Minding Ag's Business
Marcia Zarley Taylor DTN Executive Editor

Tuesday 04/22/14

Not 1979 All Over Again
Crop insurance has been a huge buffer to protect against another 1980s debt crisis, analysts say.[Read Full Blog Post]
Posted at 3:11PM CDT 04/22/14 by Marcia Zarley Taylor | Post a Comment
Comments (2)
Big government just keeps on creating disasters. In the 80's big government was on an insane ag credit extension binge. Now big government has embarked on an insane crop insurance guarantees binge marked be spending billions targeting those with the most wealth the largest income guarantees. These insane guarantees have produced a disastrous bumper crop of skyrocketing land costs with minimal margins of per acre profitability as well as driving many smaller farmers out of business. We can depend on the liberals to continually grow the national debt, flush billions down big government rat holes, and raise the costs of growing food or procuring health care.
Posted by T Kuster at 7:17AM CDT 04/24/14
Koenig points out that you repay debts with cash flow (i.e. income) and not with assets. This is exactly the truth, but when others say we are fine because we have such good D/A numbers, there lies THE fallacy. That number only means something when the asset is sold. I don't know how many times I have had to tell farmers that equity does not repay debt. Profit does. It isn't a hard concept. The numbers to look at are working capital to gross revenue, and the Debt coverage ratio. Those 2 are better measures of farm profitability. If you take out the inflated real estate prices of just the past 5 years, what kind of D/A ratio do you get? If the land on my balance sheet that I paid $1000/A for in the 90's is now worth $8000, but I still owe $400/A on it what does that tell me. In completely simplistic terms, my D/A ratio went from 40% to 5% but my payments didn't change. For this reason, I think we are ignoring the facts that the farm economy is much more unstable than economists think. Sure I have plenty of equity to refinance losses, but I sustained those losses because I did not make money. Adding to my debt by restructuring is a short term bandaid. I need to generate more income (net income preferrably) to service that debt. Crop insurance helps limit my downside, but how much? Do I have 20% operating profit margin on my operation so that when I have a crop failure I can repay all my input costs, make all my payments, and have money to live on? I think the real answer is no for the majority of the operations out there. If they don't have working capital, they have to refinance and you just dig yourself a little bit deeper in the hole.
Posted by Pedro Sanchez at 9:04AM CDT 04/24/14
 

Friday 04/04/14

The Great ARC or PLC Debate
Your irrevocable 2014 farm bill decisions are getting complicated by this spring's surprise price rally. While it was widely assumed commodity prices were headed for a multi-year crash when the farm bill was being drafted, few experts considered what your best risk management options would be if markets stayed near levels achieved over the last two months.[Read Full Blog Post]
Posted at 5:27PM CDT 04/04/14 by Marcia Zarley Taylor | Post a Comment
Comments (13)
"When the people find that they can vote themselves money, that will herald the end of the republic. Ben Franklin" Amazing that Ben Franklin could foresee federal crop insurance investment/profit guarantees as well as the billions for milllionaires farm bill.
Posted by T Kuster at 7:02PM CDT 04/04/14
Is this Barnaby an idiot,I will be as happy as can be to farm without goverment help if grain prices stay up.Sounds like he is hoping the bottom falls out so we can use the new price protection.I would like to farm alone don't even sign up for farm program.KEEP THEM GUESSING.
Posted by Raymond Simpkins at 7:05AM CDT 04/07/14
See the expanded story in DTN Top News today. Ray, I think Barnaby's main message is to keep conventional crop insurance coverage as your mainstay, if you're not as bearish about prices as some of the experts.
Posted by Marcia Taylor at 11:48AM CDT 04/07/14
After reading your farm bill article it occurred to me that FAPRI had a lot of input to congressional members in tying the new farm program to their forecasts. The assumption that farmers will continue to grow corn at prices below cost of production seems odd. That assumption is built in to a program that farmers must choose for a five year period? No one can survive losing money for 5 years even with gov. assistance. Do they expect farmers to be totally dependent on subsidies with no chance for the free markets the US has touted around the world for decades to operate? What am I missing?? --Barry Mumby
Posted by Marcia Taylor at 1:04PM CDT 04/08/14
Good question, Barry. It's possible farmers will be in no-man's land--prices not high enough to trigger much aid but still below cost of production for many. Do you think rents, fertilizer, seed costs can come down again to rebalance for 2015?
Posted by Marcia Taylor at 1:08PM CDT 04/08/14
I'm with you Ray. Don't sign up. Don't report acres or bushels. Keep them guessing. With volatility comes opportunity.
Posted by KC at 11:14AM CDT 04/09/14
I wish you would have been concerned about skyrocketing crop production prices Marcia when government was busy awarding massive guarantees of profitability to the largest most profitable farm businesses and many other farmers as well. When government guarantees profitability, harvest time has arrived for everyone and their brother.
Posted by T Kuster at 1:38PM CDT 04/09/14
Hey Kuster, Did you ever listen to a broken record? Never gets to the next song.
Posted by Bonnie Dukowitz at 5:52AM CDT 04/10/14
Your energy (positive and negative) on crop insurance needs to directed towards development of a insurance product that is not dependent on government support. Crop insurance not supported by tax dollars and not run by the government is the answer to all your comments on both sides. Fighting among the farm community does nothing to forward progress.
Posted by John Finley at 8:52AM CDT 04/11/14
We had that in the health insurance industry and now we have the un- affordable care act. Nice thought though.
Posted by Bonnie Dukowitz at 6:35AM CDT 04/12/14
Affordable Health care for everyone should be an adopted into the Bill of Rights.
Posted by Unknown at 8:50PM CDT 04/14/14
Yeah, I wouldn't want to put my name to the statement directly above this one either. I don't even know where to start on the lunacy of that comment.
Posted by Brandon Butler at 9:24AM CDT 04/16/14
"It is difficult to free fools from the chains they revere." Voltaire
Posted by Brandon Butler at 10:22AM CDT 04/16/14
 

Wednesday 04/02/14

Farm Incomes Bounce from Feast to Famine
Minnesota farmers already took a hit on 2013 farm incomes. They could be bellwethers for farmers in other Grain Belt regions.[Read Full Blog Post]
Posted at 3:52PM CDT 04/02/14 by Marcia Zarley Taylor | Post a Comment
Comments (18)
Marcia, you should be ashamed! To even put the word famine in the headline is insulting to all Americans. I'm sure you didn't bother to look at the FINBIN data did you? If you did you wouldve noticed that the average MN farmer spent over 114000!!! on living and personal expeditures last year! That is a lot of resturant meals, vacations, harleys, house remodels, etc for folks suffering from famine. Do you realize that the average MN farmer has a net worth of 1.6 million? I would love for you to spend time in main street America and seek sympathy for millionaire farmers living high on the hog when a good portion of the US has literally no net worth and would love to have 50k per year to spend on living. You really need a reality check, WOW!
Posted by Bill Billson at 8:13AM CDT 04/03/14
"When the people find that they can vote themselves money, that will herald the end of the republic. Ben Franklin" Sounds a whole lot like what is happening with ethanol blending mandates.
Posted by T Kuster at 1:52PM CDT 04/03/14
"When the people find that they can vote themselves money, that will herald the end of the republic. Ben Franklin" Sounds a whole lot like what is happening with ethanol blending mandates.
Posted by T Kuster at 1:52PM CDT 04/03/14
Always looks greener on the other side of the fence. When the bottom drops out of a market (land, livestock, grain, stock market, housing) you can't get out from under it fast enough. Financial ruin follows. Wonder who would feed the country if farmers go under. China maybe!!! Makes you feel warm and cozy does it not????
Posted by Gale Schaefer at 8:27AM CDT 04/05/14
Those with millions in net worth have a safety net and have no right to be sticking the taxpayer for billions in investment/profit guarantees.
Posted by T Kuster at 8:57PM CDT 04/06/14
Bill, I think you've gone a little overboard misinterrupting with the numbers. Average family living expenses for Minnesota farm families were $65,150 in 2013, hardly high on the hog. True, that's up from $52.771 in 2012, and something Nordquist worries about, but pretty frugal Scandinavian standards in my book. I hate to begrudge farmers who want a lifestyle on par with their suburban peers one single year, especially after waiting 40 years for decent crop prices. Total living, investments and capital purchases--did run $114,565 in 2013--but some of those items can include farmland buys or other capital improvements that will benefit the farm long-term.
Posted by Marcia Taylor at 11:44AM CDT 04/07/14
Ok, this set this record straight, Farmers get up to 65% of their insurance premiums reimbursed EVER YEAR from tax payers, so a 40k policy is over 22k back to them, PLUS the insurance checks for falsified yields( yes more and more farmers are doing this now, just not getting caught, I tired of hearing this "they feed the world" , they are a business(most are corps now, not family farms). the only time they should get help is when a disaster happens, the massive erosion that is happening is just insane, just to get a government check. Sad, oh by the way, we have a family farm to for 5 generations. My grandpa never go a check, he saved money from the good years to cover the bad years....that 114k is net, clear. So he already made purchases, our neighbor that rents our land, buys 120k boats, a new cabin 400k and 2 new pickups(every yr) and he built a 600k house, that's just in one year!!,,so stop with this bs of famine crap. enough is enough
Posted by ryn bohr at 12:31PM CDT 04/07/14
Government has no business guaranteeing anyone a profit and since many farmers have no land costs and since fci covers most land costs, obviously many farmers are receiving annual profit insurance with a large part of the premium paid for by the taxpayer. And due to the extreme corruption of many congressmen these birds see nothing wrong with giving those with the greatest profits the largest profit guarantees. Obviously these clueless congressmen have never run a business in a highly competitive industry where the government guarantees the most profitable businesses the greatest profits. Marcia, why are you such a cheerleader for big government schemes that steal from smaller farmers any reasonable chance of competing in the ag industry?
Posted by T Kuster at 1:41PM CDT 04/07/14
Yeah Ryn if that is your true name, stop the bs. Which is it? Do you have a 5 tear generation farm? It seems to me if you really did you wouldn't rent it out if you really were a farmer!!!
Posted by KEITH PEARSON at 5:10PM CDT 04/07/14
I would say 65,000 is pretty good living.
Posted by Raymond Simpkins at 8:08PM CDT 04/08/14
For what it is worth, in our part of the state, the average corn acre generated a negative $79.00 per acre, after crop insurance.
Posted by Bonnie Dukowitz at 6:44AM CDT 04/12/14
If growing corn on your land produces a loss for you Bonnie, do not grow corn. If you want corn grown on your land or land you used to own Bonnie, rent or sell your land to someone with a high enough proven yield that will guarantee that person a profit.
Posted by T Kuster at 8:50AM CDT 04/12/14
People are always caught up by rhetoric it seems. We always forget that we have the most affordable as well as the safest to eat food in the world, partially because of the government subsidies that give them some control. Yes, I do think there should be limits based on a farmers income, giving other smaller or new farmers a chance to farm. The less farmers we have the more control the large farms have over the commodities. I think you can be as large of a farm as you wish, but if you show a certain level of income there should be no assistance or a limit. Also, I work for a large employer. Through this employer we have pre tax benefits for healthcare, investments, and retirement. I don't hear anyone saying that these funds should be taxed or eliminated?
Posted by Ryan E at 3:11PM CDT 04/13/14
You missed the point, Kuster. I was commenting on your obsession of guarantees. Some years are good, some are bad. Crop insurance is not in any way, what your obsession is. If food producers did not plant a crop, which is always risky, this country would certainly have an obesity problem. I raise enough to nourish myself and my family. Do you?
Posted by Bonnie Dukowitz at 9:06PM CDT 04/13/14
Adjust to it Bonnie - As long big government is fixated on continually awarding those with the greatest probability of the greatest profits larger investment/profit guarantees aka benefits of greatest value, many people will be financially harmed and will be justifiable irritated. Your questioning my agricultural productivity and ability or inability to provide is evidence of your incompetence, redundancy, and lack of comprehension.
Posted by T Kuster at 7:35AM CDT 04/14/14
Good grief, Kuster. What do you not understand? Any and all business's, including growing corn, will have a loss at some point. Crop insurance is just that, Insurance! Not a guarantee. Good grief!
Posted by Bonnie Dukowitz at 7:45PM CDT 04/14/14
Insurance, government guarantees, and profitability are highly fluid concepts when you consider the billions in premium subsidies and billions in other subsidies involved in the extremely corrupt crony capitalistic big government schemes such as federal crop insurance and obamacare. There are no end of comparisons that can be made between these schemes. Many of those benefiting from the frequent occasions where the government is providing profitability insurance would not dream of admitting that they have in fact received profitability insurance. More evidence of how fluid a concept insurance is can be found in http://www.nationalreview.com/article/375726/progressive-insurance-victor-davis-hanson
Posted by T Kuster at 7:30AM CDT 04/16/14
Good Grief! Too bad the taxpayer has to provide financial guarantees for the EWG, PANNA, etc.
Posted by Bonnie Dukowitz at 10:14AM CDT 04/16/14
 

Tuesday 03/25/14

Keep Family Legends Alive
Joining me today to discuss another topic on family values is Lance Woodbury, DTN and The Progressive Farmer's family business columnist who is based in Garden City, Kan. Lance trained as a professional mediator and has more than 20 years experience counseling small business owners on family conflicts, succession and transition issues.[Read Full Blog Post]
Posted at 10:00AM CDT 03/25/14 by Marcia Zarley Taylor | 0 Comments | Post a Comment
 

Friday 03/21/14

Russian Grain Embargo in Retrospect
Has anyone else observed what was missing in the lists of possible retaliations for Russia's takeover of Crimea? Military strikes, asset freezes, trade retaliation were on the table. But notice the words grain boycott or its cousin, grain embargo, never came up.[Read Full Blog Post]
Posted at 2:38PM CDT 03/21/14 by Marcia Zarley Taylor | Post a Comment
Comments (5)
Sounds like this whole Russian situation is a game of chicken regarding energy vs. the people. Being that Russia is a huge supplier of energy and fertilizer, the world is tip toeing around the situation. It will be interesting how this plays out.
Posted by Pedro Sanchez at 9:09AM CDT 03/24/14
China and India are part of the equation as well. See http://www.zerohedge.com/news/2014-03-21/petrodollar-alert-isolated-west-putin-prepares-announce-holy-grail-gas-deal-china
Posted by T Kuster at 8:42PM CDT 03/24/14
What did Obama think would happen when he sold Poland down the drain with missile defense system? Maybe he thought Putin would golf with he and the Tiger.
Posted by Bonnie Dukowitz at 9:11PM CDT 03/24/14
Way to add to the conversation Bonnie. Very constructive and insightful. Let go of your hate for the President and actually come up with an original idea of how to help the world move forward.
Posted by Pedro Sanchez at 8:22AM CDT 03/26/14
Simply amazing Pedro! Do you think this is just a Crimea, Ukraine issue? Did you read the article? "Post Iron Curtain retirement" Take a look at other happenings in Eastern Europe at the time of the missile defense system abatement. How about Ukraine not being accepted into NATO. The list is not short. The work of Pope John Paul and Ronald Reagan with the help of Solidarity has been undermined by this Administration to the point of weakness lower than when President Carter left office. If Crimea wants to be annexed by Russia, that is their business, but why the massive Russian troop buildup? Did Stalin not take one step at a time?
Posted by Bonnie Dukowitz at 6:10AM CDT 03/27/14
 
The Russians (And Others) Are Coming
Cheap land had trumped low yield for corn powerhouse Ukraine. Until Russia's annexation of Crimea this month, the former Soviet Union had been on track to make the FSU the world's No. 2 exporter.[Read Full Blog Post]
Posted at 9:47AM CDT 03/21/14 by Marcia Zarley Taylor | 0 Comments | Post a Comment
 

Tuesday 03/11/14

Why Seniors Keep a Grip on Land
Many elderly landowners just can't bear to pay capital gains rates of 30% or more on properties they acquired for a pittance in the 1940s, 1950s and 1960s.[Read Full Blog Post]
Posted at 6:25PM CDT 03/11/14 by Marcia Zarley Taylor | Post a Comment
Comments (16)
Also relevant is the feds zirp policy of stealing from savers by not paying them for the use of their money. Not only is the fed stealing from savers by not paying them for the use of their money they are deflating the value of it through QE and other deflationary policies. Very hard to justify turning real estate into cash.
Posted by T Kuster at 10:54PM CDT 03/11/14
As long as spendaholics control D.C. and state capitals, a supply of loot needs to be swiped from somewhere.
Posted by Bonnie Dukowitz at 5:27AM CDT 03/12/14
Whoa, whoa, whoa.....before you complain too loudly about the spendaholics, it would be wise to remember just who receives a big slice of that loot. Outrageous!
Posted by Unknown at 7:38PM CDT 03/16/14
No complaint! Just an opinion based on numbers. Some people are just cowards and do not have enough convictions to show themselves and critisize those who have the courage to stand up for what they believe. Then use alibis for their cowardice. Sorry for abusing you blog, Marcia.
Posted by Bonnie Dukowitz at 6:41AM CDT 03/17/14
Being agriculture's spendaholics are in control in DC with most of this agricultural spending being capitalized into higher land values what more could senior land owners such as Bonnie want?
Posted by T Kuster at 7:14AM CDT 03/17/14
Seems rather outragous, a few individuals cannot make a contribution for discussion, only pointed, demeaning insults with an extreme stuporous attitude.
Posted by Bonnie Dukowitz at 8:29AM CDT 03/17/14
And Bonnie, you feel your initial comment was a solid contribution and discussion point? You are throwing out a pretty pointed and demeaning insult as well. Where I come from, that is being called a hypocrite.
Posted by Pedro Sanchez at 1:06PM CDT 03/17/14
And Pedro; My initial comment was very brief, broad and general, with sarcasm. As written it includes a lot of politicians and bureaucrats. Amazing how some will attempt to disagree by name calling, which was the point I later attempted to make. If one thinks we should have politicians spending and controlling more of the taxpayers money, more power to you. Contribute as you like, however I will not respond more to what this exchange is evolving to be.
Posted by Bonnie Dukowitz at 6:00AM CDT 03/18/14
Bonnie, I bet you can't stop.
Posted by Don Thompson at 11:18AM CDT 03/18/14
Perhaps if taxpayers did not have to listed to pathetic lying politicians claim they are saving the taxpayers money by cutting the direct payment farm schemes while at the same time squandering billions more on new farm investment/profit guaranteeing schemes that target billions to millionaires, taxpayers might be more willing to pay capital gain taxes.
Posted by T Kuster at 12:01PM CDT 03/18/14
Re Don Thompson; LMAO!
Posted by Unknown at 6:24PM CDT 03/19/14
How do you pay for the accumulated debt that is still attached to the land? How about family living expense? A few article ago, these future retires made $27 dollars / acre profits. Do you think the social security check will be large enough to pay living expense? Maybe cash rents just makes ends meet?
Posted by doug taylor at 5:42PM CDT 03/20/14
Most people can figure out if a land investment does not pay for itself, the logical solution is to cash out of an investment that has doubled in value many times over just a few years. The constitution does not guarantee that all or any land investments should guarantee perpetual prosperity forever for you and your dependents.
Posted by T Kuster at 7:37AM CDT 04/03/14
Marcia, you are interpreting the numbers incorrectly or you dont understand financial statements. The 114k figure does not include any farm capital purchasrs or expenses. Basically it calculates the total wage you need to cover your personal spendng so essentially you would need a job in the top 1% to maintain that lifestyle. FAMINE...LOL
Posted by Bill Billson at 3:44PM CDT 04/07/14
Marcia, you are interpreting the numbers incorrectly or you dont understand financial statements. The 114k figure does not include any farm capital purchasrs or expenses. Basically it calculates the total wage you need to cover your personal spendng so essentially you would need a job in the top 1% to maintain that lifestyle. FAMINE...LOL
Posted by Bill Billson at 3:45PM CDT 04/07/14
Marcia, you are interpreting the numbers incorrectly or you dont understand financial statements. The 114k figure does not include any farm capital purchasrs or expenses. Basically it calculates the total wage you need to cover your personal spendng so essentially you would need a job in the top 1% to maintain that lifestyle. FAMINE...LOL
Posted by Bill Billson at 3:45PM CDT 04/07/14
 

Friday 03/07/14

Teach Kids Respect for Paper Wealth
Land appreciation and record profits from 2008-12 made many once cash-poor farm families feel like the billionaires next door. Anyone who lived through the farm credit crisis of the 1980s knows how fast that kind of paper wealth can vanish and the sacrifices farmers made to earn it back.[Read Full Blog Post]
Posted at 11:54AM CST 03/07/14 by Marcia Zarley Taylor | Post a Comment
Comments (1)
Also in need of education are adults who think that the government should guarantee their investments as well as guarantee profits. Trillions in debt and trillions in deficits have consequences.
Posted by T Kuster at 12:36PM CST 03/07/14
 

Thursday 03/06/14

Something's Gotta Give on 2014 Expenses
If high cash rents and bloated overhead expenses of the past five years are any indicator of the future, high-cost corn producers could be awash in red ink in 2014. University of Illinois economists expect season prices to average about $4 per bushel in 2014-15, down about 50 cents per bushel from last season's crop, so they are bracing for back-to-back hits on grain producer income.[Read Full Blog Post]
Posted at 2:03PM CST 03/06/14 by Marcia Zarley Taylor | Post a Comment
Comments (6)
Being that most of us farmers as well as other people of integrity can agree that the recent explosion in crop production costs has been exacerbated and driven by the insane and extreme government investment/profit guarantees offered farmers perhaps you Marcia can request these university economists push the numbers and tell us just how much more we farmers have to pay for land, machinery, and other crop input costs because of these multibillion dollar government spending schemes. After all these university personnel are public employees and the least they can do is provide us with some estimates of how we are financially harmed by this big government largess.
Posted by T Kuster at 7:58PM CST 03/06/14
Bravo T Kuster!
Posted by Unknown at 8:47PM CST 03/06/14
I hope no one listened to Agrisolutions and sold ahead. Prices are higher now than anytime last year.The guys who lost upward of 400.00 an acre in 2009 should no longer be farming,and would not be if goverment didn't save them every season.They are not vulnerable as long as they have that guarantee.Crop insurance eliminates any free trade,as long as end users are guaranteed so many acres are PLANTED EVERY YEAR.We have to plant with demand, not because the goverment wants to guarantee so many acres each year.The guys that are farming every year on the goverments shirttails are an end users dream.
Posted by Raymond Simpkins at 7:40AM CST 03/07/14
Go back to browsing the EWG website where these types of anti-rural America fallacies are acceptable. Or maybe you could try staying on topic with the blog.
Posted by Tim Haugen at 9:34AM CST 03/07/14
I know what catagory your in Tim.
Posted by Raymond Simpkins at 10:27AM CST 03/07/14
There are legions of smaller farmers Tim that are opposed to the mindless government insurance schemes that have decimated rural America by government continually targeting larger farmers with the largest investment and income guaranteeing schemes.
Posted by T Kuster at 7:03AM CST 03/08/14
 

Wednesday 03/05/14

Why Crop Insurance Can't Fly Solo
In cyclical businesses like farming, what goes up must come down--and it's usually market prices that adjust much faster than your cost of production. So the tailspin in commodity prices since 2012 is a poignant example of why crop insurance alone can't be the only safety net for farm income.[Read Full Blog Post]
Posted at 12:49PM CST 03/05/14 by Marcia Zarley Taylor | Post a Comment
Comments (5)
Government schemes that guarantee the largest income benefits and subsidies to those with the greatest wealth steal from smaller farmers a fair and equal opportunity to compete in ag which is exactly what the billions for millionaires farm bill does. With the trillions in deficits and trillions in national debt how do we have the money to provide multimillion dollar safety nets as well as millions in insurance subsidies to the wealthiest and largest farmers most who are multimillionaires. What more could be more pathetic than having most farmers addicted to and dependent on government farm insurance schemes? Typical insane government programs that provide the most benefits to those the least needy of any help.
Posted by T Kuster at 9:13AM CST 03/06/14
Great article Marcia! I always find it funny that whenever you write about crop insurance or any other government program, the T kusters and Bill's of the internet and whomever else they have trolling, for EWG or which ever group is offended by something farmers must have done in the past, come out in droves and all have the same type of bland comment to make referencing millionaires stealing from the poor, schemes, guaranteeing profits, etc.
Posted by Aaron Cross at 11:03AM CST 03/06/14
Crop Insurance can be a solo, stand alone program. You know how? By having farmers build in higher profit margins for themselves when they bid cash rents, farm land purchases, and when they spend money. If during the good times, farmers are making good money, they should be "saving" that profit for the times when they get tight. That is where we are at now. Just because cash flows are tipping in the red, doesn't mean we should make sure those farmers survive. This is a business and poor spending/business decisions should not get rewarded.
Posted by Pedro Sanchez at 9:01AM CDT 03/10/14
Government crop insurance as we know it has been a near total disaster. Decades of government targeting the largest farmers with the largest income/profit guarantees and insurance subsidies has stolen from smaller farmers any chance of competing in a highly competitive business. Government farm programs have decimated rural America.
Posted by T Kuster at 1:32PM CDT 03/10/14
What needs to change is the government mindlessly targeting those with the greatest probability of the greatest profitability the largest government benefits. Government financially bulletproofing and turbocharging those with the largest incomes with extreme financial benefits destroys any chances of smaller farmers to compete.
Posted by T Kuster at 5:32PM CDT 03/11/14
 

Thursday 02/27/14

Tax Reform Not Simple
House Ways and Means Chairman David Camp's tax reform plan released this week makes for good political theater but offers such a radical shift of today's tax code, few Washington insiders believe it can make headway in its current form this year.[Read Full Blog Post]
Posted at 2:11PM CST 02/27/14 by Marcia Zarley Taylor | Post a Comment
Comments (3)
Tax reform is immaterial when governments are trying to spend their way out of debt.
Posted by Bonnie Dukowitz at 6:34AM CST 02/28/14
We need to move to a consumption tax and trash the entire tax code as it exists. Provide a credit to pay no tax at all on spending up to the poverty line and tax all consumption of goods & services after that. No income taxes personal or corporate, no capital gains taxes, no entities to create to play the tax games, no K-1's, no payroll tax, no deductions or credits, and when you die no estate taxes - get rid of it all. It would be a high rate of tax on what you buy, but think about how simple it would be compared to what we have now, and you only pay tax when you can afford to spend. Huge incentive to save or invest in things that create jobs rather than just spend until you're broke. There would be a lot of attorneys with nothing to do, but everyone would be able to plan their future knowing exactly what they will pay tax on and when. Politicians wouldn't like it as they will have no "goodies" like tax credits, write-off's, etc to reward their supporters with, so it would be a tough sell in Congress, but it's the "fairest" tax plan possible in my opinion.
Posted by Gary Hoots at 7:47AM CST 02/28/14
Gary, I agree in principle with a consumption tax, but guarantee that within a year or two some sort of income based tax would be re-instituted. Is there a politician in either party that could be trusted to keep their hands off of somebody else's money? I can hear the argument now that we need to do this because of needed investments in infrastructure, schools, fairness, veterans benefits, etc. No politician can be trusted to keep their hands off somebody else's money, least of all the slimy characters we keep electing on the basis that they bring home the bacon to our state, district etc. We would end up like Canada and most of Europe that has Value Added Tax and Income Tax.
Posted by David Kessler at 9:57AM CST 03/04/14
 

Sunday 02/23/14

Picking PLC or ARC?
Which farm program option you choose under the 2014 Farm Act will be a split decision, largely along commodity lines, land grant university economists are finding.[Read Full Blog Post]
Posted at 3:38PM CST 02/23/14 by Marcia Zarley Taylor | 0 Comments | Post a Comment
 

Tuesday 02/18/14

No Substitute for Staying Low Cost
Bottom 25% of corn growers barely eked out a profit during the glory years of 2008-2012, some financial records show. That doesn't bode well for leaner profits on 2014 returns.[Read Full Blog Post]
Posted at 1:08PM CST 02/18/14 by Marcia Zarley Taylor | Post a Comment
Comments (6)
Thats a new thought!!! That farm incomes vary with farm management. Marcia, as long as there is crop insurance there will be guys growing corn for 27 dollars an acre.What I have been saying, is goverment will keep the poor performers going.Like your guys who are not worried about $4.00 corn.
Posted by Raymond Simpkins at 4:03PM CST 02/18/14
How much of the bottom 25% operators $225/acre imputs; being hidden as income - "capital expense"? Does cash and accrual accounting have different advantages for farm operation?
Posted by doug taylor at 7:10PM CST 02/18/14
Doug has a good point. Maybe some of the lower group smart like foxes!
Posted by Unknown at 7:30PM CST 02/18/14
Doug, the bottom 25% spent $225/acre MORE than the most profitable farms, for total expenses around $775/acre (see chart). Everyone was measured on accrual basis and used the same accounting program, so the lower group was not smart like foxes. If their land is paid for free and clear they have an extra cash cushion not shown here, but if they are renting most of their ground, they have will need real cost adjustments to stay afloat.
Posted by Marcia Taylor at 1:38PM CST 02/19/14
Poor Operators? Top 10%. Maybe the ancesters of the bottom 25% landed on the wrong quarter section to start with. If one buys some land in good growing year when lush crops surround, the long term operating is much more challenging. The bottom could well be better managers and operators than the top, just sat at the wrong table and dealt a poor hand to start with. Once a foundation is poured, it is not affordable to move it. Compare $27 to minimum wage, it brings home bacon in a smaller grocery bag.
Posted by Bonnie Dukowitz at 5:56AM CST 02/20/14
With expenses just above $500/A, my question is what are they using/paying for cash rent? Are the ones on or near the bottom paying more for certain inputs or is it all cash rent/debt payments/family living?
Posted by Pedro Sanchez at 9:45AM CST 02/21/14
 

Wednesday 02/12/14

Put '14 Crop Insurance on Auto Pilot
Good news is that the new farm bill poses little change in your crop insurance decisions for 2014, so what worked for you in years past should be standard operation procedurethis season, University of Illinois economist Gary Schnitkey writes in a recent post on FarmDoc.com.[Read Full Blog Post]
Posted at 6:23PM CST 02/12/14 by Marcia Zarley Taylor | Post a Comment
Comments (1)
Thanks Marcia for the info on TWI. I have no desire to minimize my risks by adding to my risks.
Posted by Curt Zingula at 7:03AM CST 02/13/14
 

Tuesday 02/11/14

Another Obamacare Deadline Eased
The on-again, off-again Affordable Care Act triggered again this week, as the Obama Administration issued 227 pages of final regulations defining which "large" employers must ultimately offer employee health insurance coverage and when.[Read Full Blog Post]
Posted at 4:42PM CST 02/11/14 by Marcia Zarley Taylor | 0 Comments | Post a Comment
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