Alabama Cooperative Extension has created a Farm & Agribusiness Management team of regional agents to be a resource for business and economics related questions producers may have. With decisions increasingly tied to analytics and trying to decide what makes sense financially, the farm and agribusiness agents are available to provide information that will help in making those decisions. Information can include:
- How to create a business plan for new or beginning farmers.
- Bookkeeping and tax information to ensure records are accurate while being informed and taking advantage of existing tax law.
- Enterprise budgets for producers to use and plan their year.
- Assistance with marketing through social media and other strategies to increase awareness of the business.
- Transition and estate planning information is available and lastly, a specialized farm financial tool that will provide detailed analysis and insight into a producers business.
The farm financial analysis tool is through software called FINPACK, a business application used to examine a farms financial position. This was developed by University of Minnesota’s Center for Farm Financial Management as a way to help producers analyze their current position, plan for the future and have data on the financial health of their operation.
There are several options available to producers who are interested in having a FINPACK review. Not only will the software produce common financial statements such as a balance sheet, cash flow, and income statement. It will run ‘what-if’ scenarios for farms to see how their business could be affected by various situations. For instance, the 2016 drought that impacted much of Alabama, if a producer had their information within the FINPACK system, they could contact Extension and see the effects on their operation for increased feed costs, additional cattle being sold or any other sales or expenditures they are considering. Another example, a producer that has always produced strawberries may be interested to see what would happen if they shifted some of their strawberry production into blueberries, the FINPACK project will be able to run several different scenarios changing parameters such as price, acreage, expense and market conditions. Projections are not guarantees but more information on financials can help producers make informed decisions.
If you would like to have a review, a balance sheet and budget are information agents need in order to be able to complete the analysis. Farm and agribusiness agents are available to help producers create these items to be ready for a review. As with all Extension programs, the information and service is free or low-cost in an effort to provide impactful research-based education to communities. Additionally, all financial information will remain private to the producer and the agents working to complete the review.
As livestock producers get ready to file their taxes for 2016, they may consider discussing cattle sales with their accountant. The IRS provides tax relief in events like weather disasters and this past year much of Alabama was affected by the drought. We know because of the drought, producers had to manage animals differently. Either additional purchases of feed were necessary or additional livestock were sold in order to consume fewer resources. If producers decided to sell additional livestock, the IRS provides tax breaks and ACES has information on that. Your local livestock agent, Sarah Dickinson, is a great resource for information to manage the animals or land and your local agribusiness agent, Kevin Burkett, has additional information on taxes and any other items in this article.
Agriculture producers in Alabama may be interested in learning more about Alabama Cooperative Extension’s new farm and agribusiness management team by contacting their local Extension office.