Farm Operations
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The Perils of Benchmarking
The next two sessions at FFSC dealt with the perils of benchmarking. As farmers try to benchmark themselves against other comparable farm operations, it becomes readily apparent that many perils or issues can arise. In many cases farmers (since they are human) really like using benchmarking when they are above average. In they are below […]
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Capital Gains Questions on Selling Farmland
We had a reader ask the following series of questions. We are going to break them down into a question and answer format. Q – Regarding capital gain rates and selling farmland – Am I correct to use the difference between a stepped up ( appraisal / time of death ) value of inherited farmland and […]
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Top Farmer Day 1 – Session 2
My next recap is in regards to the “Crop Markets in Transition” presented by Darrel Good of the University of Illinois. Darrel noted that there is the potential for a 14 billion bushel crop with added production in South America, it may be tough to meet the export estimates by USDA. Ethanol consumption should pick […]
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Top Farmer – Day 2, Session 1
Since I have my laptop with me today, I am going to try to do a separate post on each session for today’s Top Farmer Conference. Yesterday’s sessions were very informative and I hope today is even better. First session today is an update on Ethanol and Bio-Diesel production presented Scott Irwin of the University […]
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CRP in an S corporation?
We had a reader ask the following question in response to our posts on CRP payments being subject to SE tax: “What about CRP income that is earned by an S corp which only rents out farmland and also collects CRP income. Will that CRP income be subject to SE tax while the land rent […]
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Corn & Bean Prices Are Approaching the Spring Price
As I type this post, December corn futures are currently trading at $5.59 and November beans futures are at $12.84. Both of these prices are within a few pennies of the spring price that was set based on the average February prices of these futures contracts ($5.65 and $12.87, respectively). It is interesting that after […]
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Full Season vs. Early Season Corn
I spent most of today with Chris Barron at his farm (we thought we would be planting but with a temperature holding steady at 37 degrees not much planting is going on). Part of the time Chris and I were discussing the effect of planting full season corn in a late planting year and the […]
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How Does Delayed Planting Affect Your Margins?
My friend Chris Barron and I were discussing how delayed planting of corn this spring may affect farmer’s net profit margins. A reduction in yield and/or price can have a dramatic affect on overall profit margins since most of a farmer’s costs are what we call fixed. Cash rent, the seed that is in ground, the […]
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Deferred Payment Contracts (Again)
We seem to get several questions during tax season regarding how deferred payment contracts work for tax purposes. I thought we would do another post on the mechanics and show some examples. With a deferred payment contract, the farmer has sold their grain, but elected to defer receipt of the payment until a future date, […]
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Don’t Forget Farm Income Averaging
Just a reminder if your income is dramatically higher this year, remember to consider using farm income averaging. Even if it does not reduce your income tax for the year, if may help you reduce your income tax in 2013 or beyond. In brief, farm income averaging allows you to elect to spread a certain […]