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The Management Calendar
Farm Business Management Update, December 2005/January 2006
By Gordon Groover (email@example.com), Extension Economist, Farm Management, Department of Agricultural & Applied Economics, Virginia Tech
Selective information available that might be useful
- Many Extension agents get this question and many folks wonder, "What's the value of US agricultural to the US?" The current issue of "Agricultural Income and Finance Outlook" published by the folks at Economic Research Service in USDA has an article that will help shed some light on this question. Look for the article title "Value Added to the U.S. Economy by America's Agricultural Sector" at http://usda.mannlib.cornell.edu/reports/erssor/economics/ais-bb/2005/ais83.pdf
- Interested in a variety of information about Virginia agriculture from apples to watermelons? Get a copy of the Virginia Agricultural Statistics Bulletin and Resource Directory Number 80. The publication covers year 2004 and is published annually in September. You can download a copy by going to http://www.nass.usda.gov/va/pg504.htm. A hard copy can be obtained by contacting Virginia Agricultural Statistics Service (VASS) via telephone (804) 771-2493 or e-mail firstname.lastname@example.org.
- Learning new skill is not just for the employee anymore - employers can improve their skills in management. Take a look at "Consider Becoming a Better Employer" by Chris Zoller, Extension Educator, ANR/CD, Tuscarawas County, Ohio. The article is posted at http://ohioagmanager.osu.edu/news/index.php#3.
- Want to get an estimate of farmers' family living costs? Take a look at the article by Suzy Martin and Jennifer Rogers in the October 2005 issues of the "Economic and Policy Update" titled "Farm Family Living Costs." The newsletter is published by the Agecon Department at the University of Kentucky and can be found at http://www.uky.edu/Ag/AgEcon/pubs/bluesheet/october.pdf
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 filers) 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 the 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 for all personal and business 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, 2006, 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 2005 financial and production records, develop projected budgets, cash flow, and income statements for 2006. If you are using Quicken or QuickBooks use the automated feature to create a budget based on last year as a starting place to create a detailed budget to reflect your expected costs and returns for 2006.
- Depending on the type of farm, begin working on a marketing plan for 2006 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. Contact information for your local FSA office can be found at http://offices.sc.egov.usda.gov/locator/app?state=us&agency=fsa
- 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 2005, noting problems that must be addressed when making cropping, feeding, and breeding decisions during 2006. Compare 2005 records to previous years looking for strengths and weakness.
- Review 2005'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.
Virginia Cooperative Extension