Genetics or Environment?

April 5, 2009

I sold showpigs to 4-H and FFA students this past week.  Showing swine is near and dear to me as I probably wouldn’t be farming today if it weren’t for showing swine.  Striving to improve on my placing at the Lafayette County Fair caused me to begin my life-long study of genetics and improvement of livestock through selection.  Check out “How I Became a Swine Seedstock Supplier.”

Our swine show is an excellent learning opportunity.  Showpigs are weighed and identified in April.  The maximum weight was 88 lbs. on Saturday. 

The students then have the responsibility of caring for the swine until the show in July.  After the show, each student is allowed to sell one showpig in the livestock auction.  Local businesses support the students by purchasing a pig or other species of livestock.  Prices are usually above market price so the students are almost guaranteed to make money on their livestock project.  Students are also required to keep production and financial records on their livestock project.  Students learn responsibility, accounting, and marketing skills all in one fun project.

Not everyone is successful, however.  There is a minimum weight, (220 lbs.), to sell in the livestock auction.  This requires an average daily gain of about 1.5 lbs per day, (170 lbs. of gain in 113 days).  This is not difficult to accomplish with today’s swine.  However, to achieve this average daily gain, a pig needs clean feed and water, shelter, shade, and a way to cool off, (sprinkler or wallow), when it gets hot.  If a student fails to provide these ingredients every day, he/she may find his/her pig is too light to sell at the auction.  Another great learning experience.

One family had never purchased from me before.  I helped them deliberate whether a smaller pig, (46 lbs.), would be big enough by fair-time.  They asked me how well my pigs gain weight.  I told them average because I was more interested in what their pigs have weighed at the fair in the past.  I asked this because it’s been my experience that families tend to have similar experiences from year to year even though the pigs are different.  Some families always bring 300 lb. pigs to the fair.  Other families always struggle to make the minimum weight.

This is easily explained because average daily gain is only moderately heritable.  Heritability is expressed from 0 to 1 with 0 being not heritable and 1 being completely heritable.  Average daily gain in swine is about .3.  This means that 30% of the variation in average daily gain is due to genetics. 

What causes the other 70%?  Environment!  That explains why the people managing the pigs are a much greater factor than the genetics of the pigs.

The family decided to take the smaller showpig.  I will let you know how they did after the fair in July.

What are you blaming genetics for?  Could your environment be a greater factor?


2008 US Farm Bill

March 29, 2009

“The unintended consequences of a government program are usually greater than the intended consequences.”  Unknown origin.

Have you ever wondered what the US Farm Bill looks like to an individual farmer?  We signed up our farm for the 2009 growing season.  I wanted to get on my high-horse and opt-out; but my parents talked me into taking the “free” government money.  When I hear farmers griping about “welfare moms” taking government hand-outs I can usually change the conversation with a simple question.  “How much is your government payment?”

The 2008 Farm Bill is on the books.  It covers the 2009 through 2012 growing seasons.  According to the “Wisconsin Agriculturist”, the 2008 Farm Bill works out to $189 billion for domestic nutrition programs and $102 billion direct support for farmers.  The direct farmer support can be further broken down into $42 billion for commodity crops, $24 billion for conservation, $22 billion for crop insurance, and $14 billion for supplemental disaster assistance, trade, horticulture and livestock production, rural development, research, forestry, energy, and other programs.

With $10 billion in offsets from tax provisions the direct farmer support is reduced to $92 billion, or about $18.4 billion per year.  That works out to about $60 for every American.  What are you getting for your $60?

An excellent informational resource is 2008 Farm Bill Side-by-Side.

Eligible commodities are wheat, corn, grain sorghum, barley, oats, upland cotton, rice, peanuts, soybeans, other oilseeds, and pulse crops.  Payment rates are found in the previous link.

What entitles a farmer to receive a direct government payment?  Eligible producers share in the risk of producing a crop on base acres on a farm enrolled in DCP; annually report the use of the farm’s cropland acreage; comply with conservation and wetland protection requirements on all of their land; comply with planting flexibility requirements; use the base acres for agricultural or related activities; and protect all base acres from erosion, including providing sufficient cover as determined necessary by the county Farm Service Agency committee, and control weeds.

That all sounds great, except I know of no farmer that has had their farm checked for these provisions. 

Our direct government payment for 2009 is $3,552.  How is this determined?

The direct government payment is based on the historical production of a farm.  This is an average record of the various crops and acres planted to each crop.   The USDA refers to this as “base acres”. 

The base acres are then multiplied by 83.3% to get your payment acres.  This has been reduced from 85% in the previous farm bill.

Your payment acres are then multiplied by the historical county yield to calculate yield per acre in bushels.

Bushels are then multiplied by the payment rate to determine the direct annual payment in dollars.

Here is what our farm looks like:

Commodity Base Acres Payment Ac. Yield Pay rate Direct pay
Corn 130.6 108.8 112 $.28 $3412
Barley 10.7 8.9 55 $.24 $ 117
Oats 18.2 15.2 62 $.024 $  23

The strange thing about this is we don’t have to grow these crops to receive the payment.  All we have to do is own or rent the base acres.  Farmers look at the expected government payment when valuing land.  An unintended consequence of the US Farm Bill is raising the value of farmland. 

Another strange thing is the pay rate.  This seems to be based on the strength of commodity lobbyists.  Look at barley and oats.  On our farm these two crops are managed the same.  Their effect on the soil is virtually the same.  Why is their payment rate so different?  The only reason I can guess is that the barley lobby is more powerful than the oat lobby.

We have over 100 acres of hay.  Why isn’t there a payment for this commodity?

The strangest thing of all is we don’t know why we receive this money.  We are long-term stewards of the land.  We don’t do anything differently based on the government program.  All it costs us is a couple hours of paperwork.

The most recent statistic I saw was from 2002.  Only one third of farms received a government payment.  Most of the farms that received a government payment received substantially more than $3500.  If anyone knows of more recent statistics, please comment.


Triple Bottom Line Accounting: A Truer Measure of Success

February 18, 2009

How is your company’s Triple Bottom Line, (TBL)?  Triple Bottom Line is the concept that a balance sheet can be more than profit or loss.  Social and ecological factors, as well as economic factors, need to be considered for a company to be truly successful.  People, planet, and profit.

TBL can even be considered for your personal life.  Almost everyone makes/spends money.  Everyone has an impact on the environment.  Everyone has social interactions.  How is your personal TBL?  Where would you like to improve?

TBL is highly relevant for a family farm.  We own/manage the farm. We live and raise our family on the farm.  We are the labor.  We consume its products.  We interact with neighbors and the surrounding community.  We pass the farm on to another generation.  Farmers were thinking about TBL before the concept was named.

Let’s look at TBL from the perspective of my farm.

PROFIT          

There are three of us on this farm.  No one has an off-farm job or any other source of income.  We need to make enough profit every year to cover our living expenses or we will have to borrow the difference from the bank.  This would take our net worth in the wrong direction.

A farmer can use many write-offs to reduce his tax burden.  Machinery depreciation, interest on loans, and health savings accounts, are examples of write-offs, along with regular business expenses as well.  However, it’s worth noting that if a farmer wishes to pay down debt he must use after-tax dollars.  So, even though we want to minimize our taxes, it’s not a bad thing to show a profit.

Our farm had two tough years in 1998 and 1999 when the hog market crashed.  Since then, we have been able to cover our living expenses and pay down some debt every year.  Our economic bottom line is ok for now.

PEOPLE

For the most part, the three of us work well together.  We communicate regularly and respect each other’s contributions.  Each of us can take time off from the farm when we want to.  We take time to interact in our community and visit friends and family.

What concerns me is our average age, which is 56.  It’s been said that if the average age in your company is over 35, your company is dieing. 

How will I manage the work-load if my parents want/need to retire?  I don’t really want to work with an employee.  Could I find an intern who would like to apprentice farm?

Our social bottom line is ok for now, but changes loom in the future.  We need to visualize and make plans now. 

PLANET

There are many ways to measure ecological bottom line.  Soil is probably the most popular way to measure ecological bottom line for a farm.  Is there a net gain or loss in volume of soil?  Is the soil more or less mineralized?  Are we growing better crops with less synthetic fertilizer or does it take more synthetic fertilizer to grow the same crop?

Soil is vitally important to us.  We use contour strip cropping to protect our soil from erosion.  We use no-till planting on some of our acres.  We use crop rotation to break the pest cycle.  We use legumes to produce nitrogen for the subsequent corn crop.  We use animal manure to mineralize the soil.  We have started mob grazing in our pastures to mimic the soil-building properties of the bison-made tall-grass prairies.

With all of these techniques though, I’m still not happy.  Soil tests don’t show an increase in organic matter.  I want to double the organic matter in our fields.

Last spring I saw some soil erosion in our tilled fields.  I don’t want to see any.

On the other hand, we continue to grow excellent crops with very little synthetic fertilizer.  Animal performance on our pasture is excellent.  Wildlife seems to be as abundant as ever.

I’m excited about changes we are making, but we need to monitor our ecological bottom line closely.

This is an overview of the thought processes that constitute our TBL.  What factors are important for your personal TBL?  Does your company practice Triple Bottom Line accounting?