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The Management Calendar
Farm Business Management Update, October-November 2002
By Gordon Groover
The continuing drought and changes to farm programs are two big items that will impact Virginia's farmers for a number of years. To keep up-to-date on changes to farm programs, and drought assistance programs, visit your local FSA office or frequently check the FSA web site (http://www.fsa.usda.gov/) for new information. You can locate contact information (phone numbers, address, and name and e-mail for the County Director) for your local FSA office by selecting your county from the following map http://oip.usda.gov/scripts/ndisapi.dll/oip_agency/index?state=va&agency=fsa
Selective information you should be aware is as follows:
- Livestock Compensation Program for farmers suffering from drought in 2001 and/or 2002 season. The Livestock Compensation Program provides assistance for cattle, sheep, and buffalo producers in counties that have received primary disaster designation due to drought in 2001 and/or 2002. In addition, producers in counties which have disaster designation requests pending as of September 19, 2002 and which are subsequently approved will also be eligible to participate in the program. Sign up will begin Oct. 1 with payments made soon thereafter.
- Dairy producers should sign-up for the Milk Income Loss Contract (MILC) program. Check with your local FSA office for details. The Cornell Program on Dairy Markets and Policy (http://dairy.cornell.edu/) lists estimates of the MILC program payments for 9 months into the future based on Chicago Mercantile Exchange settlement prices for class III and class IV milk. These projected prices may help medium to large dairy producers choose the starting month to receive their MILC payments.
- Links to the daily county LDP rates and critical farm program dates are available at the FSA web site http://www.fsa.usda.gov/.
Farm business managers should consider putting the following activities on their management calendar for October-November.
- Summarize the third quarter cash flow and financial records, compare them to your projections, and watch for problems. Actual inflows or outflows that differ from your projections may not signal a problem, but understanding why there are differences helps you understand changes in the farm business. Drought conditions will lower many farmers net income for 2002. Begin brain storming and looking for alternatives to reduce costs and/or increasing income.
- Using the last three quarters of cash flow and financial records; estimate total farm expenses; income; and capital purchases and sales, and 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 fully take advantage of year-end tax management strategies, farmers must make decisions before December 31, 2002. Be sure to review changes to state and federal tax laws with your tax advisor to make sure you have not missed deductions and/or credits.
- Be sure to keep crop records up-to-date during harvest, include yields, machine times and equipment used, identify weed problems, and differences in hybrids.
- 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.
Other useful information to farmers and professionals.
- Software: Beef cattle producers interested in selecting a software program to help in keeping production records should read the Oklahoma Cooperative Extension Service publication Cow-Calf Production Record Software. The full report can be obtained at http://www.ansi.okstate.edu/exten/beef/WCR-3279/WCR-3279.pdf
- Virginia Statistics: Virginia Agricultural Statistics Service has published their annual Virginia Agricultural Statistics Bulletin which is available at http://www.nass.usda.gov/va/bulletin2002.pdf. This publication summarizes a vast array of agricultural production and economic information for 2001.
Virginia Cooperative Extension