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Debt to Asset Ratio Looks Great – But!
The University of Illinois puts out a great daily email called the “Farm Doc Daily”. In today’s email, they summarized the debt to asset ratio from 2005 through 2011. The lower this ratio goes, the better. Their database showed that the average farmer in Illinois for 2005 had total assets per acre of $1,267 and related […]
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When Does A Large Price Increase Spell Trouble?
The Kansas City Federal Reserve 4th quarter survey of Ag conditions spotlighted an ever upward trend in farm land prices. On a year-over-year basis, irrigiated farmland in Kansas, Nebraska and the Mountain states all saw increases over 30% and non-irrigated land increased by more than 20% in all states. For the last two plus years, land […]
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Mainstreet Index Still Remains Robust
Creighton University produces a monthly index called the Rural Mainsteet Index (RMI) indicating the overall economy for several rural states in the Midwest and Mountain states. The May Index was recently released and I thought this month I would recap the index for each of the states covered. Any value greater than 50 indicates economic […]
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Make Sure to Coordinate Estate Documents with Ag Laws
At the Northwest Ag Bankers conference yesterday Corey Brock a local attorney spoke on various issues related to estate and tax planning for farmers. In most parts of the Columbia Basin water project a farmer is limited to owning 960 acres. If you go over this limit certain penalties will apply including possible loss of […]
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Get Your Message Out!
I spent today in Spokane attending the Washington Bankers Association agriculture conference. I gave an update on the possible new farm bill provisions along with an update on the new tax laws. After I spoke (never a good thing to give the farm bill and tax update right after lunch) Alex McGregor of The McGregor […]
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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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From 80 to 45 in 40 miles
I have been traveling in the Midwest this week. The first two days I spent in Osage Beach, Missouri for some tax continuing education. The temperature topped out near 90 degrees yesterday and as I traveled to Cedar Rapids, Iowa it remained near 75 to 85 degrees the whole way. After arriving in Cedar Rapids, […]
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Don’t Forget Your Retirement Plan
I was talking with a new farm client the other day about his estate plan and what struck me the most was not how much farm land value he had accumulated but rather the amount he had tucked away into his retirement plans. This amount was over 6 figures and he had only been contributing […]
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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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What About Those 1099s?!
Almost fully back from the rigors of Tax Season, it is now time to start posting on our more usual basis. We got the following question from one of our readers in response to our post on using deferred payment contracts. “What about the 1099 that you would receive from the elevator that would show […]
