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The Management Calendar
Farm Business Management Update, April/May 2004
By Gordon Groover
I was on the Virginia Eastern Shore this week, wheat fields were green and growing and farmers had started to break ground. As I write this report in Blacksburg it's spitting snow, the sky is gray, and the temperatures are in the 30's. What happened to spring? It may take a few more weeks and some sunshine before field work gets under way up here in the mountains. But spring is coming.
Listed below are the items that need to be included on the farm business managers' calendar for spring of 2004.
- Cut fertilizer costs by using poultry litter - Farmers outside of Augusta, Page, Rockingham or Shenandoah Counties should investigate participation in the 2004 pilot project to develop self-sustaining poultry litter markets. If farmers meet all requirements, cost-share is available to move litter out of the major poultry producing counties. For additional information on the program and requirements for cost share, contact your local soil and water conservation district, Virginia Cooperative Extension office or DCR regional office for an application. A brochure can be found at http://www.dcr.state.va.us/sw/docs/poultry.pdf . Funding will be allocated for complete and approved applications on a first-come, first-served basis. For more information call Scott Ambler at (804) 786-2235.
- BSE had increased the interest in food safety and traceability of all food stuffs. The Economic Research Service of USDA release a publication that helps explains the current baseline within the food industry and looks to public and private investments that will lead to strengthening of the traceability of all food stuff. Agricultural Economic Report No. (AER830) "Traceability in the U.S. Food Supply: Economic Theory and Industry Studies" can be found at http://www.ers.usda.gov/Publications/AER830/.
- Consider getting a copy of "Building a Sustainable Business: A Guide to Developing a Business Plan for Farms and Rural Businesses" for your library. This publication is a useful tool for all new farms and small business. The order form and a detailed description can be found at http://www.sare.org/htdocs/pubs/. The 280-page publication follows farmers Dave and Florence Minar through a major transition on their Minnesota dairy farm and includes blank worksheets and step-by-step strategies for developing a detailed, lender-ready business plan to take advantage of new opportunities. Costs $14 plus $3.95 shipping.
- Need to keep abreast of agricultural policy and implications to the Southern Region? Bookmark the Agricultural Policy Analysis Center (APAC) at the University of Tennessee at http://www.agpolicy.org/news.html. APAC publishes a number of articles every month.
- Review first quarter livestock records and compare them to last year's; look for problems and successes.
- Make sure your Virginia state income taxes are mailed in before May 1.
- Follow-up with your lender to review and update your line-of-credit needs.
- This year we have higher prices for inputs and maybe higher cash prices, but do you know how your cash flow is doing? Keeping track of quarterly cash flows is critical and comparing them to the projected or historical cash flows can assist in identifying potential problems. Actual inflows or outflows that differ from their projections may not signal a problem, but understanding why there are differences will help you understand changes in the farm business. If you need to forecast cash flow for your farm business, take a look at "The Rolling Cash flow Forecaster" it simplifies the job of projecting cash flows. Our Canadian colleagues say, "this tool is especially useful when cash flow is tight: usually during business start-ups, reorganizations or periods of financial uncertainty." Cash flow management won't ensure that your business is profitable, but it may buy you enough time to make the changes needed for long-term viability. The Microsoft Excel spreadsheet can be downloaded free from the Alberta Ministry of Agriculture, Food and Rural Development at http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/bmi2609.
- An excellent source of information on Concentrated Animal Feeding Operation (CAFO) rules can be found at the web site for the Livestock and Poultry Environmental Stewardship Team. The team has developed 24 fact sheets that answer the most commonly asked questions about CAFO rules and policies. To read the fact sheets online, or print off a copy for future reference, go to http://www.lpes.org/CAFO.html. The PDF version is free; printed copies can be obtained for a fee.
- New from USDA Economic Research Service is a clickable map "Farm And Farm-Related Employment" that estimates lists of farm and farm-related employment by State, farm production region, and farm resource region. Provided are data that show the importance of agriculture for metro and non-metro regions in each state by farm and farm-related industries. In Virginia, 1.4 percent of the workforce (60,696) in employed farm production employment, and 14.4 percent of the workforce or 626,134 workers are employed in farm and farm-related employment. See the following web site for details for all states http://www.ers.usda.gov/Data/FarmandRelatedEmployment/
- New from USDA Economic Research Service is a clickable map listing "State Fact Sheets." The state fact sheets contain frequently requested data for each state and for the total United States. These include current data on population, per-capita income, earnings per job, poverty rates, employment, unemployment, farm and farm-related jobs, farm characteristics, farm financial characteristics, top agricultural commodities, top export commodities, and the top counties in agricultural sales. See http://www.ers.usda.gov/StateFacts/ for details.
- New from USDA Economic Research Service is a look at Farmer Bankruptcies and Farm Exits in the US from 1899-2002. The report finds that bankruptcy has played only a small role in the overall decline in farm numbers over the last 70 years. Most of the decline in farm numbers occurred between the 1940s and 1970s, when bankruptcy filings were at relatively low levels. Farm numbers have even risen when bankruptcies have been relatively high or rising, such as during the early 1930s or early 1990s. See http://www.ers.usda.gov/publications/AIB788/ for details.
- Prepare crop record keeping system for a new year. If you do not have a crop record keeping system, consider purchasing the Doane's hand-kept crop and machinery notebook, "Field and Equipment Record Book." This notebook provides an inexpensive way of getting started. It can be ordered via the Internet at http://www.doane.com/bookshelf/shop.php or by calling (800) 535-2342, Extension 220. The price is less than $20.00. For a selection of computerized crop record keeping software take a look at the Agricultural Software Directory from Alberta Agricultural Food and Rural Development site: http://www.agric.gov.ab.ca/agdex/agsoft/index.html.
- Update your marketing plan by collecting information on prices and world market situations. Be sure to check with your local Farm Service Agency for changes in government programs and signup deadlines. Review USDA and other crop and price forecasts. The release dates of most USDA reports are posted on the USDA Agency Reports Schedule Calendar and can be viewed at http://www.usda.gov/news/releases/rptcal/may2002.htm.
- Soybeans "could get 12-dollar ugly real fast" was mentions in March 16 Delta Farm Press article. Wow that will put a new wrinkle in plans for both crop and livestock producers. Take a look at Wayne Purcell's newsletter on locking in prices for the 2005 and 2006 years. His March 2, 2004 newsletter describes the methods to lock in long-term prices. The newsletter can be found at http://www.ext.vt.edu/news/periodicals/purcell/2004wp/09.html. VCE soybean budgets with $8.00 beans show an estimated $100 net returns per acre ‚ might pay to read the Wayne Purcell's newsletter and update your marketing plan.
- Farmdoc at the University of Illinois has an online US Corn Balance Sheet and Price Tool to help educate individuals on supply and demand relationships using historical relationships. The interactive sheet presents 1) a completed balance sheet for the past year showing acreage, yield, supply, and consumption by category, year ending stocks, and the marketing year average price received by farmers and (2) the balance sheet estimates for the current and the next marketing year. This tool may be accessed directly at http://www.farmdoc.uiuc.edu/marketing/corn_balance_tool/corn_balance.asp
Now is the time to put your plans into action and enjoy spring after it warms up.
Virginia Cooperative Extension