acreage living May 1999

ISU cooperative extension

In this issue: acreage living home page

 The Changing Structure of Agriculture

Tim Eggersby Tim Eggers, ISU Extension Field Specialist/Farm Management, Page County
Phone: 712-542-5171 - e-mail:

The Iowa State University Department of Economics recently held a day long program titled Surviving and Thriving: Agriculture in the 21st Century. In Southwest Iowa, the program became the basis for the Wallace Foundation for Rural Research and Development (WFRRD) annual meeting. Dr. Michael Boehlje, Purdue University, was the key note speaker. This article is adapted from the program.

What is changing?
Some might think that the current low prices are new changes to agriculture. If you have subscribed to the Acreage Living Newsletter over time, you read a series of three articles written over the summer and fall explaining the current low prices and their anticipated impact on farmers. The current low prices are due to a confluence of several factors. While record low prices have been set in some commodities, low prices are part of the cyclical nature of production agriculture.

Some might think that the decreasing number of farmers, increasing farm size, and increasing use of and dependence on technology are new changes to agriculture. These are the three changes that have been with us over recorded time in agriculture. While the new technologies being adopted by farmers are challenging to all of us as consumers to comprehend, they are similar to the introduction of traction power, commercial fertilizer, and hybrid seed varieties. These changes are causing an increase in the consistent trend for increased management and capital resources and decreased labor resources needed for agricultural production.

Farmers' roles in the food supply chain are changing.
Farmers have long acted as excellent economic agents because of the nearly pure competition they face in input and output markets. Farmers selling into commodity markets are unable to differentiate their crops or livestock from their neighbors to enjoy a different price. The commodity market that farmers have traditionally sold into is changing. As new opportunities outside of the familiar commodity markets present themselves, new skill sets in the area of contract evaluation and business relationship management are needed.

A manufacturing mentality and process control aspect is becoming more prevalent. If enterprise records show an efficiency measure is not accept able, that process issue can be addressed. Anything that can be measured can be optimized, is a favorite quote of one of my animal science colleagues. Traceability throughout the chain is desirable to many consumers and processors. Technologies now exist that will allow consumers to trace down to the farmer and the individual cow that produced the calf that produced the steak that is sold under labels like Precision Beef Alliance.

With an increase in the manufacturing mentality and process control comes a greater ability to produce differentiated products. Generic commodity production will not end. There will continue to be a need and market for generic commodities. Enhanced component commodities and specific attribute raw materials have been in production for several years. Crops like high-oil, high protein, or high-phytase corn are examples. Markets for specific trait crops are developing. New relationships are being created in some instances between life-science companies and end-use processors. Farmers are struggling to find their places in those relationships.

Information and precision related to agricultural production is on the increase. Remote monitoring and measuring technologies allow for greater control of information with geographic, time, and other dispersions. Think of this as the high-tech version of the big house on the hill that was a common feature of many successful farms. An example of this is the ability of crop insurance researchers located in Council Bluffs who know what the climatalogical conditions are in a citrus grove in Texas in real time. Other examples include livestock productions dispersed over a wide geographical area with a single source of management, and geographical information service data (including unique crop characteristics) processed at levels beyond the individual farm level.

What does membership in the supply chain entail?
Food safety-traceback - A loss of anonymity will be viewed as a negative consequence for farmers who feel confidence in their anonymity. Farmers who have confidence in their production systems will view traceback as a positive.

More end-user responsive - Incentive based systems for information feedback will allow farmers to adjust practices to better suit marketplace demands.

Better flow scheduling - One of the main roles of commodity prices has been to provide flow-scheduling information. This is done at the local level by basis (the difference between local cash and nearby commodity futures prices). With better information transfer, the inefficiencies introduced by misunderstood market signals can be minimized.

Improved quality control - Involvement of members of the chain from the germplasm/genetic material source end to the retail sales/consumer end will allow for greater quality control through traceback, end-user response, and flow scheduling. A significant problem introduced by segmentation of production agriculture is transaction costs in terms of information, dollars, and quality.

Who will control the chain?
This is the question being addressed by researchers at Iowa State University and elsewhere. Information management and relationship management are the most valuable parts of a supply chain. Production of the physical product is a necessary part of the process, but returns to the production of that product will depend on the information and relationships that are developed and maintained. Farmers in models like almond and sugar beet production supply chains are the ones we want to study to see why they have been successful in terms of high rates of return on investments. Farmers in models like poultry production are already being studied to see what factors can lead to lower rates of return on investments.

Decreased segmentation of agricultural production processes is the real change in the structure of agriculture. Maintaining and increasing the returns on farmer's equity while providing for a desirable economic, social, and ecological environment is the challenge.


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 Fine-tune the Pasture

Carroll Olsenby Carroll Olsen, ISU Extension Field Specialist/Crops, SW Area Extension Center
Phone: 712-769-2600 - e-mail:

Well, you've read all those past Acreage Living articles about care, feeding, and management of your pasture and hay ground and you've got an abundance of growth coming on and no way to take care of all of it. Now what are you going to do with it? A word of caution -- this is a decision that needs to be made quickly. What you do now will affect the quantity and quality of forage for the rest of the year.

Mother Nature (MN) says all plants and animals will try to reproduce. As soon as a plant produces seed, MN says it's okay to stop, or at least slow down growth. So, your goal is to not let reproduction happen. And most forages, especially grasses, do most oftheir growing in the spring.

So, you've got several alternatives -- all correct depending on your own situation. In the end, what ever you do will be right for you. Take note of what your neighbors are doing, for educational purposes, but their goals may be different.

The first scenario might be to do nothing. Especially if your acreage is not particularly heavily used and making the most of every square foot is not important to you, this may be the one for you. Read no farther! You might watch it for weed control needs, however. (Your neighbors certainly will.)

But if you say, I've always got too much forage in the spring, and not enough in the hot summer months, putting up a crop or hay and saving it for a bit later in the hotter, dryer periods might be for you.

Or, maybe this is a chance to harvest and sell some of your output to help pay for all the fertilizer and weed control we've been recommending.

Either of the second and third alternatives will entail some method of harvest, I assume baling. Most usable for small producers and small users are small bales-those that weigh 40 to 80 pounds, are tied with either twine or wire and have to be picked up and stored away for later use. If you've got more acreage and the equipment to handle them, the large, round bales might be a possibility. They will usually weigh in excess of 1000 pounds.

Another possibility is to let someone harvest on "shares." They will put your share in storage and take the rest of it to cover their expenses, including labor.

Or, you could sell it "in the field" to someone that wants all of it and you don't need any of it.

Or rent it to someone for a short period of time so they can harvest it with their livestock. I'd suggest a charge per head/day. Our farm management specialists probably have some help there.

Lots of possibilities and all but the first require some thinking and arranging ahead of time. Be prepared!


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 Call "Iowa One Call" Before You Dig

Whether it's a small or large construction project or a homeowner project (putting up a fence, clothes line, building a deck, etc.) call (800-292-8989) 48 hours prior to digging (not counting weekends or holidays). Iowa One Call will notify the owners and operators of underground facilities who will locate underground utilities that may be present.

Calling Iowa One Call before you dig is not only smart, it is law. Significant fines are possible for people who damage underground utilities by not calling first.

You can visit the Iowa One Call homepage at:

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 Fencing Law

Shawn Shouseby Shawn Shouse, ISU Extension Field Specialist/Ag Engineering, SW Area Extension Center
Phone: 712-769-2600 - e-mail:

Have you ever wondered whose job it is to maintain the fence between you and your neighbor? Erecting and maintaining a tight fence is the joint legal responsibility of the two adjoining land owners. Property line fences are jointly owned by both land owners, and cannot be changed by one owner without consent of the other. If either owner desires a fence, both are required to build and maintain their fair share. Deciding the fair share is up to the owners.

fencingA common method for dividing responsibility is to adopt the arrangement held by the previous land owners. Another common method is to use the "right hand rule". By this method, as you face the fence, you are responsible for the right hand half of the fence. While these methods are commonly used, they are not required. Two land owners may establish any division of fence responsibility that is mutually agreeable. In order to be binding, the agreement must be filed with the county recorder. Once filed, the agreement remains in force for following land owners until a new agreement is filed. If two land owners cannot reach a satisfactory agreement, township trustees may be asked to serve as "fence viewers" who make binding judgment on fencing disputes. Your attorney can offer advice on working through the process.

The law defines materials and construction specifications for a lawful fence. While many options exist, three common minimum requirements are: at least 3 boards on posts not more that 8 feet apart; at least 3 strands of barbed wire on posts not more than one rod (16.5 feet) apart; or at least 4 strands of smooth high tensile wire on posts not more than two rods (33 feet) apart.

Iowa's fence law is recorded in the Iowa Code Chapter 359A. You can view the law by entering the chapter number at the internet site Check your abstract or visit your County Recorder to see if any written fence agreements are on file for your property. If you have reason to think your line fence is not on the property line, contact a land surveyor to check it out. An erroneous boundary may become the true boundary if left for ten years without challenge.

If you have questions about property or boundary rights, contact your attorney or check with the Iowa Attorney General's Office, Environmental & Ag Law Division, Executive Hills East, Des Moines, 50319, phone 515-281-5351.

Acreage Living is published monthly. For more information, contact your local county ISU Extension Office.
Editor: Shawn Shouse, ISU Extension FS/Ag Engineering, SW Area Extension, 53020 Hitchcock Avenue, Lewis, Iowa, 51544, Ph: 712/769-2600
Layout & Design: Paulette Cambridge, Office Assistant, SW Area Extension, 53020 Hitchcock Avenue, Lewis, Iowa 51544, Ph: 712/769-2600

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...and justice for all.
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be made available in alternative formats for ADA clients. To file a complaint of discrimination, write USDA, Office of Civil Rights, Room 326-W, Whitten Building, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.