Farmers hoping for some consistency in the grain markets for the remainder of the year may be disappointed.
During a presentation at this year’s Farm Science Review, ag economist Dr. Matt Roberts told attendees to expect a tremendous amount of volatility during the upcoming months. He also emphasized that anyone involved in the commodity market should keep his or her attention on just about everything.
Many factors can affect whether the markets go up or down, including the state of the harvest, late planting, conditions at pollination, weather and one that you may not expect — world events.
Roberts said that it is estimated that there is a one in three or one in two chance that the U.S. could slip into another recession because of world events. He also stated that the Greek debt crisis is a contributing factor to the inconsistency of the grain markets and that if the global economy slips back into a recession, then the demand for grain and prices could decrease.
According to a Farm and Dairy article, German and European banks are some of the largest holders of the Greek debt and if they are not able to balance their books, then the residents in these countries could be affected. This would mean cutbacks in their budgets and more specifically, there could be less livestock to feed and therefore less grain needed.
This notion also holds true for China. If the European Union and the United States slip into a recession, it could mean that China may need less grain because its economy may not grow as quickly as it does today. This may mean fewer Chinese consumers would be able to afford the quality of food that they have now, which would mean less grain for livestock and possibly less soybeans for the rest of their diet.
There is some positive news that farmers can take from this — When there are economic doubts worldwide, people still lean toward America.
“When things go sideways in the world, people still put their trust in the U.S.,” said Roberts.
It will be interesting to see what the future holds for the grain markets. What do you think about the outlook for the remainder of the year? Will it affect you directly or do you know a farmer(s) who may be impacted by it?
Photo obtained from: oklahomafarmreport.com
Farmers were lent a financial hand when Congress passed tax incentives, from $250,000 to $500,000, for new and used farm machinery as part of the Small Business Jobs Act in 2010.
Another ancillary bill, The 2010 Tax Relief/Job Creation Act, created a 100 percent bonus-depreciation allowance for new farm assets purchased after Sept. 8, 2010 and before Jan. 1, 2012.
“Just because checks have been written for the item that you’re buying, it isn’t good enough; it has to be present on your farm by that date,” said Rob Holcomb, a University of Minnesota agricultural business management extension educator in a Farm Industry News story.
Farmers must ensure that their new assets are either on-site or are in service before the tax expiration date.
Besides assisting farmers with substantial business costs, the bills were also responsible for inciting a surge of the agricultural equipment industry.
These tax breaks terminate at the start of the new year, making farmers’ year-end tax planning more difficult.
According to an Agriculture.com story by Gary Maydew, these tax breaks have three important implications for farmers’ year-end tax planning:
- Faster equipment write-offs: Before passage of the bill, the maximum amount that could be expensed in 2010 (the Sec. 179 expense allowance) was $250,000. The Act increased the limit to $500,000 for both 2010 and 2011.
- Health insurance complications: For 2010 only, farmers could deduct health insurance from their self-employment income to determine their self-employment tax.
- Reporting requirement for farm landlords: Farm landlords, like operating farmers, issue Form 1099 Misc. to vendors for whom they have paid more than $600.
“They are tools that really do stimulate the economy and that’s what lawmakers want right now,” said Paul Gervais, a farmer quoted in a Farm Industry News story.
Farmers are hoping that Congress will reinstitute the tax incentives, but given the circumstances of the economy, it’s no guarantee.
Holcomb notes that farmers should always check with their tax professional to learn how any tax-law changes might impact their bottom line and should also exercise caution when purchasing machinery that won’t be delivered by the end of the business year.
Have farm-machinery write-offs helped you or a farmer who you know? Should Congress work to extend both pieces of legislation?
Photo obtained from: elease.com
Agricultural shows have been happening for years. These public events showcase everything from equipment and animals, to sports and recreation associated with agriculture and animal husbandry.
The Farm Progress Show, held a few weeks ago in Decatur, Illinois, is the nations leading outdoor agricultural show and features the most extensive state-of-the art information and technology available for today’s agricultural producers.
Additional agricultural shows throughout the country include:
• National Farm Machinery Show in Louisville, Kentucky
• American Royal in Kansas City, Missouri
• Pennsylvania Farm Show in Harrisburg, Pennsylvania
• National Western Stock Show in Denver, Colorado
In Ohio, we have the Farm Science Review (FSR), which is sure to exceed attendees’ expectations this year.
Taking place September 20-22, this year's review theme, "Where Farmers Go to Dream," will emphasize agricultural innovation to spark new ideas and long-term visions for the agricultural industry.
Farmers can expect to view 4,000 product lines from 600 commercial exhibitors and learn the latest in agricultural research, conservation and technology. Field demonstrations will also take place despite the heaviest rains in the state in more than a century.
“We were able to have all of the corn and soybeans planted by June 8, so it’s possible that, depending on the weather, the crops may be ready for harvest during the Review,” said Chuck Gamble, Farm Science Review manager. “Regardless of whether we’re harvesting at that time, attendees will see field demonstrations like tillage and GPS.”
Additional highlights include:
- The latest in agricultural technology
- Livestock-handling equipment
- Grain and machine storage and other outbuilding structures
- Natural-resource practices and programs
- Demonstrations of drainage systems (if the harvest takes place)
For more information and a show schedule, visit http://fsr.osu.edu.
Have you attended or exhibited at Farm Science Review in the past? If you plan to attend this year, what are you most interested to see and/or learn about?
Photo obtained from: http://fsr.osu.edu/
Family vacation spots run the gamut from resorts, amusement parks, national landmarks and now … farms? Agritourism, as defined by Merriam Webster’s Collegiate Dictionary, is "the practice of touring agricultural areas to see farms and often to participate in farm activities." It’s a unique intermix of culinary, ecotourism and educational experiences. “It’s a sensational option for families with children of all ages, as it offers a true hands-on opportunity to explore working farms and ranches,” said Julie Bielenberg in her SheKnows article. Agritourism Examples
- Seasonal attractions: pumpkin farms, tree farms
- Food-processing facilities: honey, jam making
- Ranch operations: milk a cow, lasso a bull
- Generates additional revenue for local businesses and services
- Upgrades/revitalizes community facilities for residents and visitors
- Increases protection of rural landscapes and natural environments
- Preserves/revitalizes local traditions; promoting inter-regional, inter-cultural communication and understanding
- Promotes the ongoing use of local agricultural products and services
- Diversifies and strengthens the rural economy via job and income creation Provides a more energetic business environment for attracting other businesses and small industries to a community