mikulas, Penn State University)

2012 Ag Census Highlights

A family affair:
Honey Locust Hills Farm

So who really are the farmers of today.  Every 5 years, the USDA National Agriculture Statistics Service takes a survey of farms and farmers.  And it's interesting to see some of just who are farmers are!  Highlights of the 2012 Census of Agriculture data release include:

• 22% of all farmers were beginning farmers in 2012. That means 1 out of every 5 farmers operated a farm for less than 10 years.
• Young, beginning principal operators who reported their primary occupation as farming increased from 36,396 to 40,499 between 2007 and 2012. That's an 11.3% increase in the number of young people getting into agriculture as a full-time job.
• 969,672 farm operators were female—30% of all farm operators in the U.S.
• The number of farms ran by Latino farmers increased from 82,462 in 2007 to 99,734 in 2012. That 21% increase reflects the changing face of America as a whole.
• 70% of all farms in the U.S. had internet access in 2012, up from 56.5% in 2007, but there is more work to be done to expand internet access in rural America.
• Farmers and ranchers continue to lead the charge towards a more sustainable energy future. 57,299 farms reported using a renewable energy producing system in 2012. That's more than double the 23,451 operations that reported the same in 2007. Solar panels accounted for 63% of renewable energy producing systems on farms, with 36,331 farms reporting their use.
• Nearly 150,000 farmers and ranchers nationwide are selling their products directly to consumers, and 50,000 are selling to local retailers. Industry estimates valued local food sales at $7 billion in 2011, reflecting the growing importance of this new market to farm and ranch businesses.
• Total organic product sales by farms have increased by 82% since 2007, from $1.76 billion in 2007 to $3.1 billion in 2012. Organic products were a $35 billion industry in the United States in 2013.

Deep Down & Dirty: The Science of Soil

A new BBC Documentary for 2014 is  Deep Down & Dirty: The Science of Soil.

For billions of years our planet was devoid of life, but something transformed it into a vibrant, living planet. That something was soil.

It's a much-misunderstood substance, often dismissed as 'dirt', something to be avoided. Yet the crops we eat, the animals we rely on, the very oxygen we breathe, all depend on the existence of the plant life that bursts from the soil every year.

In this film, gardening expert Chris Beardshaw explores where soil comes from, what it's made of and what makes it so essential to life. Using specialist microphotography, he reveals it as we've never seen it before - an intricate microscopic landscape, teeming with strange and wonderful life-forms.

It's a world where the chaos of life meets the permanence of rock, the two interacting with each other to make a living system of staggering complexity that sustains all life on Earth.

Chris explores how man is challenging this most precious resource on our planet and how new science is seeking to preserve it.

https://www.youtube.com/watch?v=nMm5cD1-xGo

Need Clarity on the NOP Seed Requirement?

Save the Date June 6, 2014: The Organic Seed Alliance will host a webinar through eOrganic that educates certifiers and certified operations on the topic of organic seed availability and sourcing. The webinar will cover the organic seed regulatory requirement, including the National Organic Program's (NOP) 2013 guidance that aimed to clarify this requirement. Perspectives on enforcement and sourcing challenges will be shared, as well as recommendations for improving organic seed sourcing. This project is supported by a contract from the USDA Agricultural Marketing Service's National Organic Program. Registration will be opening in the next few weeks on our webinar page at http://www.extension.org/pages/25242.

Meat prices continue to rise for producers, consumers

“Bargains in the meat case might be hard to find,” said University of Missouri Extension economist Ron Plain at the recent Ag Marketing Outlook Conference.

Bringing home the bacon this year requires more cash. Short supplies of cattle and hogs are pushing prices upward at the sale barn and the supermarket.

Porcine epidemic diarrhea virus (PEDV) caused the largest-ever drop in pigs per litter (PPL) from December to February. PPL plummeted by 5.5 percent. The second biggest drop was June to August 1988, when PPL dropped 1.68 percent. “We haven’t seen this magnitude of loss before,” Plain said.

The spread of PEDV slows during warm weather and appears to have peaked in February and March.

Pork inventories declined 3.2 percent in March. Plain said hog prices are expected to remain well above $100 per hundredweight this summer and decline to the $90s by the end of the year.

This translates to higher prices for consumers and producers. The U.S. Bureau of Labor Statistics reports that a pound of bacon averaged $5.55 in March, 21 percent more than last year. Ham increased by 12.5 percent to $4.20 per pound. Prices in the Midwest remain lower than national prices, except for eggs, which saw a 15 percent increase.

“Where’s the beef?” might be the next question. The drought of 2012 reduced forage supplies for cattle and contributed to the lowest number of cattle since 1951, Plain said. Future cattle prices are predicted to be around $1.40 per pound. Cow-calf profit margins should remain about $350 per cow, he said.

Plain said USDA forecasts less beef on the market throughout 2014. Beef producers should expect strong prices all year. He said cattle slaughter through mid-April was down 4.8 percent.

The Bureau of Labor Statistics showed an 11 percent increase in the price of ground beef to $3.69 per pound in March.

Per capita meat consumption in 2012 was the lowest since 1991. Plain said consumers face sticker shock as beef and dairy prices increase, and there is less meat available for export. Continued drought in California, which produces one of five dairy cows, will affect the nation’s supply of milk used in dairy products.

In row crops, MU Extension specialist David Reinbott said planting progress is behind. Based on USDA’s March 31 planting intentions report, there will be 3.7 million fewer corn acres planted this year.

The national season-average corn price should be around $4.40 per bushel, but that could fall to just under $4 if ending stocks are over 1.8 billion, Reinbott said. The price may be nearer $5 if ending stocks are closer to 1.2 billion bushels. New crop prices could peak in May and trend downward to a seasonal low in October if planting is not delayed much and there is little significant heat or dryness.

Reinbott said U.S. producers are expected to plant fewer acres of corn, but soybean acres could be more than 5 million.

Reinbott also said civil unrest in Ukraine may drive up wheat prices across the world. Ukraine exports 6 percent of the world’s wheat.

Domestically, drought coupled with freezing temperatures in late March caused about one-third of the nation’s wheat crop to be in poor to very poor condition in key states such as Kansas, Oklahoma and Texas.

(by Linda Giest, MU Writer)