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The Management Calendar
Farm Business Management Update, December 2007 - January 2008
By Gordon Groover (email@example.com), Extension Economist, Farm Management, Agricultural & Applied Economics, Virginia Tech
Farm business managers should consider putting the following activities on their management calendar for December and January.
- Before the end of the year (calendar tax year filers), follow up on end-of-year tax management strategies recommended by your 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. Hard copies 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 try out the new digital camera and 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 recording or, better yet, place the notes recording 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, 2007, 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. An abbreviated list of credits for agriculture and forestry are listed below.
- Agricultural Best Management Practices Credit
- Conservation Tillage Equipment Credit
- Fertilizer and Pesticide Application Equipment Credit
- Land Preservation Tax Credit
- Riparian Waterway Buffer Credit
- Using 2007 financial and production records develop projected budgets, cash flow, and income statements for 2008. 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 2008. If you are using the Virginia Cooperative Extension “Farm Record Book: Expenses and Receipts,” the back pages provide the forms to summarize all your financial data.
- Depending on the type of farm, begin working on a marketing plan for 2008 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 view the multitude of policies that are available in your area.
- Close out and summarize livestock and/or crop records for 2007, noting problems that must be addressed when making cropping, feeding, and breeding decisions during 2008. Compare 2007 records to previous years looking for strengths and weaknesses.
- Review 2007'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 meetings 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. Think about creating an employee handbook for important information on pesticide safety, farm bio-security, and safe operations of machinery and equipment.
Selective information that might be useful to farmers and their advisors:
Virginia Cooperative Extension