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With all of the bad news and market challenges dairy farmers have been contending with during the past year, Michael Hosterman, agricultural business consultant with AgChoice Farm Credit, has a bit of positive information for producers looking to make improvements to their dairy business during 2019 and beyond.
With the end of another year, now is the time to brush up on key financial ratios and cost drivers that will assist in evaluating your farm’s performance.
It’s always a good season for saving money, whether commodity prices are high or low. Energy costs on your dairy can often be reduced by 10 to 35 percent, saving you money in the long run.
With decreasing commodity prices, many farmers are looking for ways to raise cash and pay down debt. One strategy that is often considered involves selling farm assets that are no longer used (or have become unproductive).
If you are making milk these days, then you are making money. It definitely feels good for a change, and optimism that these prices may be around for a while is everywhere.
So now that there is some extra cash left over in the bank account, the question is: What to do with it? The answer is: “It depends.”
I was born and raised in St. Charles, a rural town in southeastern Idaho. No, my parents didn’t run a potato farm, although the size of our potato garden might lead you to believe so. Rather, we ran a small cattle ranch.
The fiscal cliff has come and gone, and the nation has survived. I’m sure many of you were up late on New Year’s Eve glued to the TV awaiting a decision from Congress on a plan that would save the country from financial ruin.
When the negotiating and politicking was over and the dust settled, we ended up with exactly what we expected from our government: a short-term fix to a long-term problem.
The tax code is a maze of varying income tax rates and rules governing the application of these rates. Navigating this maze can be a complex task but understanding the various rules can greatly aid in tax planning for dairy farmers as they manage their livestock.
Livestock held for draft, breeding or dairy purposes that are sold as a result of drought or weather-related conditions may qualify for favorable tax treatment.
Gain does not have to be recognized on these sales if the proceeds from the sale are used to purchase replacement livestock within two years from the end of the taxable year in which the sale takes place.
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