Gordon Groover (email@example.com), Extension Economist, Farm Management, Department of Agricultural and Applied Economics, Virginia Tech
Selective information available that might be useful for fall reading:A must read for all of us involved in agriculture is the current issue of “Choices,” published by the Agricultural and Applied Economics Association and can be found at http://www.choicesmagazine.org/choices-magazine.
o Fall 2014 Articles center around the: The 2014 Farm Bill – An Economic Welfare Disaster or Triumph? Barry K. Goodwin and Vincent H. Smith
- Welfare Effects of PLC, ARC, and SCO. Bruce Babcock
- Conservation, the Farm Bill, and U.S. Agri-Environmental Policy. Erik Lichtenberg
- The Negligible Welfare Effects of the International Food Aid Provisions in the 2014 Farm Bill. Erin C. Lentz and Christopher B. Barrett
- Some Trade Implications of the 2014 Agricultural Act. Colin A. Carter
- Multiple Peril Crop Insurance. Brian Davern Wright
o Another Choices articles that you may find useful is; College Education in the Post-Recession Rural Economy. Alexander Marre
- Economic and Policy Update September newsletter for the Ag Economics Department University of Kentucky (www.ca.uky.edu/agecon/index.php?p=209) has some interesting articles on Grain Profitability, USDA Announces Farm Bill Timeline, and Food Systems.
Farm business managers should consider putting the following activities on their management calendar this fall:
- Time to order your farm record book. As we enter the last quarter of 2014, it is time to order a new copy of the Virginia Cooperative Extension “Farm Record Book: Expenses and Receipts” (Publication 446-017). This 120-page record book provides an organized way of keeping track of annual financial, labor and personnel, and production-related records. It provides forms for many categories of expenses, receipts, labor, and financial summaries to meet the needs of most agriculturally-related businesses using cash accounting methods. Column headings are included for major items with some columns remaining blank for your own headings. Forms are arranged to facilitate transferring totals to income tax forms (Schedule F, tax deprecation, and Form 4797) and to help complete end-of-the-year analysis. Virginia Cooperative Extension “Farm Record Book: Expenses and Receipts” is available from Virginia Cooperative Extension for $12.00. Call your local extension office and request the order form VCE Publication 446-016, print the form at www.ext.vt.edu/pubs/agecon/446-016/446-016.pdf, or contact me at (540) 231-5850.
- Using the last three-quarters of cash flow and financial records, estimate total farm expenses, income, and capital purchases and sales. Then make an appointment with your tax advisor to plan year-end tax management strategies. Be sure to estimate crop insurance payments and any government payments that will appear on this year’s taxes. To take full advantage of year-end tax management strategies, cash-based farmers must make decisions before December 31, 2014. Be sure to review changes to state and federal tax laws with your tax advisor to make sure you plan ahead and do not miss deductions and/or credits.
- Farm business managers should never lose sight of the two objectives of tax management: 1) all decisions, including tax management, should be made to improve the long-term survivability and profitability of the business, and 2) tax management tools are used to level out the year-to-year swings in reported income and subsequent taxes paid. You can use the multitude of tools and techniques written into the tax code for farmers and all businesses to manage income and expenses and to even out the wide swings in annual profits and losses that many farmers experience. Leveling out the income tax liabilities year-to-year will lead to lower total taxes being paid.
- Be sure to keep crop records up-to-date during harvest: include yields, machine times and equipment used, weed problems, and differences in hybrids. If you’re moving up in the information age, consider the fully integrated record keeping systems using yield monitors, GPS, handheld computers, and management software on your office computer. One example of this whole farm system (includes accounting, personnel, and livestock records add-ons) is FarmWorks at www.farmworks.com. For a detailed listing of North American farm related software take a look at the Agricultural Software Listings compiled by the Alberta Ministry of Agriculture and Rural Development http://www.agric.gov.ab.ca/app68/agsoft.
- Be sure to keep livestock records up-to-date during fall sales. At a minimum, include weight, grade, sale prices, and identification numbers of all calves sold and/or purchased.