Peter Callan, Extension Agent, Farm Business Management, Northern District
As a former dairyman and agricultural lender, I have sat on both sides of the table when a producer is faced with low milk prices and/or drought conditions. This has been the story during the spring and summer of 2016 with depressed milk and grain prices. Many producers have been unable to pay their farm’s operating expenses and loan payments on a timely basis. Speaking from experience, this should not deter producers from communicating with their lenders. Agricultural lenders understand that agriculture is a cyclical business. They realize that current milk and grain prices are below the breakeven costs for many producers. It is during these times that communication between lender and producer is most critical.
There are many factors to consider before you start a new farm enterprise. Financial management is an important component in the start-up and decision-making process for beginning farmers. The purpose of this resource is to introduce you to the farm financial system and risk management for beginning farmers. The topics covered in this resource are not all-inclusive, but after reading these papers, you should be prepared to move forward in planning for your farm.
Authors: Kim Morgan, Assistant Professor, Ag and Applied Economics, VA Tech;
Peter Callan, Extension Agent, Farm Business Management, Culpeper County;
Allyssa Mark, Graduate Research Assistant, Ag and Applied Economics, VA Tech;
Kim Niewolny, Associate Professor; Ag, Leadership, and Community Education, VA Tech;
Theresa Nartea, Assistant Professor, Virginia State University;
Kelli Scott, Extension Agent, Montgomery County;
Jim Hilleary, Extension Agent, Loudoun County
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