Farm Industry Trends

  • How to Handle Allocation of Purchase Price

    One of our readers wrote in the following question: “Our son is in the process of taking over our hog operation. They would like to buy all the buildings, equipment, and house on a contract. Do we need an appraisal for this transaction? Some of the buildings and equipment are 16 years old and fully […]

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  • How’s Your Sugar High?

    The Wall Street Journal reported today that the sugar prices are nearing a 30 year high.  The benchmark March sugar contract settled at 30.15 per pound yesterday.  That was the highest close since January 14, 1981.  There was a rally earlier in the year that got close to the same price, however, that rally was […]

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  • Is China Running Out of Farmland

    Colvin and Company provides a very good blog related to farm land investments called Farmland Forecast.  In one of their more recent blogs, they did a great analysis of whether China is running out of good arable farmland. At the beginning of 2000, China had about 128 million hectares of good arable land.  As of […]

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  • Can I Defer Taxes on Equipment Sales?

    We got the following question from one of our readers: “I’m downsizing and want to sell some of my depreciated equipment. If I sell it out right I will pay full tax the first year on sale price. Can I lease my Equipment to someone for five to ten years to have the income spread […]

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  • Investors Worry About Accuracy of USDA Reports

    In Friday’s Wall Street Journal, there is a front page article in the Money and Investing Section regarding the worry of various investors about how accurate the USDA has been with the latest US corn crop.  As most farmers know there has been whipsaws in the reports issued this year. In June, the USDA reported that stockpiles […]

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  • Volatility – Is it Your Friend of Enemy?!

    Another nugget of information that I got out of the speech by Dr. Boehlje of Purdue University on Wednesday is that accordingto their studies at the school, the volatility associated with agriculture has gone up by 400% in the last few years.  This means that the price swings in ag commodities is now 4 times greater than […]

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  • Lock in Low Rates Now!

    Dr. Michael Boehlje, a farm economics professor at Purdue University spoke at out opening day of the National Ag conference of the American Institute of Certified Public Accountants (I know that is a mouthful).  He gave a 4 plus hour presentation on the agricultural economy both currently and insights into the future. One of the […]

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  • When is a Deposit Income?

    I will be at the annual American Institute of Certified Public Accountants Ag Convention in Denver today till Friday.  I hope to come away some ideas for our farmers. We had a reader ask the following question: “Can you hold checks that have been sent to us for grain sold in 2010 until 2011?” The […]

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  • Creative Taxpayer Gets Denied

    Many farmers forget to properly allocated their purchase price when purchasing land.  For tax purposes, you can not deduct land, however, you can depreciate any improvements made to the land.  For example, assume a farmer buyer a quarter section for $1 million dollars.  On that quarter section, there is a well, roads, fences, buried main […]

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  • Cost Basis Now Reported on Form 1099-B

    Back in 2008 a new law was passed requiring banks and brokerage companies to report the cost basis of stocks, bonds, etc. sold during the year.  This reporting is to start for purchases after December 31, 2010. The IRS has now released regulations that this cost basis information will be reported on form 1099-B which […]

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