A New Retirement Account Option for Farm Households

By: Todd Atkinson, Farm Service Agency Director of External Affairs and Jamal Habibi, U.S. Department of the Treasury Director of Outreach, Office of Domestic Finance

Source: http://blogs.usda.gov/2016/12/20/a-new-retirement-account-option-for-farm-households/

In agriculture, retirement can mean something quite different compared with other U.S. households. Often, our parents and senior relatives on the farm or ranch are far from “retired,” and, in fact, remain active participants in daily operations and decisions.

Financially, retirement in agriculture can be different, too. Compared to the general population, farmers and ranchers have a distinctive combination of assets, income sources, and saving habits, with large percentages of their financial portfolios intertwined in the business equity, all which must be carefully considered when planning for intergenerational transfers, and while generating and maintaining retirement income.

As for actual savings accounts, while 60 percent of all households nationwide participate in some type of a retirement account, just 40 percent of eligible farm households do. In fact, only 7 percent of farmers and ranchers contribute to the types of Individual Retirement Accounts (IRA) that can provide helpful tax advantages, with just 3 percent of the general population having an IRA.

That’s why the U.S. Department of the Treasury recently launched a new tool, known as myRA, for anyone interested in a simple, safe, understandable, and affordable method to start saving for retirement.

It costs nothing to open an account, there are no fees, and contributions are invested in a U.S. Treasury security that safely earns interest. You can contribute as little as a few dollars each month, or even create automatic contributions from your bank account or paycheck, up to $5,500 per year. When you’re ready, you can roll over these savings into a private sector Roth IRA at any time to continue growing your savings.

The myRA is not intended to replace existing employer-sponsored retirement plans, such as a 401(k) plan, because those accounts may offer special incentives like an employer matching payment. But if you don’t have access to a retirement savings plan, or excessive fees and complicated investment options are daunting, or perhaps you would like the younger members of your family to have better retirement awareness, then the U.S. Treasury’s myRA savings account might be an option for you?

Even if your future goal is to receive on-farm income, inheritance, or varying degrees of off-farm income such as social security, rental income, or veterans benefits, a myRA account still may be a helpful addition to your portfolio. Plus it is never too early to start saving: if you are 18 or older, not a full time student, and not a dependent, you are eligible.

So as the holidays approach, and the year nears its end, perhaps a new myRA could be a great way to take that first step towards building, or complementing, that retirement nest egg. To learn more about the program and its beneficial tax attributes, visit myRA.gov.

OSU Extension to Hold Women in Agriculture Program on Saturday, January 28, 2017 in Ashtabula County

The Ashtabula County Extension office is pleased to announce to be hosting a “Women in Agriculture” Program on Saturday, January 28, 2017 from 9:00 to 3:30 p.m. at the Ashtabula County Extension office located at 39 Wall Street, in Jefferson, Ohio.

This program is for women who are involved in the many different aspects of agriculture found in northeast, Ohio. This meeting will be our kick-off for a regular program schedule for women involved in agriculture.

Join women for a day of networking and learning about the factors which can make your business thrive. Learn more about personalities and how to work with others. Learn more about goal setting, mission statements, and improving family communication.  Together we will plan for a Women in Agriculture Program Series for 2017. Come help us plan for future programs.

Featured speakers include:

Emily Adams, Agricultural & Natural Resources Extension Educator for Coshocton County;

Abbey Averill, 4-H & Ag Program Assistant for Ashtabula County, and

David Marrison, Agricultural & Natural Resources Extension Educator for Ashtabula County.

Pre-registration is requested by Wednesday, January 18, 2017.  The cost is $20 per person and includes lunch, snacks and program handouts.  More information can be obtained by contacting Abbey Averill at the Ashtabula County Extension office at 440-576-9008.

A program flyer can be also be found at: http://go.osu.edu/ne-events

 

New & Small Farm College to be held in Lima in 2017

Are you a small farm landowner wondering what to do with your acreage?  Are you interested in exploring options for land uses but not sure where to turn or how to begin?  Have you considered adding an agricultural or horticultural enterprise but you just aren’t sure of what is required from an equipment, labor, and/or management perspective?  Are you looking for someplace to get some basic farm information?  If you or someone you know answered yes to any of these questions, then the Ohio State University Extension New and Small Farm College program may be just what you are looking for.

Ohio State University Extension of Auglaize and Hardin Counties will be hosting the New and Small Farm College this winter.  New and Small Farm College is an eight session short course that will be held one night a week on Thursdays, starting January 19 and ending March 9.  In case of inclement weather, March 16 will be a makeup session.  The New and Small Farm College will be held at the OSU Lima Campus in Galvin Hall – Room 124, 4240 Campus Drive, Lima.

Each session will start at 6:00 PM with a light dinner followed by presentations beginning at 6:30 PM and concluding at 9:00 PM.  To obtain a copy of the brochure for registration, visit hardin.osu.edu or stop by the Extension Office.  All registrations will need to be sent to Ohio State University Extension – Clinton County.

Topics that will be covered in the New and Small Farm College course include: Getting Started (goal setting, family matters, business planning, budgeting, resources); Appropriate Land Use (walk the farm); Sources of Assistance (overview of county resources such as OSU Extension, government agencies and programs, CAUV, EQIP grants); Legal, Insurance, Business Structure (fence laws, liabilities, insurance needs); Natural Resources (forestry, timber marketing, wildlife, ponds, etc.); Financial/Production Record Keeping and Taxes (balance sheet, record keeping methods); Marketing Alternatives (direct marketing, cooperatives, agri-tourism, bed and breakfast, niche markets); and Extension/Table Top Discussion (enterprise exploration of livestock and horticulture opportunities).  An additional small farm tour is being planned as part of the course.

One past participant of the New and Small Farm College said, “I recommend this program to anyone starting or thinking about farming in any area.  The amount of knowledge presented was priceless.”

The cost of the course is $150 per person, $100 for an additional family member.  Each participating family will receive a New and Small Farm College notebook full of the information presented in each class session plus additional materials.  Registrations are now being accepted through January 2, 2017.  Register early as space is limited!  For more details about the course and/or a registration form, contact Jeff Stachler at 419-739-6580 or stachler.1@osu.edu or Mark Badertscher at 419-674-2297 or badertscher.4@osu.edu.

AgricultuHER; Women in Agriculture Program Scheduled for February 15, 2017 in Paulding County

The Paulding County Extension office will be hosting an AgricultuHER; Women in Agriculture program on February 15, 2017 from 9:30 a.m. to  2:30 p.m. at the Paulding County Extension Office, 503 Fairground Drive, Paulding, OH 45879

This one-day intensive educational program is intended for the female producer or farm wife.  This class will be tailored toward farm financial management including cash rental agreements, Microsoft Excel basics, and balancing farm and family life.  A laptop computer or tablet would be helpful to be brought to this meeting.

The cost is $50 per person and registration is requested by February 1, 2017.  Lunch is included.  Registration after 2/1/17 and at the door is $75.  Paulding County resident scholarships are available to cover the cost of this event.

For more information about this program, please contact: Sarah Noggle 419-399-8225, noggle.17@osu.edu

 

 

OSU Extension Farm Management Series to be held in Frazeysburg, Ohio

Where am I? Where do I want to be? How can I get there? Producers new to farming, beginning farm managers, or farm managers who want to re-focus on the financial management of their farm business will all benefit from participating in the 2017 Coshocton, Licking, Muskingum Counties Farm Management series.  This program will help participants answer these questions by learning to analyze agricultural enterprise costs and to work with agricultural lenders.

The farm management seminar series will be held Monday evenings January 23, 30 and February 6 from 6:30 pm to 9:00 pm.  Presenters include OSU Extension educators, Extension specialists and representatives from local agricultural financial institutions.  The farm management seminar series will be held at the Frazeysburg Presbyterian Church.

Topics that will be covered in the series include:

  • Making Record Keeping Do More Than the Tax Return
  • What Is the Mission of Your Farming Operation
  • Developing Your Balance Sheet
  • Basics of Finance
  • Developing Your Business Plan
  • Farm Transition Planning

The farm management seminar series is sponsored by Farm Credit Mid-America, North Valley Bank and The Community Bank.

Registration for the workshop series is $30 and includes the program, handouts and a light supper provided each evening.  An informational flyer and registration form is available on the Coshocton County Extension web site at go.osu.edu/clmfarm.  For more information contact Emily Adams at the Coshocton County office (740-622-2265 or adams.661@osu.edu) or Clifton Martin at the Muskingum County office (740-454-0144 or martin.2422@osu.edu ). The deadline to register is January 13, 2017.  Registration is limited to the first 30 paid registrants.

Farm Financial Management School to be held in Wayne County

Wayne County Extension is hosting a 6-evening farm financial management school on Thursday evenings in January and February.   The school will begin the evening of January 12 and run six consecutive Thursday evenings through February16.  This year’s school is going to focus on helping participants to answer 3 basic financial questions:

  • Where am I (the farm) financially?
  • Where do I (the farm) want to be financially?
  • How do I (the farm) get there?

The school will be structured to include presentations, discussion, and hands-on activities.  Participants will learn how to put together and use financial documents to measure their current farm financial situation, track expenses and cash flow, make decisions to help improve or maintain the financial situation, and work more effectively with Ag lenders.  Topics that will be covered over the 6 week school include: mission statements, balance sheets, cost of production, family living expense, farm income statements, farm cash flow statements, enterprise budgets, bench marking, financial standards/ratios, record keeping, budgeting,  working with ag lenders,  marketing, and crop insurance.  Each participant will receive a 3-ring binder notebook with materials and handouts from each session.

The school will be held in the commissioners meeting room located in the upper level of the county administration building.  A light meal will be available each evening at 6:45 pm and class instruction will begin at 7:00 pm and conclude by 9:30 pm each evening.  The registration cost is $50/person.  Sponsorships provided by Farm Credit Mid-America, Farmers National Bank and Wayne Savings Community Bank are helping to cover presenter costs, mileage and materials.

Pre-registration is requested to the Wayne County Extension office at 330-264-8722 by Friday, January 6 or by email to Lisa Parker, Wayne County Extension office assistant at: parker.1269@osu.edu.   A farm financial management school flyer with a registration form is available on the Wayne County Extension web site at: http://go.osu.edu/agwayne.

Computerized Farm Record Keeping Workshop using Quicken

by: Amanda Douridas and Bruce Clevenger

Are you a farmer looking for a better way to keep your farm records? As farm size, income or debt increases, many farmers and lenders look for computer programs that allow fast data entry, have internal checks for accuracy and allow summarizing of data. Most farmers begin their search by asking “Is there a simple computer program that will keep my records like the farm account books?”

If so, plan on attending OSU Extension’s “Computerized Farm Record Keeping Workshop using Quicken”

  • February 9 & 16, 2017 – 6:30 to 9:00 p.m.
    • Champaign County Community Center Conference Room B, 1512 South US Hwy 68, Urbana, OH 43078

Quicken® software was selected as it is a simple cash system.  It’s popular with farmers due to the ease of data entry and its low price of $75 to $100. This single-entry system is essentially an electronic checkbook. It allows users to record transactions of both the farm and family, to track loans, write checks, reconcile the checkbook with the bank statement, and quickly create reports for financial and tax purposes.  This workshop will use the data from an “example farm.”  Learn how to set up accounts, categorize income and expenses, run tax reports, and prepare farm production reports.  This workshop is for participants who are familiar with keyboarding and using a computer mouse. It is a medium-paced workshop and covers a variety of farming examples to maximize the learning experience. The instructor is Bruce Clevenger, OSU Extension Educator, Defiance County.

Participants will learn about Quicken® using an OSU Computer Lab provided during workshop with Quicken® software installed.  A workshop manual/home reference will be provided.  Registration is $75.00 per farm business (Maximum 2 people per farm).  Space is limited to 10 workstations. Registration is due no later than February 2, 2017.  More information about the class can be obtained by calling the Champaign County Extension office at 937-484-1526. A registration flyer can be found at http://go.osu.edu/agevents. Light refreshments will be provided.

2016 Grain Outlook Meeting to Be Held in Plain City

by: Amanda Douridas

Low crop margins are one of the biggest concerns farmers are dealing with. Projections are for crop prices seem to change daily. Are farmland rental rates going to provide any relief? What about input costs? These are all difficult questions to answer given predicting the future impossible. Based on their experience and research, University experts will do their best to answer these questions during a series of Outlook Meetings across the state.

Extension in Champaign, Madison and Union Counties, along with the Union County Agriculture Association are hosting a Grain Outlook Breakfast at the Der Dutchman in Plain City on January 27 from 8:30-noon. The cost to attend is $10 and reservations can be made by January 20 to the Union County Extension Office, 18000 St. Rt. 4, Suite E, Marysville, OH 43040. For more information, visit: http://go.osu.edu/agevents.

Dr. Carl Zulauf will examine what the grain markets are telling us and the price and return outlook for 2017. The morning will also feature a presentation from Barry Ward on examining land values, rents, crop input costs and potential crop profitability for the coming year. Additionally, Peggy Kirk Hall, J.D., will address ten legal trends that could change agriculture.

Other locations around the state can be found at: https://u.osu.edu/ohioagmanager/

Examining Land Values, Rents, Crop Input Costs & Margins in 2017

by: Barry Ward, Leader, Production Business Management – OSU Extension

Low crop margins and uncertain land value and cash rental markets will continue to be important themes as we look ahead to 2017 as producers grapple with high per bushel costs relative to crop prices received. Less than ideal weather conditions in parts of Ohio in 2016 compounded financial stress on many crop farms however insurance proceeds and USDA ARC (Agricultural Risk Coverage) and PLC (Price Loss Coverage) 2015 payments delivered in October of 2016 alleviated the potential severe stress on many farms.

According to data from the Ohio Ag Statistics Service, bare cropland value decreased 0.9% in Ohio in 2016. According to this data, bare cropland averaged $5800/acre, down from $5,850/acre the previous year. The Western Ohio Cropland Values and Cash Rents Survey (AEDE) was conducted in January through March of 2016. The projected value for “average” cropland in western Ohio was $7,034 per acre. “Top” cropland in western Ohio was projected to average $8,853 per acre while “poor” cropland in western Ohio was expected to average $5,465 per acre. These values reflect projected decreases of 6.9 to 8.1%.

The Chicago Federal Reserve Bank October 1 survey of bankers found land values of “good” farmland were down 3% from last year with the 3rd quarter showing a 1% decrease in farmland values across the district. In this same survey however, the data revealed a year-over-year 1% increase for “good” farmland in Indiana. This is seemingly at odds with the data summarized by Purdue University.

Purdue University conducted their annual land value survey in June 2016 and found year over year decreases in farmland value that ranged from 8.2 to 8.7% depending on land productivity class. The different survey timing may explain some of the differences in survey results however the differing results lends further confusion to the direction and magnitude of farmland value change in the eastern cornbelt.

Strong equity positions (relative to pre-2006) together with continued low interest rates continue to lend positive support to land values. Low projected profit margins in 2017 will likely restrict further land value increases and possibly cause another decrease in land values. These competing fundamentals create a continued uncertain picture for land values in 2017 although continued low margins together with the potential for higher interest rates suggest lower farmland values in 2017. One wildcard is how producers choose to spend their USDA ARC or PLC payments. Will they retain this as working capital to insure against future years of low profit margins or will they stay aggressive in the farmland market?

Enterprise budget projections for Ohio’s primary row crops for 2017 indicate the potential for low margins. “Returns to variable costs” (gross revenue minus variable costs) are projected to be $188-$353 per acre for Ohio corn in 2017 depending on land production capabilities. “Returns to land” (gross revenue minus all costs except land cost) for Ohio corn remains low and ranges from -$37 to $116 per acre. Estimates for “returns to total costs” for Ohio corn in 2017 are negative for all three land classes evaluated.

Budget projections for 2017 soybeans show “returns to variable costs” to be $235-414 per acre. “Returns to land” for Ohio soybeans are projected to range from $60-$230 per acre. “Returns to total costs” are projected to be negative for all three land capability classes evaluated however these figures are generally higher than corn return projections for 2017.

Wheat budget projections for 2017 show “returns to variable costs” to be between $123 and $219 per acre. Wheat return projections are generally lower than soybeans or corn at this time however straw returns and double-crop soybean returns (where optional) may significantly improve the economic viability of raising wheat in 2017.

These return calculations assume current prices of inputs and current December, November and September 2017 futures prices, respectively. These projections are based on OSU Extension Ohio Crop Enterprise Budgets available online at: http://aglaw.osu.edu/farm-management-tools

Archived budgets are available online at: http://aede.osu.edu/research/osu-farm-management/enterprise-budgets

Strong equity positions together with higher property taxes will continue to lend support to cash rental rates however low to negative projected profit margins in 2017 will continue to apply downward pressure on rents. These competing fundamentals suggest a flat to slightly lower cash rental market outlook for 2017.

Variable costs for Ohio corn for 2017 are estimated to be 1.7% to 2.8% lower compared to 2016. Variable costs for corn for 2017 are projected to be $319 to $393 per acre. Variable costs for 2017 Ohio soybeans are projected to be 2.9% to 3.4% lower and range from $182 to $196 per acre. Wheat variable expenses for 2017 are projected to range from $154 to $184 per acre, down 9.9% to 13.3% from 2016. Lower fertilizer prices will likely be the primary fundamental driver of lower variable costs in 2017.

Outlook information presented here was developed with data and/or research from OSU Extension, the Energy Information Administration, USDA, USDA ERS, USDA NASS, Purdue University, University of Illinois, Federal Reserve Bank of Chicago, DTN, futures markets and retail sector surveys. While gauged to the best of this author’s capabilities, forward looking statements contained in this document may prove to be incorrect due to changes in supply and demand and other political and economic related events.

 

Small Farmer College to be held in Fredericktown, Ohio

Calling all small farmers and future farmers, do you have a passion to make your land profitable but are not sure of the steps to take to get there?  Well you are in luck!  OSU Extension – Knox and Morrow counties will be hosting a Small Farm College this winter in Fredericktown Ohio.

The New and Small farm college is an eight week program that will be on Monday evenings from January 9th– February 27th with March 6th as a snow date.  The class will be held at the Taste of Country Banquet Hall 128 High Street Fredericktown, OH 43019 .  Dinner will begin at 6pm, with the program starting at 6:30 p.m. – 9:00 p.m. Cost is $150 per person (additional family members – $100 each).  This price includes: 3 ring binders of resources, a soil sample, and meal each evening. Registration is required by January 2, 2017.

This amazing eight week course will offer a wide variety of topics to new and seasoned farmers.  The course teaches participants how to set goals, plan, budget, and where to find resources to help them start farming and to improve existing farming operations. This course will also show how to manage financial and farm records.  Extension Educators will cover many different enterprises that can be profitable on many acres or on as little as one acre.  Participants will learn about the benefits as well as the pitfalls of each enterprise, which will help them pick and choose what would work best for them and their interests.

The wide variety of topics that will be covered during the coarse include: Getting started in the planning process, Sources of assistance, Agricultural legal issues, Insurance considerations for the farm, Inventory of natural resources, Financial and production record keeping, Crops and Horticulture production, Animal production, and Marketing.

For more information and for registration contact OSU Extension, – Knox County, 740-397-0401, or Morrow County, 419-947-1070.