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.
Gordon Groover Extension Economist, Department of Agricultural & Applied Economics, Virginia Tech
First, the key assumption behind this article is that the farm business in managed to make a profit. A second assumption is that the environment farm business managers face is not constant, or to quote Heraclitus, (535 BCE), “The only constant is change.” That is, as prices and technology change then management strategies, enterprises, and capital investments must change for the farm to remain profitable. For example, few cow-calf producers harvest and feed corn silage to their beef cow herd as opposed to what was a common practice 40-50 years ago. Corn silage was and is still a high quality feed for ruminants, yet the capital investment to plant, harvest, transport, store, and feed has increased the total costs of corn silage. On a relative costs basis and with the help of round bale technology the cost of making hay was less than corn silage, leading to wholesale Continue reading
Dr. Theresa Nartea (firstname.lastname@example.org), Assistant Professor-Marketing & Agribusiness, Virginia State
Dr. Kimberly L. Morgan (email@example.com), Assistant Professor, Agricultural and Applied Economics, Virginia Tech
Did you know farmers who sell unprocessed foods to retail outlets typically receive just 11.6 cents of each dollar that the buyer pays for the item? The remaining amount is allocated to industry groups such as food processors, packaging and transportation, retail trade, food services, energy, finance and insurance and legal services (Fig. 1). These industry groups are important participants in the food supply chain, and allow individual farmers and consumers to focus efficient use of their time and resources on their careers. Continue reading
Kimberly L. Morgan, Extension Economist, Department of Agricultural and Applied Economics, Virginia Tech
The Kohl Centre Foundation serves a dual mission to: 1), provide business, financial, marketing and management advice, using the resources of VT faculty and students, in the entrepreneurial spirit of Dr. Dave Kohl; and 2), facilitate action-oriented, immersive professional development project opportunities for Kohl Centre teams in response to identified clientele needs in agribusiness and other sectors of the economy. Our primary goal is to develop and implement a branded beyond-the-classroom program that provides undergraduate student experiences in applying the concepts of firm-level strategic decision-making based on economic analyses. Continue reading
By Gordon Groover Extension Economist, Department of Agricultural & Applied Economics, Virginia Tech
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 www.irs.gov/pub/irs-pdf/p225.pdf. Hard copies of Farmer’s Tax Guide can be obtained from many of your public libraries. Continue reading
Kimberly L. Morgan (firstname.lastname@example.org), Extension Economist, Department of Agricultural and Applied Economics, Virginia Tech
As reported in the USDA’s 2007 Census of Agriculture, a total of 12,549 U.S. farms indicated they had marketing products through Community Supported Agriculture (CSA) arrangements, of which 334 were located in Virginia. As of today, there are 176 Virginian CSA farm listings on the Local Harvest (www.localharvest.org ) portal, and another 42 listed on the Eat Well Guide (www.eatwellguide.org) site. As one of many forms of direct-to-consumer marketing opportunities available to Virginia’s producers, the CSA model allows growers and buyers to share in the management of risks inherent to agricultural production. In general, CSA contracts are developed by the grower that outline the product varieties, volumes and formats s/he intends to plant and process, expected availability, pickup days and Continue reading