Farm Operations
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Farm Income 4th On List of Reasons to Purchase Farmland
The Kansas City Federal Reserve puts out a quarterly survey on credit conditions in their region and the latest survey for the second quarter had some interesting trends. Due to lower wheat prices and the continuing high feed costs, their farmers actually had lower-income for the quarter. However, farmland prices continued their upward trend, up […]
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Are Land Value Increases Flattening Out?
The Federal Reserve Bank of Chicago produces a quarterly newsletter on farmland values for their district which comprises, Illinois, Iowa, Indiana, Michigan and Wisconsin. Their latest report seems to indicate a flattening of the rapid farmland price increases we have seen over the last few years. although prices were up 17% on an annual basis, […]
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Health Care Exchanges are Coming (whether you are ready or not)
My friend Dick Wittman farms in Northern Idaho and also does part-time consulting for farmers and their families. I just came across a blog post that he published last week in the Idaho Business Review that I thought gives a very fair view of what the health care exchanges mean to his farm and family. […]
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Installment Sale Update
We have gotten some feedback to our installment sale post of yesterday and this post will clarify some of those questions and feedback. First, if the land being sold is an active part of a schedule F farm business, then it should not be subject to the 3.8% net investment income tax as shown in my […]
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The Power of Installment Sales
We had a reader ask the following question: “I plan to sell some land this year. Will my tax liability be less if I take payments from the buyer over several years?” Before answering this question, lets review how an installment sale works. Instead of owing all of the tax in the year of sale, […]
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Midwest Crop Tour – Day 3
Today, we left Bloomington, Illinois bright and early (other than having to jump-start the Ag Day Pickup) and headed due north for about an hour before starting the route. We then traveled north to slightly above DeKalb and then headed due west to Savanna, Illinois right on the Mississippi River, where we crossed into Iowa. […]
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First Day of the Midwest Crop Tour
We left Columbus, Ohio this morning at 7 am and headed west. It was tough going the first couple of hours with the suburbs and humidity cloud to get any samples in, but we finally got some samples. Our lowest of the day was 53 bushels in Drake County but as usual on the crop […]
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Is Peak Corn Over (For Now)?
A few years ago, the term Peak Oil was in the media. This term represented the notion that the production of oil worldwide had peaked and we would be showing lower and lower production levels each year. With the discovery of fracking of shale oil formations, this term is not used much lately. My question […]
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Hedge Accounting Update
The last presentation at FFSC was done by Todd Doehring of Centrec and myself on the proposed guidelines for hedge accounting. For tax purposes, a valid hedge is usually accounted for on a strictly realized basis, i.e., the futures or options on futures is not recognized in income until the hedge is closed out. For […]
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Evaluating the New Century Go-Go Farmer
Bob Craven, head of the Center of Farm Financial Management (FINPACK) for the University of Minnesota gave a discussion on evaluating the new century Go-Go farmer. The Median income for 2012 for Minnesota farmers was a slightly less than $200 thousand, while the top 20% were almost $700 thousand of net income. Top 20% characteristics: […]