June, 2009
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Joint Ownership of Machinery
With the ever increasing cost of new and used farm machinery, it may pay for farmers to enter into joint ownership of certain farm machinery. Probably the best type of machinery to have in joint ownership would be combines, sprayers and drills. This type of equipment is usually only used at certain times of the […]
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Senate Report Finds Excessive Speculation in Wheat Markets
A Senate Subcommitee spent the past year investigating the impact of index funds on the wheat market. They concluded that all of this new money flooding into index funds distorted the market. The 247 page report released on June 24, 2009 summarized their findings as follows: 1. Excessive speculation in wheat. Index Traders increased future prices […]
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Be Careful of Organic Demand
For several years, farmers who grew organic crops were able to generate higher returns than non-organic farmers. However, with the current recession, those days may be coming to an end. Organic farmers are required to meet tough standards to have their crops and food products branded as organic. Generally, they are not able to use […]
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Farmland as an Investment
Fortune magazine just had a interesting article on farmland being a great investment, both in today’s environment over the last 5o years. Part of the article was about investing in US farmland and part was about investing in farmland internationally. I think the themes in the article hold true. We will always need to eat and […]
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The Road From Good To Great
As a CPA, I review a lot of financial statements. As part of this review, I try to determine the ratios that separate the business from other businesses in the same industry. Sometimes these ratios are positive and sometimes they are negative. For comparing ratios for farmers, a great site is the Farm […]
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Your Time is Worth Something
As a CPA, I get asked many times by small business owners what their business is worth. As part of calculating that value we usually work up what the net bottom line earnings of the business is. To detemine that, we take the profit and loss of the company and make certain adjustments. Normally, we […]
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For New Farmers (or Old Ones)
The people behind Successful Farming have developed a network for new farmers called Farmers for the Future. They have had at least one conference and Loren Kruse, Editor-in-Chief of Successful Farming recapped the key ideas from the last conference. This recap had many good ideas for new farmers, but I think almost all of the […]
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The Evolution of the U.S. Corn Ethanol Industry
In a recent article in the Regional Economic Development publication of the Federal Reserve of St. Louis, the three primary phases of the U. S. Corn Ethanol industry were documented. These primary phases are: Birth – the events surrounding the oil shocks of the 1970’s from the OPEC price increases Development – The decline in […]
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Farmland Values Drop for the Quarter
The Federal Reserve Bank of Chicago reported that for their district (Illinois, Indiana, Iowa, Michigan and Wisconsin) farm land values dropped 6% from the previous quarter (the largest drop for a quarter since 1985). Also, the year-over-year increase in farmland values was up only 2% for the first quarter of 2009. The drop ranged from […]
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Farm Landlords – What’s my tax rate
If you are a farm landlord, you can be subject to several income tax rates and rules. In general, you will either file your income on Schedule E, Schedule F or Form 4835. Which onewill depend on whether you materially participate in the farm operation – in other words, the extent to which the landlord is […]