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November 29, 2021
Ag Law Issues
the appropriate
lines of Schedule F.” Of course, by reporting … by reporting CRP rents on Schedule F the payments are subjected … payments were reported on Schedule E as land rents. At the same …
December 14, 2017
Risk Management Strategies
ARC-CO) payment for wheat
scheduled for an October payment next … soybeans and sorghum are scheduled for publication on February …
August 1, 2019
Breakout Sessions
SEP = about 18.6% of Schedule F income or $56,000
… EBL = combined gains/losses of all business income (Schedule F, C, E pg 2, 4797) in excess of 510,000 (255,000 single)
… Result is an income shift from Schedule F to Form 4797○ “Sale” of trade‐in equipment results in a large positive gain on 4797○ …
March 1, 2016
KFMA Newsletters
2019. It is
currently scheduled to expire at the end of 2019 … return after receiving a Schedule K-1. In practice, this provision … itemized deductions (Form 1040 Schedule A). Kansas will allow a …
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 you …
February 1, 2013
Risk Management Strategies
topic in the RAM II
workshop scheduled for Hays, Kansas …
September 15, 2016
KFMA Newsletters
self-employed income (from Schedules C or F), certain income from … producer, have a negative Schedule F and have sold cull breeding … sales or
the amount that Schedule F is negative. If your …
May 8, 2017
Risk Management Strategies
1
Grower Options For Insured Wheat Damaged By Late Winter Storm
Monte Vandeveer (montev@ksu.edu)
Kansas State University Department of Agricultural Economics ‐ May 2017
The late winter storm which struck western and central Kansas, along with areas in neighboring states, caused cold‐
weather damage to the crop which was progressing into its later developmental stages. A publication from K‐State’s
Department of Agronomy, “Spring Freeze Injury to Kansas Wheat,” shows how wheat’s resistance to freeze injury
varies with different stages of development, along with the types of injury due to low temperature and their effects
on yield at later stages of plant development.
Another risk faced by growers is the problem of bent or broken stalks, pressed down by a foot or more of heavy wet
snow from the storm. K‐State’s Department of Agronomy issued an e‐Update on May 1 about the severe conditions
across the state and the likelihood of wheat damage. Agronomists advise that it may be several days before the
extent of damage is known in some cases.
Fortunately, most wheat acres in Kansas are insured; in fact, the state typically has over 90 percent of its planted
wheat acres covered by crop insurance. Step 1 after potential damage to the crop is always prompt notification of
one’s insurance agent.
With damage across such a wide area, the next challenge will be to schedule a loss adjustment. Once the adjuster
provides an appraisal, the acres will be released for other use. If a grower disagrees with the appraisal of the
damaged crop, he/she will need to leave intact strips in the field for later harvest and final resolution of the wheat
claim.
What would a complete loss be worth? Assume a producer has a 40‐bushel Actual Production History yield for
insurance, along with the $4.59 Projected Price (determined prior to planting) to get an expected revenue of $183.60
per acre. Combine this with an insurance guarantee level of 75% to get coverage worth $137.70 per acre for a
complete wipe‐out.
In general, insurance rules do permit the planting of a second crop when an insured first crop fails. The Risk
Management Agency indicates the following options are permitted for an insured wheat crop that has failed,
provided it had not already headed out:
…
February 27, 2018
Risk Management Strategies
sorghum, and soybean payments
scheduled for October 2018. KSU ARC-CO …