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15 - Space Weather Impact on GPS: What happened on May 10 and how will it affect farm profitability?
August 1, 2024
Breakout Sessions
Economics
https://www.swpc.noaa.gov/products/solar‐cycle‐progression
Agricultural Economics
Carrington Event - 1859
September 1, 1859 … on 10 May 2024? aka Gannon Event
May 7: Active Regions (AR) 3668 and 3664 had new growth emerged
May 8/9: Active regions 3668 and 3664 fused together, AR 3664 dominates, 7 solar storms launched
Storm 1: Launches SW of Earth
Storm 2: Full halo, very first X‐class flare from AR 3664
Storm 3: 2nd halo, and a direct Earth hit
Storm 4: Filament Launch – …
December 1, 2015
KFMA Newsletters
3
can’t prove it statistically, it would appear to me that the financial health of the average KFMA Association farm is
certainly in one of the strongest positions financially ‐ if not the strongest financial position ‐ in the 84 year history of the
Association program. I might also add that during this time period we have had some favorable income tax laws, in
particular rapid depreciation methods such as Sec 179, and bonus depreciation that has encouraged reinvestment in the
farm business and the deferment of the tax liability to some future years.
As we turn our attention to the 2014 KFMA SC data on 208 farms, and compare them to prior year’s data, there are
certainly concerns regarding some of the numbers. Accrual net farm income was $52,996, which is the lowest figure
since 2005. Nearly the entire drop in net farm income from 2013 to 2014 was attributed to a drop in gross farm income.
Total farm expense in 2013 was $458,045 compared to $455,611 in 2014. Debt per crop acre was $298 at the end of
2014 compared to $199 at the end of 2008. (Bill Collins, a retired KFMA SC Economist, used to say that farms acquire
debt in good years and pay them off in bad years. This appears to be the case once again.) Working capital dropped
from 2013 when it was $311,546 to $237,324 in 2014. As of this writing, the cash price for 2015 crops look something
like this: wheat $4.23, corn $3.56, beans $7.87 and milo $3.14. By my cost estimates (including a land charge and
machinery depreciation), and using average yields, all of these prices are below the cost of production. I recognize that
cattle prices remain high. However, the cattle influence on the average KFMA SC farm is minimal compared to grain
farming. Given the context of this price environment these 2014 numbers are of concern.
This brings me to a topic that is not focused on enough, but one I want you to become more familiar with. The term is
capital debt repayment capacity, or to use the term I have used for many years simply, debt servicing ability. How much
capacity does your farm have to service debt? Every business has a limit on how much debt can be serviced without
impairing the production efficiency of the business, or worse the financial capability of sustaining itself long term. This
repayment capacity might be defined as:
=Net Farm Income + Depreciation + Non‐Farm Income – Family Living Expense + Interest on Term Debt
You can easily calculate this for any year by looking back at past years income tax returns by specifically looking at
Schedule F. (I realize that your tax return is not accrual adjusted so looking at your profit link analysis would be a better
source.) Supplement that with Non Schedule F income, and your family living expense, and you basically have identified
the repayment capacity of your farm as it was during those past years. Looking ahead will require some adjustments;
however, as profitability going forward will not be as strong as prior years as we have already outlined. Preparing a cash
flow for the coming year will give you a better idea as to the current repayment capacity of the farm. In regards to a
family living expense number, of the 64 southcentral Kansas families that provided family living records in 2014 their
average family living expense was $71,380, before income tax.
Once you have identified your repayment capacity, make a schedule of all your principal and interest payments due in
2015. Better yet, make a schedule of your principal and interest payments for the next five years given your total
liabilities. Does your farm have enough repayment capacity to make those payments in the years ahead? Is there any
margin left to acquire new debt and add to the debt service you already have? In my opinion you need to know these
answers before you should even begin to shop for additional machinery. If you are already upside down in regards to
your debt service payments relative to your repayment capacity you need to first identify how many years this problem
persists. As an example, if your debt payments go down significantly in 2017 and come in line with capacity, how do you
survive 2015 and 2016? Do you have enough working capital to make up the difference? If not you may need to
restructure debt using land collateral to stretch out payments over 15 years instead of the 5 years the equipment
company or bank has given you.
An example of this would be a $500,000 machinery note amortized over 5 years at 3% has an annual payment of
$109,177. Compare this to a $500,000 land note with an interest rate of 5% over 15 years with an annual payment of
http://www.agmanager.info/kfma/ November 2015 E‐newsletter …
September 1, 2011
Animal ID & Traceability
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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February 28, 2012
NOV DEC
Mil. Pounds
Avg.
2005-
09
2010
2011
I-N-30
02/13/12Livestock … “Developing” trade
discussions/events --- becoming “normal”…are … Tonsor)
36
Events Summary
• State-by-State …
July 24, 2023
Ag Law Issues
resulting from an identifiable event of
a sudden, unexpected … usually quite difficult for an event to be considered a theft … McClune v. Comr., T.C. Memo. 2005-47. Obviously, with theft …
January 1, 2005
Land Rental
Rates, Leasing Papers
and Presentations, Land Leasing
Forms
this 20th day of November, 2005.
/s/ John Brown
John … the tenant on February 1, 2005, fixing termination
of the … of the lease on March 1, 2005. No fall-seeded crops are …
August 3, 2016
Livestock Insurance, Breakout session presentations
Drought is significant: major event 1 year in 5?
How much land are we talking about?
15.5 million acres of permanent pasture
308,000 acres of woodland pastures
2.2 million acres of alfalfa, tame & wild hay
18.0 million acreseligible for PRF
Source: 2012 Census of Agriculture
How much is 18 million acres? How many are insured?
Crop …
March 1, 2009
Animal Well-Being
8
Pork
Poultry
Beef
Westland/Hallmark; Chino, CA Event:
LexisLexis--Nexis Media … 2003 2004 2004 2004 2004 200520052005 …
November 26, 2010
8
Pork
Poultry
Beef
Westland/Hallmark; Chino, CA Event:
LexisLexis--Nexis Media … 2003 2004 2004 2004 2004 200520052005 …
March 2, 2018
2018
Data Source: USDA‐AMS
Livestock Marketing Information Center
Beef Basis, Salina, KS
2018 Projections
(as of 3/1/18):
Oct. 17: $172
$285.63
$203.51
$138.44
$170.66
$154.50
$152.50
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2003 2004 2005 2006 2007 2008 2009 2010 …