More in Issues

  • Sep 23, 2014
    blog

    2014 Crop insurance payments likely (in Minnesota) 1

    The continued low CBOT corn and soybean prices increases the likelihood of significant 2014 crop insurance indemnity payments for many Minnesota farm operators that have 80% and 85% RP insurance policies in place. Crop insurance payments may not be as widespread in states such as Iowa and Illinois, which are likely to have much higher 2014 corn and soybean yield levels than will exist in much of Minnesota....More
  • Sep 23, 2014
    blog

    The power of inflation: Time is not on your side! 2

    As you think about retirement, keep in mind how inflation can impact your investment strategies. At a 4% historical long-term inflation rate, $50,000 becomes $25,000 in buying power by the year 2032 (72 / 4 = 18 years). As a goal, one should aspire to generate a return on your investments including dividends and appreciation that meets or exceeds the rate of inflation to maintain buying power....More
  • Sep 16, 2014
    blog

    Biggest threats to young, beginning farmers 1

    The saga of the young farmer and rancher continues as transition in the agriculture industry is in full bloom. While there is no surefire way to get started, there are some common threats, whether starting from scratch or entering a family business. Let’s examine some of the threats and pitfalls that frequently arise....More
  • Sep 9, 2014
    blog

    Pay attention to FSA farm program information 3

    There have been several reports of the data on some FSA units not being accurate, due to changes in FSA farm units that occurred in the past five years. It is very important for farm operators and land owners to review this data, and to report any data that is not accurate the local FSA offices by September 26. This data will be used in the coming weeks for decisions on base acre reallocation and updating FSA payment yields on each FSA farm unit....More
  • Sep 8, 2014
    blog

    Profit margin compression, part 3 – Price reality 1

    Inflation, while benign in the general economy, has been running full steam ahead in input and operating costs in the agriculture industry ranging anywhere from 5% to 10% annually. Combine this with increases in real estate taxes and the fixed cost component of equipment and machinery, and one can quickly observe how profit margins have quickly disappeared with lower commodity prices....More
  • Sep 2, 2014
    blog

    Profit margin compression, part 2: Operating expenses to revenue ratio 1

    The average producer on FINBIN databases typically spends 73-75¢ to generate $1 of income, leaving only roughly 25¢ for other financial obligations. It is disturbing that this ratio jumped above 80¢ in 2013 for the first time since 1995, illustrating severe margin compression, particularly among the average producers....More
  • Aug 26, 2014
    blog

    Profit margin compression, part 1 1

    In over 30 years analyzing and examining farm record data, I have noticed that profitability decline will usually precede cash flow and repayment ability issues by about two to three years. Could it happen this time?...More
  • Aug 26, 2014
    blog

    Land owners will help make farm bill choices

    Land owners who do not farm their land are not typically involved in farm program decisions at FSA offices, as those decisions are usually made by farm operators. However, in the coming months, farm operators and land owners will have several one-time choices to make regarding their farm program participation for the 2014-2018 crop years, as part of the commodity title of the new farm bill....More
  • Aug 19, 2014
    blog

    Global and domestic economic risk

    Currently, as of mid-August, geopolitical risk is the largest risk with a “code red.” The unrest in Ukraine and tension in the Middle East move markets daily. Unfortunately, agriculture is often the industry first affected by political and military unrest....More
  • Aug 12, 2014
    blog

    Potential for ACRE payments for 2013 corn 1

    It appears that corn producers in Minnesota and Iowa who remained in the ACRE program for the 2013 crop year will have a good chance of receiving an ACRE payment in October of this year. Any potential 2013 ACRE payments to qualifying farm operators will be sent out by local Farm Service Agency (FSA) offices after Oct. 1, 2014....More
  • Aug 12, 2014
    blog

    Ag lenders talk about agriculture land values

    Nearly 30% of participants in a recent class indicated values had increased by more than 10%, while the largest percentage, 64%, responded there had been between a 0% and 9% increase. The remaining 8% indicated land values were slightly declining in their region....More
  • Aug 5, 2014
    blog

    Farm bill program decision time 1

    Farm operators and land owners will have several one-time choices to make in the coming months regarding their farm program participation for the 2014-2018 crop years. Since the commodity farm program choices are for five years, land owner approval and signatures will be required on all cash and share rented farm land. Some of the choices include: reallocation of crop base acres, farm program payment yields and risk programs....More

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