Farm Leadership

  • What’s Your Contribution Margin?

    The University of Purdue and other universities do a good job of providing estimated crop costs and return guides for each major crop grown in their area.  I decided to take their 2010 Crop Cost and Return Guide and update with three ranges of prices for the five different crop rotations shown.  I am using a low, […]

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  • Remember Your 3 To 1 Ratio!

    Now that the USDA has really surprised us with an US corn crop of about 156 bushels per acre, as farmers you need to remember how this will correlate to your planting intentions for this year and next.  Since we can assume at current prices, corn, bean and wheat will be profitable next year, the […]

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  • A Battle for Acres

    It will be interesting to see which crop wins the battle for acres in 2011.  Right now, wheat, corn, beans and cotton are all enjoying much higher prices than last year.  The University of Purdue has calculated that the following returns above variable costs on high quality land are as follows: Corn – $447, Beans […]

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  • Consider Taking Your Dividends Now

    Many farmers created corporations several years ago that have always been taxed as a regular C corporation or may have switched to an S corporation after several years of profitable operations.  These corporations may have several hundred thousand dollars of retained earnings that under current law if they were distributed to the owners would be […]

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  • New Tax Goodies – Updated

    A very observant reader spotted an error in my last post on the new tax goodies.  In the reporting section for real estate rentals, the form 1099 reporting is for services provided to the real estate investor for items such as repairs, accounting, etc.  The payer of the rents was already required to report this […]

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  • Begin to Lock in 2011 and 2012 profits?

    As corn starts to exceed $5 in price and pricing can be locked in 2011 or even 2012 crops, have you checked your budgets for those years.  If you have and are able to lock in your major input prices such as fertilizer and diesel, you should be looking at making $250 per acre or […]

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  • Is an Unlimited Estate Tax Exemption for Farm Estates Harmful?

    I came across an article put out by the Center on Budget and Policy Priorities from Washington DC.  The gist of the article was that having an unlimed estate tax exemption for farm estates is unnecessary and likely harmful.  The focus of the article is that this policy would create 3 harmful situations: First, according […]

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  • Hedge is Good – Speculation is Bad

    Many more farmers are using futures contracts to hedge their crops these days than 20 or 30 years ago.  Hedging income and losses are treated as ordinary income or loss as part of the farming operation.  What many farmers do not know is that if they are using futures to speculate in other commodities or […]

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  • You Do Not Need to Own Any Land to Farm

    Moe Russell, of Russell Consulting Group wrote a very good article in the Corn and Soybeans Digest clear back in 2007 on the fact that you do not need to own land to be a farmer.  I personally think in today’s environment, most farmers who already own a bunch of land with no debt are […]

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  • Watch for Farm Partnership Tax Penalties

    In the recent Holdner Tax Court case, the IRS was able to make an argument that the farming operations carried on by father and son were in fact a partnership and not two separate farming operations that should be reported on their respective schedule F. In the case, the father and son had operated the […]

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