As the 2011 harvest begins to wrap-up, we need to be thinking about the next steps we need to take on the farm. Fall tillage will be happening over the next few weeks. We are in a very dry soil situation that makes it hard on tillage equipment to get the job done. Some farmers are considering waiting for some rain this fall to soften things up before they do some fall tillage. Certainly fall fertilization with Anhydrous Ammonia (AA) should be postponed until we either get some moisture or maybe even waiting until next spring to apply our nitrogen fertilizers as they need moisture to adhere to the soil infrastructure. The warm fall weather also means that soil temperatures are too warm for AA application. So what remains to be done this fall? Following are some comments from Al Roesler, FBM instructor on what he sees as priorities for this time of the year.
For many farmers, a written checklist is the only way to remember an important issue. Throughout harvest checklists were used to track fuel tank levels, record loads for crop insurance purposes, where those crops were sold or stored, which fields were tilled and even where fertilizer was applied for the 2012 crop. With those tasks completed, it is time to focus on the 2011 follow up and the planning for 2012. Next year, like every year, promises to have its own set of issues and developments that are impossible to see and forecast.
Call it inventory management. By pulling together bin measurements, forward contracts, and the amount already delivered, you can begin to assess the yield and the value of this year's crop. Will there be a crop insurance indemnity coming? There is also the value of that fall fertilizer prepaid or spread. How much fuel is left in the tanks? How much do others owe for doing custom work, or perhaps you owe to someone?
Next is the recordkeeping of the year to date. Whether you use comprehensive accrual accounting software or use a pencil and paper account book, use whatever method best suits your needs and is easily attainable. Your needs this time of year include accessing income and expense totals to date. Also needed is that list of bills that need to be paid by year end and a projected list of income that will be coming by year end. The analysis of these records and their translation is a critical part of understanding your farm business.
We are about to lay out some options for income tax management purposes. Included in those options, are the potential opportunities to position the farm operation for years to come. If the business is showing a profit, what is the best way to use it? We also need to educate ourselves on the latest tax law updates and how they pertain to us. For example, how does a social security with-holding change affect the average farm family? There are some changes to depreciation and other tax law that you need to keep current with.
Farmers enrolled in farm business management programs do this annually. The same records are used after the beginning of the new year to analyze last year, compare their financial and production data with prior years and also with peers in a number of ways. In addition, planning ahead into the next year is a feature of the program that meets the needs of over 3,000 Minnesota farmers and their families.
For more information, contact a Farm Business Management Instructor, or visit our website: www.fbm.mnscu.edu.