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The Management Calendar
Farm Business Management Update, August/September 2006
By Gordon Groover, (firstname.lastname@example.org), Extension Economist, Farm Management, Department of Agricultural and Applied Economics, Virginia Tech
Farm business managers, consider the following sources of information and activities to put on your management calendars for August-September.
The time to make tax management decisions is quickly approaching. Make sure that you have set aside a few days in October to summarize all farm and family financial records and make an appointment now with your accountant to work on end-of-year tax management strategies.
- Want to compare your financials to other farms? Take a look at the FINBIN Farm Financial Database maintained by the Center for Farm Financial Management at the University of Minnesota. The majority of the data is from North Central and Midwestern states (Minnesota, Missouri, Nebraska, North Dakota, Ohio, Utah, and Wisconsin) yet is a good source of financial data to benchmark profitability measures for crop, livestock, and dairy farms. The database has 615 dairy farms for 2005. FINBIB can be found at http://www.finbin.umn.edu/.
- Gain some basic information on the World Trade Organization (WTO) negotiation. Robert L. Thompson at the University of Illinois has a series of frequently asked questions on the WTO that gives the basics of the issues that effect prices farmers receive in Virginia. The FAQ’s can be found at http://www.farmdoc.uiuc.edu/policy/ag_policy_briefs/abp_06-01/apb_06-01.html.
- Thinking about leasing a farm building? Take a look at the Bob Fleming’s and Dave Jones’ publication Leasing Farm Buildings and Livestock Facilities (Ohio State University Extension Fact Sheet FR-0007-02) for examples of what needs to be considered as a landlord or as a tenant. This Ohio State publication can be found at http://ohioline.osu.edu/fr-fact/0007.html.
- Want background information on Biodiesel? A University of Tennessee publication titled Economic Feasibility of Producing Biodiesel in Tennessee, authored by Burton English, Kim Jensen, and Jamey Menard in cooperation with Frazier, Barnes & Associates, LLC., will provide much of the background and layout the basics of what is needed for making biodiesel feasible. The report can be found at http://economics.ag.utk.edu/pubs/business/biodiesel.pdf. NOTE: This larger publication may take a long time to load unless you have high speed internet access.
- Be sure to get your crop records in shape as harvest time approaches. Include yields, machine times, and equipment used (this information will help with next year’s budgeting); identify weed problems and differences in hybrids. In addition to recording information on weeds, etc., think about labor constraints and bottlenecks slowing down tasks during the harvest season. Have employees and family members record problems and successes (maybe give them a cash payment for each problem identified) and when the crunch is over, spend a couple hours reviewing notes on what can be done next year to solve the problems and duplicate the successes. During the post-harvest review make sure the discussion centers on how to resolve problems, not whom to blame.
- Always pay close attention to cash flow needs as you generate cash reserves during fall harvest and get ready for real estate and personal property taxes this winter. Almost all computerized recordkeeping software, e.g., Quicken® or Microsoft Money® and accounting software, e.g. QuickBooks® or FarmWorks, create cash flow reports that assist in managing cash available for debt service, family living, and cash expenses. Compare this year’s cash flow to the budgeted amount and highlight deviations. If you did not develop a budget for this year, compare your inflows and outflow to last year’s August totals. Make sure you have a series of possible plans to address any projected cash short falls. Projected surplus should be added to your retirement program, e.g., IRA’s, 401-K’s, or used to pay down debt.
Virginia Cooperative Extension