First finish, then look back and forward
Harvest is in full swing, and some producers may actually be close to wrapping up the 2010 production year. What a change from 2009 when it seemed that the crop would never mature out. This year’s harvest came earlier than normal. Crops rapidly matured because temperatures were above-normal this summer.
• In contrast to 2009, this year’s harvest came earlier than normal.
• As you wrap up the harvest, you need to consider management duties.
• Identify any weaknesses and plan for necessary changes for next year.
At this time of year, there are always management duties that deserve some attention. These are not listed in any particular order of importance.
• As harvest progresses, identify the weak areas of your fields and what corrective measures can be made. Include weed problems in your assessment. Glyphosate-resistant weeds should be particularly identified — a small problem can quickly get out of control the next year. This can have implications in your cash flow plan for 2011 because glyphosate-resistant weeds are expensive to control. Overall, I think producers did a good job controlling weeds; however, the costs were greater than planned. This one issue will have implications not only on weed control, but also on variety selection. Base your decisions for 2011 on solid data.
• Update your 2010 cash flow plan. Even though the final result will soon be evident, a quick assessment to estimate income, along with examination of remaining outflows for the year, can prevent problems before they occur. Include in the outflows any operating loan, equipment and land loans, cash rent, and an estimate of remaining expenses. On the income side, don’t forget USDA payments that will be coming in this fall. If you estimate a shortfall, be proactive and start exploring ways to address it now.
• Update your marketing plan. Have you filled all your contracts? Talk to your local elevator for alternatives on contracting as well as commercial storage if needed. Have you considered any postharvest strategies? Have you explored selling to potential end users such as ethanol plants or livestock producers? What about 2011 pricing?
• Start considering tax planning. If you wait until December, it is too late. Talk to your accountant and share your cash flow assessment. Any major tax planning should always be for economic reasons as well as saving taxes.
• Start formulating 2011 financial plans, including evaluating your cropping plan for next year. Sure, your cropping plan will change because the economics will change between now and spring 2011, but it will give you a starting point. It also won’t be long before you will be asked to start making 2011 seed and input purchases. Sometimes the best input prices, arrangements, financing or deals are available early to producers who know what they need for the next year.
As you wrap up harvest this month or next, keep in mind that the decisions that are made in profitable times are the ones that have the greatest impact when times get tough. If the year wasn’t quite as profitable as planned or anticipated, it is never too early to evaluate your operation to see what changes may need to be made. If you need assistance in farm management, planning or marketing, contact your local County Extension office.
Danehower is a University of Tennessee Extension area farm management specialist. Reach him at email@example.com.
This article published in the October, 2010 edition of MID-SOUTH FARMER.
All rights reserved. Copyright Farm Progress Cos. 2010.