The Management Calendar

Farm Business Management Update, December 2004/January 2005

By Gordon Groover, Extension Economist, Farm Management, Agricultural and Applied Economics, Virginia Tech

Selective information available that might be useful:

• Interested in a variety of information about Virginia agriculture from apples to watermelons? Get a copy of the latest version of the Virginia Agricultural Statistics Bulletin and Resource Directory Number 79. The publication covers year 2003 and is published annually in September. You can download a copy by going to http://www.nass.usda.gov/va/bulletin2004.pdf. Note this 84-page publication may take awhile to download. A hard copy can be obtained by contacting Virginia Agricultural Statistics Service (VASS) via telephone (804) 771-2493 or e-mail: nass-va@nass.va.gov.

• Consider signing up for the USDA- Economic Research Service (ERS) magazine Amber Waves (http://www.ers.usda.gov/Amberwaves/). Articles highlight current economic and policy research conducted by ERS. Some examples of articles that appear in the November 2004 issue are Farmland Retirement's Impact on Rural Growth; U.S. Peanut Sector Adapts to Major Policy Changes; Low-Skill Jobs: A Shrinking Share of the Rural Economy; and Devolution of Farm Programs Could Broaden States' Role in Ag Policy. The on-line version is free and you can sign up to be notified via e-mail when the next issues is posted to the web by entering your e-mail address on the following site: http://www.ers.usda.gov/AmberWaves/About/

• Farmers now can now take care of all activities related to Loan Deficiency Payments (LDP) electronically via the electronic Loan Deficiency Payment Service (eLDP). eLDP is an internet-based service allowing producers to request LDPs online and, in most cases, receive approval and payment by direct deposit within 48 hours. eLDPs are available to eligible producers in all 50 states and are offered as an additional option to producers requesting an LDP. For additional details see your local FSA office or visit the eLDP site at http://www.fsa.usda.gov/egov/eldp_default.htm. Farm business managers should consider putting the following activities on their management calendar for December-January.

• Before the end of the year (calendar tax year fillers) follow up on end-of-year tax management strategies recommended by tax advisor. Additional information can be found in IRS publication 225 Farmer's Tax Guide at http://www.irs.gov/pub/irs-pdf/p225.pdf. Hardcopies of Farmer's Tax Guide can be obtained from your local extension office or many of your public libraries.

• Begin closing out the farm books by collecting information for the farm net worth statement. Around the first of the year when you need to walk off all that holiday food, take a notepad or the camcorder out for a walk around the farm. Record number and approximate value of all the farm assets (cattle, tractors, machinery, buildings, inventories of grains and feedstuffs, chemicals, etc.) that can be organized on the asset side of the balance sheet. Be sure to save the notes or, better yet, place the recoding in a safe location (safety deposit box or fireproof box) for possible insurance claims. Review your end-of-year bank statements or contact your lender for current listings of your liabilities.

• If you are using cash accounting methods for tax purposes (computerized business records or hand kept), you need to make sure your actual records match the deposit and check dates for all claimed income and expenses. A quick check of the records will help address any problems that might arise at tax time.

• Plan to get all tax records summarized and to your tax advisor by February 1, and check with your Virginia Cooperative Extension's farm business management agent on farm-related changes in state and federal taxes. A listing of Virginia tax credits can be found at the following site: http://www.tax.virginia.gov/site.cfm?alias=TaxCredit. Make sure that your tax advisor is aware of these credits.

• Using last year's financial and production records, develop projected budgets, cash flow, and income statements for 2005.

• Depending on the type of farm, begin working on a marketing plan for 2004 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.

• Keep up-to-date on release of economic, crop conditions and estimates, world agricultural situation and outlook, and many other USDA reports by looking at the USDA report calendar at: http://www.usda.gov/news/releases/rptcal/calindex.htm.

• Check on crop insurance policies by visiting the Risk Management Agency website at http://www.rma.usda.gov/ to find an agent and to view the multitude of policies that are available in your area.

• Closeout and summarize livestock and/or crop records for 2004, noting problems that must be addressed when making cropping, feeding, and breeding decisions during 2005. Compare 2004 records to previous years looking for strengths and weakness.

• Review 2004's crop, hay, and livestock records for labor problems, bottlenecks, and down times. Include all employees in spotting and planning to correct labor bottlenecks. Draw up a labor flow chart listing estimated times and identify employees who will be responsible for major tasks.

• Schedule regular meeting with all workers and family members to discuss work activities as you gear up for the spring push. Make sure all workers feel free to suggest ways to improve efficiency.

Visit Virginia Cooperative Extension