Gordon Groover, Extension Economist, Farm Management, Department of Agricultural and Applied Economics, Virginia Tech
Listed below are the items to consider adding to your farm business manager’s reading list and calendar for the next two months.
• Income taxes and related items:
- Farmer that do not pay estimated taxes, your 2013 return and taxes are due March 3, 2014. For Farmers that pay estimated taxes (using Form 1040-ES). You have until April 15 to file your 2013 income tax return (Form 1040).
- Virginia income tax returns must be postmarked by May 1, 2014.
- Need to find out more information about federal taxes relating to your farm business? The Farmers Tax Guide IRS Publication 225 is online and can be found at: http://www.irs.gov/file_source/pub/irs-pdf/p225.pdf
- The standard mileage rates for the use of a car (also vans, pickups or panel trucks)
- For 2013 the rates are
- 56.5 cents per mile for business miles driven.
- 24 cents per mile driven for medical or moving purposes.
- 14 cents per mile driven in service of charitable organizations.
- Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) rates are:
- 56 cents per mile for business miles driven
- 23.5 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
- Decide how much you’ll contribute to an IRA for the 2013 tax year and set goals for 2014. If you use a certified financial planner (CFP), consider his/her usefulness in helping plan for retirement, college, insurance coverage, and other items. Visit the web site for the CFP organization to get information on services and standards required for planners. You can search for a CFP in your area at http://www.cfp.net/.
• 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. The First Quarter 2014 Theme is Developing Local Food Systems in the South and features 2 of Virginia’s own Kim Morgan and Eric Bendfeldt. Articles are:
1. Overview: Developing Local Food Systems in the South. H.L. Goodwin Jr.
2. Risk Management Issues for Small Farms within Local Food Systems. Kenesha Reynolds-Allie, Deacue Fields, and Ron Rainey
3. Response of Land Grant Universities to the Increase in Consumer Demand for Local Foods in the South. Marco A. Palma, Kim Morgan, Tim Woods, and Sean McCoy
4. Local Food Systems Markets and Supply Chains. Timothy Woods, Margarita Velandia, Rodney Holcomb, Rebecca Dunning and Eric Bendfeldt.
5. Food Safety Policies and Implications for Local Food Systems. Rodney B. Holcomb, Marco A. Palma, and Margarita M. Velandia.
6. Local Food Systems in the South: A Call for a Collaborative Approach to Assessment. R. David Lamie, Rebecca Dunning, Eric Bendfeldt, Joanna Massey Lelekacs, Margarita Velandia and Lee Meyer.
• Two additional articles from Choices (www.choicesmagazine.org/choices-magazine) that you may find useful are:
1. The Base vs. Planted Acre Issue: Perspectives, Trade-offs, and Questions by Carl Zulauf.
2. What Have We Learned about the Cost and Effectiveness of the Expanded Food and Nutrition Education Program? by Ranju Baral, George C. Davis, Elena Serrano, Wen You, Stephanie Blake.
Farm business managers should consider putting the following activities on their management calendar this winter.
• Get your farm’s 2013 financial records closed out: Post all income and expenses paid during 2013 in your record book or accounting software. You still have time to conduct an end-of-the-year inventory of all the farm assets and liabilities to provide data for the farm’s net worth statement.
• Need another copy of the Farm Record Book: Annual Expenses and Receipts, Virginia Cooperative Extension publication 446-017? Then print the order form at www.ext.vt.edu/pubs/agecon/446-016/446-016.pdf. The price is $12.00.
• Use your 2013 records to develop an itemized list of income and expenses. The categories found on the IRS Schedule F can serve as a starting point for estimating net income for the farm business. Compare your results to previous years, looking for both weaknesses and strengths.
• Seek assistance from Virginia Cooperative Extension’s farm business management agents, lenders, or your accountant to develop a detailed financial analysis of your farm business, including the major 21 financial ratios. These ratios and a detailed financial analysis can be generated by using the Center for Farm Financial Management (www.cffm.umn.edu/) program FINAN (www.cffm.umn.edu/FINPACK/default.aspx). FINAN and other computer programs can be purchased annually for approximately $149 or the whole analysis and planning package of three computer programs for $395. Details are at www.cffm.umn.edu/FINPACK/default.aspx .
• Using last year’s financial and production records, finalize your balance sheet, cash flow and income statements for 2013 and your projected budget for 2014. If you use Quicken® or QuickBooks® make use of the budget section to create a 2014 budget based on 2013 records. All 2013 budget entries can be modified to reflect anticipated changes in 2014.
• Take your 2013 financial records and 2014 projected whole-farm budgets and cash flow statements to your lender to discuss line-of-credit needs and plans for 2014. Using the FINPACK (www.cffm.umn.edu/FINPACK/default.aspx) programs or your Quicken® or QuickBooks® can help with this process.
• Grain and livestock producers should have their marketing strategies/plans in place for 2014 marketing year. Be sure to check with your local Farm Service Agency for changes in government programs and signup deadlines.
• The end of February and March 15 are the cutoff dates for signing up for most crop insurance policies in Virginia and dates depend on insurance product and where you live. Details on crop insurance and closing dates are best discussed with a local crop insurance agent. You can locate a local agent by visiting the following web site http://www3.rma.usda.gov/apps/agents/.
• Interested in finding a listing of all types of agricultural software? The Alberta Department of Agriculture and Rural Development has the most comprehensive listing of computer software designed for farm and agribusiness on the web http://www.agric.gov.ab.ca/app68/agsoft.