The Management Calendar

Gordon Groover Extension Economist, Department of Agricultural & Applied Economics, Virginia Tech

Selective information that might be useful to farmers and their advisers:

Farm business managers should consider putting the following activities on their management calendar for December and January.

  • Before the end of the year (calendar tax year filers), follow up on end-of-year tax management strategies recommended by your tax advisor. Additional information can be found in IRS publication 225 Farmer’s Tax Guide at irs.gov/pub/irs-pdf/p225.pdf. Hard copies of Farmer’s Tax Guide can be obtained from many of your public libraries.
  • Begin closing out the farm books by collecting information for the farm net worth statement. Around the first of the year when you need to walk off all that holiday food, take a notepad or try out any or all of the new technology as you walk around the farm. Record the number and approximate value of all farm assets (cattle, tractors, machinery, buildings, inventories of grains and feedstuffs, chemicals, fuel, etc.) that can be organized on the asset side of the balance sheet. Be sure to place the notes or recording in a safe location (safety deposit box or fireproof box) for possible insurance claims, IRS audits, or background for financial statements. Review your end-of-year bank statements or contact your lender for current listings of all personal and business liabilities. You now have all the information you need to complete a market value net worth statement.
  • If you are using cash accounting methods for tax purposes (computerized business records or hand-kept), you need to make sure your actual records match the deposits and check dates for all claimed income and expenses. A quick check of the records will help address any problems that might arise at tax time.
  • Plan to get all tax records summarized and to your tax advisor by February 1, 2016. Also take a look at the listing of Virginia tax credits that may apply to your business this year at: http://www.tax.virginia.gov/site.cfm?alias=TaxCredit. Make sure your tax advisor is aware of these credits. An abbreviated list of credits for agriculture and forestry are listed below.
    • Agricultural Best Management Practices Credit
    • Biodiesel Fuels Credit
    • Credit for Taxes Paid to Another State
    • Tillage Equipment Credit
    • Farm Wineries and Vineyards Tax Credit
    • Fertilizer & Pesticide Application Equipment Credit
    • Preservation Credit Provisions for 2007 & After
    • Waterway Buffer Credit
  • Use 2015 financial and production records to develop projected budgets, cash flow, and income statements for 2016. If you are using Quicken or QuickBooks, use the automated feature to create a budget based on last year as a starting place to create a detailed budget to reflect your expected costs and returns for 2016. If you are using the Virginia Cooperative Extension “Farm Record Book: Expenses and Receipts,” the back pages provide forms to summarize all your financial data.
  • Depending on the type of farm, begin working on a marketing plan for 2016 by collecting information on prices and world market situations. Keep up-to-date on the release of economic, crop conditions and estimates, world agricultural situation and outlook, and many other USDA reports by looking at the USDA report calendar at http://www.usda.gov/wps/portal/usda/usdahome?navid=AGENCY_REPORTS.
  • Check on crop insurance policies by visiting the Risk Management Agency website at http://www.rma.usda.gov/ to find an agent and view the multitude of policies (crops, livestock, forages, vegetables nursery, clams, and more) that are available in your area.
  • Close out and summarize livestock and/or crop records for 2015, noting problems that must be addressed when making cropping, feeding, and breeding decisions during 2016. Compare 2015 records to previous years looking for strengths and weaknesses.
  • Review 2015’s crop, hay, and livestock records for labor problems, bottlenecks, and own times. Include all employees in spotting and planning to correct labor bottlenecks. Draw up a labor flow chart listing estimated times and identify employees who will be responsible for major tasks. This is very important if you have expanded acreage, livestock numbers, and/or replaced an employee or changed the number of employees.
  • Plan to start the New Year by scheduling regular meetings with all workers and family members to discuss work activities as you gear up for the spring push. Make sure all workers feel free to suggest ways to improve efficiency. Think about creating an employee handbook for important information on pesticide safety, farm bio-security, and safe operations of machinery and equipment.
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