Filed under: Corn, Farm, grain storage, harvest, history, Holidays, repairs, seasons, Soybeans | Tags: Corn, farm, harvest, history, repairs, snow, Soybeans, year end planning
Another calendar year is coming to an end and I have been calculating the income and expenses of 2013. Part of my calculations have been estimates of the 2014 income, what the year ahead will hold for us.
So many of those calculations are tempered by past practice. We rarely sell our corn and soybeans in the year it is produced but store it in hopes of better prices of winter or early summer. That means I have to know what I have to sell and then must put an estimated price on it. Getting an accurate inventory of our crops on hand helps do that.
We are coming off of a year with fantastic prices for our crops, and despite the dry conditions we will have a good crop to sell this next year. How does that good crop pay for our expenses in a year of much lower prices.
I have been attending meetings and reading crop production and price forecasts to help me understand when may be the best time to sell our crops. Do I sell and deliver now, or sell for a future delivery date? Perhaps I should hold off on pricing our salable crops until later in the year. Do I move snow and deliver that crop in cold weather, or can I wait until warmer weather? Will the prices be higher or lower later in the year? Those calculations, along with the estimated time I will have to pay expenses, helps me determine how much help I will need in the form of bank loans.There are also the calculations to decide how much of 2014’s expenses can I shift into 2013, or perhaps we will sell some of the 2013 crop this year and move that income into 2013. The ability to move a few dollars from one year to another will help us even out our taxable income. The idea is to not have so much of a boom or bust balance sheet. I don’t mind paying taxes, I just don’t feel right paying a lot of taxes one year and none at all the next.
We have much of our 2014 fertilizer on the field now. The cooperative will hold that bill for us until next year, but if it helps me out, I can pay it this year. The same goes for repairs on machinery that have been done late in the year, or new machinery purchases that I may want to make. Is now the time to buy into some of that new technology we have been looking at, or do we wait a while.
There are so many things that need to be done at year’s end when you own a business. Getting the information to make those needed calculations is a big part of what I have been doing this holiday season.
Now 1013 is going in the books, and we can start 2014. It is another year of uncertainty. What lies ahead? We’ll know in 12 months.
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