Ag-Visors

An insert in a recent issue of this publication forecasted the growth of the American cattle herd, which reminded me of a matter I handled recently. My client, who does not own much land, purchased a small herd of cows, and then entered into a bailment contract with a neighbor, a large landowner. His intent was to use his neighbor’s services and resources to grow the herd and take advantage of higher beef prices. Unfortunately, it did not turn out that way.  In this article, I will point out what my client got right and where he went wrong.

Lepto is a dreaded abortion disease of cattle. In the last few years we have figured more out about this problem. We have found Lepto to be in almost every mammal, including man. I have known a local dairyman that came down with it. He almost died in the hospital from it. Therefore, this is truly a zoonotic disease and can be transmitted to man.

All borrowers have a unique situation when applying for a loan. By using the 5Cs of credit, lenders can evaluate the strengths and weaknesses of each situation individually. The factors taken into consideration are, character, capital, capacity, collateral and conditions. This series takes an in depth look at each individual criteria. This is the fourth installment, which discusses the importance of collateral.

Farms of similar type and size often have observed differences in net farm income. Net income on any farm depends on several factors. Most of the difference in net income between farms can be attributed to farm size, yields, input costs, enterprise (crop) combinations, fixed costs and commodity marketing. A complete analysis of these areas of the farm business should be conducted on a regular basis.

Throughout my career with University of Missouri Extension my role as been to help beef producers find ways to improve their profitability. I’ve noticed producers often look for the “silver bullet” in some gadget form that will suddenly cure all their woes. The “silver bullet” we’ve all been looking for may not be a gadget at all, it may have been there all along – management.

All involved in the livestock industry have seen tremendous volatility in production costs over the past few years. This volatility can be tied in part to the feed grain and oilseed markets. With feed being the major component of production costs for livestock producers, the recent wide price swings in soybeans and soybean meal have greatly increased business risks for many operations.

When considering a candidate for a loan, a lender is interested in the five factors of credit: character, capital, capacity, collateral and conditions. These standards help determine whether an applicant is capable of meeting the loan terms.

When preparing to complete a loan application or speak with your banker about extending an existing line of credit for your farm, don’t be surprised when they request tax records from both your personal and business filings. “It’s all in the family,” your financial family that is. Let’s review the various types of financial information that a lender may request.

Every lender uses a set of guidelines when screening applicants for a loan. By understanding this decision making process, borrowers will know exactly what to expect and how to prepare in order to start the loan application process.

There are many websites and radio advertisements that offer services to help “compromise” IRS Tax Bills. Many of these offers make dubious claims, and can entail upfront costs that exceed the results produced. Some of these promoters advertise that they can settle your tax debt for “pennies on the dollar,” which is a false and misleading claim.