Farm Industry Trends
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Supreme Court to Decide Tax Spat Between Circuit Courts
The Supreme Court has decided to hear a case involving a dispute between the Ninth Circuit on one side and the Eighth and Tenth Circuit on the other side concerning the issue of who owes the tax on the capital gains arising from a Chapter 12 farm bankruptcy. In most normal bankruptcies, the capital gain […]
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Tidbits From The Kansas City Fed – Part 2
Following our theme of providing tidbits from the Kansas City Fed Report: Milk producers have had at least three plus years of unprofitable operations. The Fed estimated that the average US dairy lost $4 dollars per hundredweight in 2006, made about 50 cents in 2007 and the lost $11, $7 and $4 for 2008-2010. On […]
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Tidbits From the Kansas City Fed – Part 1
As many of our readers know, we tend to quote the Kansas City Federal Reserve from time to time. They have a very good website with several quarterly reviews of the ag economy and farm land prices. They recently put out a report titled “Outlook for the Rural Economy” that has several interesting tidbits that […]
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Don’t Be A Hobby Farm
Many of our readers will ask us questions about starting a farm, however, when discussing it with them, many of them are talking about a hobby farm and not a real farm. For tax purposes, a hobby farm has some very unfavorable consequences to the farmer. Net income is always reported, however, a net loss […]
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Are High Wheat Prices Contributing to Mideast Turmoil?
The Thursday edition of the Wall Street Journal had a front page article on how the rapid increase in wheat prices is contributing to the turmoil in the Mideast. Most of the Mideast countries consume a much higher percentage of wheat in their diet than any other countries in the world. For example, Americans consume […]
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Are You Ready For The Whipsaw?
With the turmoil in the world commodity markets and the concern about the flooding and weather conditions in the US, farmers can expect that their commodity prices are going to whipsaw up and down very rapidly over the next several months. A key to not getting personally whipsawed is to have a written plan in […]
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If Grain Markets Are Topping, Start Locking In Profits
During 2008, grain markets were almost as high as they are now, however, many farmers were not able to take advantage of these prices either through already having their crop sold or through inaction by the farmers. I don’t know how many times I have heard a farmer in my office or out in the […]
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If the Bubble Busts, How Long to Recover
There has been a lot of talk lately in the press about whether farm land prices are entering a bubble phase similar to farm land in the early 1980’s or tech stocks in the late 1990’s. I decided to take a look at farm land prices for good Iowa farmland from 1950 to 2010 and […]
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Don’t Taint Your Farm Building
We had a reader ask the following question: “Does a construction company putting up a building get the same 100% bonus depreciation for 2011 like is on Ag buildings” The quick answer to this is “no”. A construction related building is not considered to be 20 year property and therefore is normally depreciated over 39 […]
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It’s Total Farm Compensation – Not Wages – That Counts
I think that every farm operation should have an employment contract with each of their farm employees including all family members employed in the farm operation. As part of this document, there should be an exhibit that outlines the total compensation package to each employee. Most farm operations offer much more than a wage such […]