Gordon Groover (groover@vt.edu), Extension Economist, Farm Management, Department of Agricultural and Applied Economics, Virginia Tech
Anyone interested in understanding of contact agriculture should reader the current issue of “Choices,” published by the Agricultural and Applied Economics Association and can be found at http://www.choicesmagazine.org/.
- Current theme is focused on Agricultural Contracts the 5 articles listed below can be found at http://www.choicesmagazine.org/choices-magazine/theme-articles/current-issues-in-agricultural-contracts
- Current Issues in Agricultural Contracts, Michael Vassalos
- Trends in Agricultural Contracts, James M. MacDonald
- Economics of Agricultural Contract Grower Protection Legislation, Steven Y. Wu and James MacDonald
- Risk and the Use of Contracts by Vegetable Growers, Jack Schieffer and Michael Vassalos
- Contract Farming: What’s In It for Smallholder Farmers in Developing Countries? Marc F. Bellemare
- Another Choices article of interest to the agricultural sector is Farm Program Elections, Budget Costs, and the WTO, Patrick Westhoff, Scott Gerlt, and Joseph Glauber. http://www.choicesmagazine.org/choices-magazine/submitted-articles/farm-program-elections-budget-costs-and-the-wto
Farm business managers should consider putting the following activities on their management calendar this fall:
- 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, 2015. 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.