Monthly Archives: August 2014

Assessment of Virginia Agritourism Operations

Gustavo Ferreira, Assistant Professor, Agricultural and Applied Economics, Virginia Tech
Chris Lucha, Graduate Student, Agricultural and Applied Economics, Virginia Tech
Martha Walker, Extension Specialist, Community Viability, Virginia Cooperative Extension
Gordon Groover, Extension Economist, Agricultural and Applied Economics, Virginia Tech

Introduction

Agritourism is a value added activity that generates additional net farm income and creates a loyal consume base for branded farm products (Hawkes, 2013). Agritourism also allows for diversification from production agriculture, making it a low-risk mechanism for farmers to cope with the rising cost of agricultural inputs and technology (Tew and Barbieri, 2010). Agritourism is also a good strategy to cope with bad crop years, disasters, and drought (Hawke, 2013). Other economic and non-economic benefits from agritourism include the preservation of agricultural heritage, maximization of productivity and resources, and improvements in the economic situation of a community (Tew and Barbieri, 2012). Continue reading

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Reducing Beef Cow Numbers and Feeding Hay Fewer Days to Improve Profits

Tom Stanley, Extension Agent, Farm Business Management, Rockingham, Augusta, Rockbridge, Highland, and Bath Counties

These are good times in the cattle business with record high prices for calves and feed prices that have moderated following the severe drought in the Corn Belt in 2012. Beef cattle are the leading agricultural product in most Virginia Counties west of the Blue Ridge in terms of land use and gross receipts, thus the favorable cattle market is good news. The three to five year outlook for the cow/calf sector (the predominant type of beef production in Virginia) is very strong. This has many cattlemen contemplating how they might retain their own heifer calves or acquire additional cows to capitalize on this profitable environment. Continue reading

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New Publication from AAEC faculty: Market Test: Farm-Grown Freshwater Prawns Respondents New To Product Would Buy.

The publication authored by Dan Kauffman, Seafood Business Specialist, and Martha Walker, Community Viability Specialist, Virginia Tech was published in the July/August 2014 Global Aquaculture Advocate and can be found at http://www.gaalliance.org/mag/2014/Jul-Aug/download.pdf.

A small test market at a high-end grocery store near Washington, D.C., USA, showed that farm-grown freshwater prawns would sell to high-income consumers who had not previously tried the product. About 83% of first-time buyers said the shrimp, presented less than 24 hours after harvest, tasted good or very good. About 62% of first-time buyers said they would buy again next year. Although both head-on and deheaded shrimp were offered, most customers were reluctant to try the head-on samples.

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The Management Calendar

Gordon Groover, Extension Economist, Farm Management, Department of Agricultural and Applied Economics, Virginia Tech

Listed below are a few items that might be of interest to farm business managers:

Continue reading

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Tax and Financial Management in Profitable Years

Peter Callan, Extension Agent, Farm Business Management, Northern District

 In the first six months of 2014, the prices for feeder and fat cattle and milk have reached record levels. These high prices in conjunction with declining grain prices will likely result in many producers generating significant tax liabilities for 2014. The management and reinvestment of profits generated during times of high prices can impact the long term viability of the business.   Based analysis of the farm’s financial situation, consider paying down short and long term debt as a possible place to spend profits. After addressing the farm’s debt load, plan on accumulating cash reserve equivalent to a minimum of three months’ operating expenses. The next question is where should the profits be spent (e.g., Machinery, retirement accounts, etc.). Continue reading

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Grain Marketing 101: It’s the Fundamentals

Keith Balderson, Extension Agent, Crop & Soil Sciences, Essex County

 I have had several comments lately relative to the grain markets, such as, “the grain markets stink” and others that I can’t repeat in a newsletter. What’s going on? While there are several factors, much of the drop in the grain markets can be explained by supply and demand fundamentals. Simply put, when supply increases relative to demand, stocks increase and prices fall. And even though current prices are well below your cost of production, the market does not care. Continue reading

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