“Now is the time to concentrate and make a road map of where you have been and where you are going on your farm,” said Frank Friar of the Wisconsin Farm Center. “Regardless of your size, it is important to recognize what is working and what improvements need to be made now to prevent a challenging situation in the spring.”

The first step to completing 2013 is to collect the income and expenses from the first 10 months that are completed and to project the remaining two months. This will give a big, overall picture of the year.

Now is the time to sit down with a tax preparer who can look at the farm financial information to determine if any or all 2014 operating expenses should be purchased before the end of this year. Tax preparers can also help figure out if you should sell now or hold on to this year’s harvest or cull cows until the beginning of next year.

“Farmers can make more this time of year sitting down at the desk with their tax preparer than selling corn,” Friar says. “No one likes doing it, but it is work that will pay off in the end.”

For farmers who rent land, winter is the time to review contracts. Double check when the contract begins and ends, and verify what it says about making changes. Using cost projections for next year, farmers can determine how much they can afford to pay for land rent.
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“If you can’t cash flow at the current rental rate, ask the landlord if there is room to negotiate or possibly make an agreement to share the risk,” Friar says. “It is not a good business decision to farm rented land if you know going into the season that you will lose money.”

Besides the books, take some time in the shed to evaluate equipment needs. Check if the current equipment is ready for another season or if there is a need to make a trade. Make sure all the needed reporting is done for the Farm Service Agency and insurance companies on acreage and yields. If production wasn’t as expected, talk to an agronomist to fix the issues in those trouble spots in the field.

Dairy farmers should take a feed inventory early before running out of supply. It may be more affordable and easier to lock in a better price now when feed stocks are available. Livestock farmers can use this time to calculate cost of production to make sure they are getting the most out of their feed.

“It is important to keep good communication with all your farm partners, including your lender,” Friar says. “Once you know where you are tax-wise and what your budget is for the coming season, the lender can better understand your line of credit needs.”

A majority of Wisconsin’s farms are a family business. Sit down together to understand where the farm is now and where it needs to go in the future. If a transition plan isn’t in place yet, this may be the time.

“Families need to look at the business plan to understand what each person wants and what needs to be changed before another year begins,” he says. “Everyone needs to understand why they are doing things the way they are to be profitable. This will help the family and the farm to be in sync and successful for another year.” FG

—From DATCP news release