There is an old saying that when politics gets involved, farming can suffer.  One of the prime examples of this was issue of allowing Mexican truckers to bring products into the US by truck which was allowed for several years.  However, politics got involved a few years ago and the US stopped this and Mexico retaliated by imposing tariffs of up to 45% on certain Ag products exported by US farmers. 

These tariffs taxed about $2.4 billion of products and were especially burdensome to the fruit growers in the US.

Now the good news.  As of Wednesday, July 6, 2011, both the US and Mexico have agreed to allow the truckers back into the US.  As a result of this signing, Mexico will cut in half their tariffs within 10 days and eliminate the remainder once full cross-border traffic begins.

This is good news for our farmers.

Just a reminder that you can now follow me on Twitter.  I had set up my account last year, but with all of the changes with my accounting firm, I had not had a chance to take advantage of using Twitter for quick posts through out the day.  I will be using Twitter to update on any quick ideas, thoughts, etc. that I think are applicable to farmers and ag as they happen in real time.  There are many times when I have a thought that is not quite perfect for a post, but should be communicated and I will use Twitter for this.

Let me know how you like it and any changes that you think would work.

Just a personal note to let you know that a friend and I are riding our motorcycles to Los Angeles from Yakima for my second’s son college education.  Two down and two to go.

I will be gone from today until next Tuesday and may not do any postings between now and then.

Being in the middle of the busiest tax season that I can ever remember, we took some time out last week to attend a luncheon for the local economic development group.  The keynote speaker was one of the co-founders of the game Cranium.  His first story was about being in a taxi ride in Dallas a couple of years ago and how he got into a conversation with the cab driver.  They exchanged stories about their lives and the cab driver’s last works were “It is not how many times you get knocked down, it is how many times you get up.”

I think this saying applies to farming and life in general.  As we go along right now, most farmers are enjoying some of the best prices they have ever had, however, we must remember that sometime in the future, the farmer will get knocked down.  The important thing is to remember to get up and get up fast.

On a personal note, this last two weeks and probably the next week or so has been the busiest tax season I have ever had and it has reduced the amount of posts that I normally make.  Just want to let our readers know that once it dies down a little bit, I will get back to a more normal posting pattern.

Just wanted to wish all of our readers a Merry Christmas and we at Farm CPA Today.com appreciate your readership throughout 2010.  Just last week, we had our largest number of unique visitors for one day and we just want to thank you for your support.

Again, Merry Christmas and have a very good 2011.

I will be traveling on the business the next two days, so I wanted to make sure to wish Happy Thanksgiving to all of our readers.

This holiday was my favorite as a child growing up since we went to my grandparents for Thanksgiving and some years we would have over 45 relatives there. 

Again, Happy Thanksgiving!

I flew to Kansas City on Thursday of last week.  On Friday, I spent about five hours in the John Deere 9660 combining soybeans.  The field had several terraces and many ditches, so the combining was not simply going back and forth across the field.  I filled up two semi loads with beans and had a great time.  This is my idea of a great vacation.

On Saturday (since the other beans were not ripe yet), I spent the whole day traveling.  I went to Wichita Falls, then up to Salina and on the way back to Kansas City, I spent a couple of hours touring the Flint Hills in the Manhattan south region.  If you have never toured this area of the Country, I highly recommend it.  This is some of the most interesting hill region in the US.

I also saw a lot of milo being harvested and the weather was outstanding (70 degrees and sunny).  The only negative for the region is that Kansas, Kansas State and Missouri all lost their football games on that day.

In August of this year, The Minneapolis Federal Reserve reported that the agricultural credit conditions in the second quarter were somewhat pessimistic compared to the previous quarters.  The Ninth district comprises the states of Montana, North and South Dakota, Minnesota and parts of Wisconsin and Michigan.

Although the credit conditions for this district were slightly negative, the positive trends for farmers is that they are reducing their capital investment and household spending.  During the period, only 11 percent reported higher household spending and 14 percent reported spending more on capital goods.

Demand for loans and repayment levels were fairly constant.

Cash rents continue to be strong.  Average cash rents for irrigated and non-irrigated farmland were up from a year ago by about 6 and 10 percent, respectively.  However, cash rents for range land was down about 3%.  Values for farmland were up by about 6-8% for the year earlier periods.  “Bankers are starting to get concerned over how much longer these rents and prices can stay this high”, a Minnesota lender reported.

According to the report, the survey does not paint a rosy picture for the third quarter.  However, with the dramatic increases in prices during that quarter, I am betting that the actual third quarter report will be much rosier than the expectations.

I know some farmers probably feel that CPA do not have any humor, but I think we enjoy jokes about our profession a lot.   So, in that spirit, I am listing some humor below.

Trick or Treat

The doorbell rings, and a farmer answers it.  Here stands this plain, but well dressed kid, saying “Trick or treat?”.

The mans asks what the kid is dressed up as for Halloween.

The kid replies, “I’m an IRS agent.”

Then the kid takes 35% of the farmer’s candy, leaves and doesn’t say thank you.

Ashes to Taxes

A farmer on his deathbed called his frient and said “I want you to promise me that when I die you will have my remains cremated.”

His friend asked, “And what do you want me to do with your ashes?”

The man said “Just put them in an envelope and mail them to the IRS.  Write on the envelope ‘Now you have everything.’”

Income Tax Law

All the Congress, all the CPAs, all the tax lawyers, and a convention of wizards can not tell for sure what the income tax law says.

The Oldest Profession

A surgeon, CPA and a lawyer were arguing about which of them was practicing the oldest profession.

The surgeon said “God created Eve from a rib from Adam.  Obvisiouly, God is a surgeon, so medicine is the oldest profession.”

The CPA protested, “Before God created Eve from Adam’s rib, he created an orderly universe from chaos.  That clearly shows that God was an accountant before he was a surgeon.  Accounting then has to be the oldest profession.

The lawyer sat for a moment smiling, looking at the surgeon and the CPA.  “That may be true,” the lawyer said shrugging his shoulders, “but who created the chaos?”

The recent deadly floods in Pakistanhave destroy $3.27 billion of rice, cotton and sugar production according to is Farm Minster Naza Muhammad Gondal.  The country lost about 2.4 million metric tons of rice (about 80 million bushels) and 10.4 million metric tons of sugar can.   The country may also need to import almost 3 million bales of cotton which would be a 1 million bale increase from last year. 

The cotton loss is one of the primary reasons why cotton prices have gone of $1 per pound and have reached a 15 year high.

Over 2,400 miles of roads have been destroyed and food inflation for the current year may exceed 20%.

Rice exports may plunge up to 35 percent for the year reaching no more than 3 million tons from last year 4.6 million tons.

About 15 percent of the sugar crop was destroyed and the county may need to import a million tons of raw or refined sugar to meet demand.

It seems almost anywhere we look in the world weather problems are raising the price of food.  It will be interesting to see if the trend continues or if things get more back to “normal”.