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  • Upcoming Deadline: Beneficial Ownership Information 

    Upcoming Deadline: Beneficial Ownership Information 

    As we wind down the year, an approaching deadline will impact many producers and operations throughout the country. The deadline for filing Beneficial Ownership Information (BOI) is set for January 1, 2025. The Corporate Transparency Act (CTA) is the federal act that requires filing the BOI with the Financial Crimes Enforcement Network (FinCEN). The BOI is sometimes collected by financial institutions, but providing that information does not satisfy filing with FinCEN. FinCEN reporting collects information that is not collected by a financial institution.  FinCEN requirements include: 

    1) a unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents: 

    a) U.S. passport, b) state driver’s license, c) identification document issued by a state, local government, or Indian Tribe, or d) Foreign passport. 

    2) Any trade name or doing business as (DBA name

    3) Jurisdiction of formation and registration (if a foreign entity)

    4) Information about company applicant(s)

    5) Certification by the individual filing the report with FinCEN:

    a) The report is true, correct, and complete.

    FinCEN defines a “Beneficial Owner” as an individual who directly or indirectly exercises substantial control over a reporting company or owns or controls at least 25% of the ownership interests of a reporting company. 

    There are two types of reporting company definitions:

    • Domestic reporting companies: corporations, limited liability companies, and any other entities created by the filing of a document with a secretary of state or any similar office in the United States.
    • Foreign reporting companies: entities (including corporations and limited liability companies) formed under the law of a foreign country that have registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

    There is no maximum number of beneficial owners who must be reported to FinCEN. If you fall under the above definition, you should consider filing the BOI application with FinCEN. 

    Failing to file can result in monetary penalties and possible felony charges. More information on filing BOI, and updates, can be found here. 

    Martinez, Charley. “Upcoming Deadline: Beneficial Ownership Information.” Southern Ag Today 4(49.1). December 2, 2024. Permalink

  • Sifting through the Rice Market: Rising Supplies and Growing Competition

    Sifting through the Rice Market: Rising Supplies and Growing Competition

    With several key moves during the 2024 rice market, and harvest behind us, we can let the dust settle and make some observations and conclusions as we look toward 2025. A major shift in domestic production patterns emerged in 2022; volatile input costs, triggered by the Russian-Ukraine War and supply chain disruptions, led to a decline in rice acreage as southern U.S. farmers opted to grow less input-intensive crops like soybeans and corn. These challenges were exacerbated by a severe drought in California that substantially reduced short/medium grain rice production. Rice production rebounded in 2023 and maintained that level in 2024, when more stable fertilizer prices shifted producers back to rice to counter the risk of lower prices, as was the case in other commodities (Figure 1). Recent conversations with agronomists indicate that U.S. rice farmers may maintain or expand rice acreage and production in 2025.

    Figure 1. U.S. All Rice Class Production and Acres Harvested (2014 – 2024)

    The November 2024 World Agricultural Supply and Demand Estimates (WASDE) report indicates the current outlook for U.S. rice is for larger ending stocks, weaker exports and unchanged supplies and domestic use from October 2024 (USDA-AMS, 2024). All rice exports combined are lowered 1 million cwt to a total of 100 million. All rice ending stocks are increased 1 million cwt to 46.7 million, a 19% increase from the 2023/24 marketing year. The seasonal average farm price for long grain and southern short/medium grain is unchanged at $14.50/cwt, suggesting a cautious domestic response to the stock increases (Figure 2).

    Figure 2. Rice Marketing Year Average Farm Prices (2020/21 – 2024/24F)

    Internationally, it’s important to note the spread between India’s rice, Thailand/Vietnam rice, and U.S. milled rice. U.S. long grain is and has remained for several months at $800/metric ton, while Vietnam and Thailand are currently selling at $550 and $500/metric ton, respectively. The price gap widened following the September 2024 lift of India’s export ban on non-basmati milled rice. Currently, India has set the price floor at $490/metric ton. India’s return to the international market has forced Thailand and Vietnam to lower their prices by 10-13%, impacting demand for U.S. long grain rice in countries like Iraq. Iraq’s preference for cheaper rice from Asia, influenced by the price differential, has reduced demand for U.S. rice exports and poses a challenge for U.S. farmers (Childs and Jarrell, 2024). 

    Looking ahead, global rice exports for 2025 are expected to increase by 4% YoY, bringing total exports to 56.3 million metric tons. India is projected to reclaim much of their share, reaching a volume of 21 million tons. However, countries like Pakistan, Thailand, Vietnam, and the United States are expected to see a decline in export volumes (Figure 3). 

    Figure 3. Milled Rice Exports (2020/21 – 2024/25Nov)

    Source: USDA-FAS, 2024

    References

    United States Department of Agriculture, Agricultural Marketing Service. (2024). World Agricultural Supply and Demand Estimates (WASDE-654). Retrieved November 9, 2024, from, https://www.usda.gov/oce/commodity/wasde/wasde1124.pdf

    United States Department of Agriculture, Foreign Agricultural Service – PSD Reports. (2024). World Rice Trade. Retrieved November 9, 2024, from, https://apps.fas.usda.gov/psdonline/app/index.html#/app/downloads

    United States Department of Agriculture, National Agricultural Statistics Service. (2024). Rice Production and Acres Harvested. Retrieved October 2024, from, https://quickstats.nass.usda.gov/

    Loy, R., and Hunter, B. (2024). The Disparity Between Crop Prices Received and Input Prices Paid.” Southern Ag Today 4(28.3). July 10, 2024. Available at, https://southernagtoday.org/2024/07/10/the-disparity-between-crop-prices-received-and-input-prices-paid/

    Childs, N., & Jarrell, P. (2024). Rice outlook: October 2024 (Report No. RCS-24I). U.S. Department of Agriculture, Economic Research Service. Retrieved November 2024, from, https://www.ers.usda.gov/webdocs/outlooks/110219/rcs-24i.pdf?v=5219.8

    Loy, Ryan. “Sifting through the Rice Market: Rising Supplies and Growing Competition.” Southern Ag Today 4(48.3). November 27, 2024. Permalink

  • An Old Menace

    An Old Menace

    Over the weekend, USDA APHIS announced a new restriction on livestock from Mexico due to an occurrence of New World Screwworm (NWS) in the Southern Mexican state of Chiapas.  APHIS is restricting the importation of animal commodities originating from, or transiting through, Mexico immediately while awaiting more information of the size and scope of the outbreak.

    History

    The screwworm, Cochliomyia hominivorax, is a fly that is a flesh-eating parasite. The screwworm fly spreads by depositing its eggs around an open wound.  The larvae then crawl into the wound feeding on the animal’s flesh.  The adult female fly mates only once in its lifespan, which led to the strategy of controlling the screwworm fly by releasing sterile male flies, thus preventing reproduction.  Eradication efforts through releasing sterile male flies began in the 1950s and resulted in eradication from the U.S.  In fact, it was ranchers who donated money and raised $2.8 million to match the federal appropriation that ramped up eradication in Texas in the early 1960s.  Later coordinated efforts with Mexico and Central American countries pushed the flies down to Panama.  But in recent years, the flies have been making a comeback in Central America overwhelming the strategy of sterile fly release.  The last reported occurrence in the U.S. was in deer in Big Pine Key, Florida in 2016.  

    During the eradication efforts in the 1950s, ranchers could send in sample tubes of flies for identification.  Knowing the location of occurrences allowed for pinpointing release areas.  Figure 1 is a picture of the sample tubes.  Figure 2 is a map of the screwworm overwintering range in average years (Graham, 1985).   

    Imports

    Feeder cattle imports from Mexico are an important source of cattle for U.S. cattle feeders and beef production.  Imports have a highly seasonal pattern with the most entering in the Spring and late in the year.  These steers and spayed heifers often first go to stocker grazing programs and then to feedlots.  Imports in 2024 have amounted to about 5 percent of feedlot placements.  Cattle enter the U.S. through 11 ports of entry: 3 in Arizona, 2 in New Mexico, and 6 in Texas.  Year to date, 1,195,702 feeder cattle have entered the U.S.  Of those, 29 percent have entered through Arizona, 51 percent through New Mexico, and 20 percent through Texas.

    A simple, back of the envelope analysis would estimate that a 5 percent decline in feeder cattle supplies would lead to about an 8.6 percent increase in feeder cattle prices, all else held equal.  We might also consider the impact regionally, as most of these feeder cattle would be fed in the Southern Plains or the Southwest.  The limitation on imports would likely have a significant effect on feeders in those areas. 

    Other Considerations

    One of the major differences today compared to pre-eradication is the presence of many more deer and exotics.  In the “old days”, there were few deer in parts of Texas due to the impact of screw worms on deer survival.  Eradication allowed rapid increases in the deer population.  The recent development of the exotic wildlife industry presents the potential for much larger economic harm from re-infestation.

    Old timers will speculate that one reason there were so many great team ropers from Texas is because of the constant checking cattle closely and doctoring them for screw worms.  The pest even enters popular literature in The Good Old Boys by Texas writer Elmer Kelton.  In this novel the protagonist, Hewey, spends a ton of time roping, checking, and doctoring their calves.

    It’s important to remember that screw worms can be controlled.  The use of sterile male flies allows proven and effective control.  Cooperation with our southern neighbors pushed eradication as far as Panama.  But, as is often the case, these old menaces return.  Fortunately, control is possible but, it requires vigilance.

    Figure 1.  Tubes for Ranchers to Return Screwworm Samples to the Eradication Program.  From the library of David Anderson.  

    Figure 2.  Map of Screwworm Range.  

    Source: Graham, 1985.

    For Further Reading:

    Graham, O.H. (editor) “Symposium on Eradication of the Screwworm from the United States and Mexico.” Entomological Society of America.  1985.

    Kelton, E.  The Good Old Boys.  Doubleday.  1978.

    Novy, J.E.  “Screwworm Control and Eradication in the Southern United States of America.”  FAO.

    Anderson, David, Josh Maples, and Charley Martinez. “An Old Menace.” Southern Ag Today 4(48.2). November 26, 2024. Permalink

  • The Long Term Economic Struggles of Southern Peanut Farmers

    The Long Term Economic Struggles of Southern Peanut Farmers

    This article is a companion to the article titled: The Long Term Economic Struggles of Southern Cotton Farmers published in Southern Ag Today on October 28, 2024.

    Besides cotton, another primary row crop suitable to southern soils and the climate is peanuts. As a legume, peanuts are often used as a rotational crop with cotton and/or corn. Peanuts are grown primarily in the southeastern U.S. from Virginia down to Florida and over to Alabama, with some acreage as far west as New Mexico, Texas, and Oklahoma. In 2024, the U.S. is projected to produce 3.2 million farmer stock tons of peanuts (USDA ERS). Market year average prices are expected to be around $530 per ton (USDA FSA), and if realized, the projected total value of peanut production is expected to be $1.7 billion. Not only are peanuts an important rotational crop, but they also contribute significantly to the rural farm economies of the Southern region.

    Peanuts are capital intensive particularly because of the specific harvest equipment that must be used to dig up the vines. Then after the vines dry, another machine picks the peanuts from the vines. Analysis of data from the USDA Economic Research Service illustrates the financial challenge of the rising costs of peanut farming. Figure 1 highlights the ongoing profitability challenges southern peanut farmers have faced over the last 29 years. These data account for actual production costs incurred during the production process by farm operators, landlords, and contractors and include expenses for labor, equipment, and other inputs. Revenues generated from peanut sales are also analyzed. The revenues do not include government payments and crop insurance indemnities received by producers. Potential government payments during this time period may include traditional farm bill programs for farmers with base acres, as well as ad-hoc disaster relief programs.

    According to Figure 1, the average peanut farmer managed to earn a profit in only five of the last twenty-nine years. On average, peanut growers faced annual losses of $57 per acre. Referring back to the companion article linked above, cotton farmers also faced average annual losses of $94 per acre during this same time period. These long-run average losses per acre show the continued financial challenges incurred by southern farmers despite growing crops that are suitable for the regional climate and soils. As with cotton, long-term economic losses to peanut production put the sustainability of Southern agriculture at risk. A continuation of these trends could result in a prolonged decline in agricultural production, eroding the economic foundation of rural farming communities across the Southern region. It is evident that there continues to be a need for effective agricultural policies and support programs.

    Figure 1. Peanut Production Total Costs, Revenue, and Returns for Producers in the United States (1995 – 2023).

    Data Source: U.S. Department of Agriculture (USDA) Economic Research Service (ERS), Commodity Costs and Returns for Peanuts, May 1, 2024.

    References: 

    Liu, Yangxuan. “The Long Term Economic Struggles of Southern Cotton Farmers.” Southern Ag Today 4(44.1). October 28, 2024. https://southernagtoday.org/2024/10/01/the-long-term-economic-struggles-of-southern-cotton-farmers/

    U.S. Department of Agriculture (USDA) Economic Research Service (ERS), Commodity Costs and Returns for Peanut, Updated on May 1, 2024.

    U.S. Department of Agriculture (USDA), Economic Research Service (ERS), Oil Crops Outlook: October 16, 2024. https://www.ers.usda.gov/webdocs/outlooks/110202/ocs-24j.pdf?v=2829.3

    U.S. Department of Agriculture (USDA) Farm Service Agency (FSA), Projected 2024/25 Market Year Average Prices. Updated October 31, 2024. https://www.fsa.usda.gov/documents/2024-myapdf-1

    Liu, Yangxuan, amd Amanda R. Smith. “The Long Term Economic Struggles of Southern Peanut Farmers.“ Southern Ag Today 4(48.1). November 25, 2024. Permalink

  • Preparing for the (Camo) Season

    Preparing for the (Camo) Season

    ‘Tis the season for camo, foothills that are sprouting pickup trucks, and men, women and children afoot on varying terrain armed with rifles, bows, and dogs. If you are a landowner, there is a good chance you have been approached by someone seeking permission to hunt on or traverse your land. Before counting points on bucks, here are some points for landowners’ consideration to prepare for this season.

    Get a signed lease. A hunting lease will provide clarity and protection to all parties by defining access, laying out expectations, addressing property management and use, and providing some liability protections. Agreements should be documented in writing with detail to prevent any confusion or misunderstanding of the agreed terms and as insurance should a dispute or issue arise. When drafting a lease, be specific and thorough. The danger of a “simple” lease is that most lease disputes don’t arise over terms that are clearly set forth in the lease, but rather most disputes arise from terms that are not addressed in the lease. Among the important lease terms such as naming the lessor(s) and lessee(s), payment terms, length of lease, liability, identifying the property and access points, remedies for breach and the like. A thorough hunting lease should address management kills, ATV use, fence and trail repairs, fallen trees, feeding plots, use and location of outbuildings, blinds and tree stands, whether guests are permitted and how many at once, communication with lessor, whether the hunting rights are exclusive or nonexclusive, wildlife that may be hunted, known or potential hazards, and other considerations of important to either party. If a dispute arises, a court will first look at the lease, and only the lease, to resolve it. Absent extenuating circumstances, additional agreements or promises which are not reflected in the lease itself will not be enforced. 

    Reinforce to anyone hunting on your land that it is their responsibility to know the property boundaries. It is unlawful for hunters to track or retrieve wounded game on private property without permission. Hound hunters should check to see if their state has a right to retrieve law. These statutes generally allow the owners of hunting dogs to enter upon the land of another without permission for the purpose of retrieving their hunting dogs. Virginia’s 100-year-old statute was recently challenged by a group of landowners arguing that Virginia’s right to retrieve law amounted to a taking of private property without just compensation, converting their private property to public use.[1] Despite alleging that hounds were a nuisance which had killed a landowner’s chickens and would spook horses allegedly justifying compensation from the state, the circuit court held that the law was merely an exception to criminal trespass and did not deprive the landowners of any property rights. In response, Virginia’s Board of Wildlife Resources considered two proposals which would have required hound hunters to use GPS collars and make reasonable attempts to prevent their dogs from entering another’s property. Though it was questioned whether the Board had authority to require such measures, both were ultimately rejected. 

    Hunting leases are contractual agreements to which every other basic principle of contract law applies. Make sure leases are written, thorough, and reviewed by a knowledgeable agricultural attorney licensed in your jurisdiction. If you are hunting on your own land or that of others, know the property boundaries and as necessary, consult with a local attorney on your state specific laws related to one of the oldest practices in the world.

    [1] Medeiros, et al v. Virginia Dep’t of Wildlife Res., Record No. 230691 (Va. Sept. 26, 2024) (unpub. order).

    Friedel, Jennifer Shaver. “Preparing for the (Camo) Season.” Southern Ag Today 4(47.5). November 22, 2024. Permalink