Ag-Visors

We have finally had some rain. And March is here. While driving around the country, you can see green grass coming up in most fields. This is a great site for all cattle and horses. We have all depleted our hay stores and I am sure everyone is getting tired of feeding hay.

What determines credit worthiness? A question that I get asked quite often is “what does a credit analyst actually do?” Usually I find myself answering that my job entails looking at tax returns and financial statements and crunching numbers. In all honesty, though, that’s just part of the story. While the financial aspect is important in analysis, it is only one factor of what we in the financial business call “The Five C’s of Credit” – Capacity, Capital, Collateral, Conditions and Character.

Appreciation in value of a taxpayer’s farm or ranch property is often a significant issue in the context of the hobby loss rule.  Although a “reasonable” expectation of profit is not required, the profit objective must be bona fide.  It is the expectation of gain, and not the gain itself, which matters.

As I write this article, my family’s cattle business is right in the middle of the spring calving season. It’s my favorite time of year, seeing those new calves hit the ground running, sometimes almost literally. In order to have a successful calving season, though, there has to be preparation beforehand – selecting the right bull, providing adequate nutrition for the cows, administering necessary vaccinations and pregnancy checking. The same process can be applied to preparing for a successful year for your operation – selecting the right financial partner, figuring out the right financial input and protecting against complications, foreseen and unforeseen.

As I write this article, my family’s cattle business is right in the middle of the spring calving season. It’s my favorite time of year, seeing those new calves hit the ground running, sometimes almost literally. In order to have a successful calving season, though, there has to be preparation beforehand – selecting the right bull, providing adequate nutrition for the cows, administering necessary vaccinations and pregnancy checking. The same process can be applied to preparing for a successful year for your operation – selecting the right financial partner, figuring out the right financial input and protecting against complications, foreseen and unforeseen.

By the time this article is published, most farmers and ranchers will have a fairly good idea of their 2013 plans, if they have not already finalized them. If there is one thing those in agricultural must be, however, is flexible. A periodic review of one’s plans and the progress made towards them can assist an operation to know if goals are being achieved or derailed.

Here we are at the start of a new year. For many, that means New Year’s Resolutions, reflecting on the past year and making plans for the new year. The agricultural community has had a couple of tough years. A continual drought, uncertainty in the political climate, high input prices… the list could go on. A year ago, most in agricultural were looking toward a good year, which did not materialize. Plans for expansion were scrapped for alternatives to just survive. Now, plans made for the 2013 year are being made on the assumptions that the drought will continue, Washington politics will remain stagnate and prices will continue to go higher. By the time this article is published, most farmers and ranchers will have a fairly good idea of their 2013 plans, if they have not already finalized them. If there is one thing those in agricultural must be, however, is flexible. A periodic review of one’s plans and the progress made towards them can assist an operation to know if goals are being achieved or derailed.

With the New Year starting, we are hoping it will be a great and profitable year for all of us in agriculture. Along with hope, we need a little assurance, which takes planning. We need to look at what we want to do with our animals to make them more profitable.

The most important part of winter feeding to me is not how much protein we can feed but the total calories. Protein is the most expensive nutrient and can be over fed. Too, much protein will tax the kidneys and liver while causing a G.I. upset. Mostly cattle need a certain amount of protein and then they need the calories, carbohydrates and fat. The rumen in a cow will tear apart protein and make their own. Therefore, we need to give them enough nitrogen from protein, with the building blocks from carbohydrates and fat to make what they need and to maintain or gain weight.

Livestock owners are permitted to take depreciation deductions on their farm to offset gross income, as well as to deduct reasonable costs of operating a livestock breeding operation or activity from other income.