We live in a global market place with corn flirting with $7.00/bu and beef and dairy prices increasing, in part because of export demand. The new crop season allows farmers to take advantage of these higher prices, but they also face higher prices for inputs including fertilizer, fuel, machinery, feed, and all forms of technology whether in seeds or vials. Farm business managers need to develop record systems on information that allow for quickly calculating enterprise profitability and ranking of alternatives based on potential profits. Basic enterprise budgets from Cooperative Extension can be updated to address the individual needs of a farm business. To properly use budgets all information should be changed to reflect your farms costs, yields, and prices. To find an example of an enterprise budget for Virginia see www.pubs.ext.vt.edu/category/enterprise-budgets.html. To locate enterprise budgets from all over the U.S. visit the Ag Risk Budget Library at www.agrisk.umn.edu/Budgets/CustomSearch.aspx. Careful use of enterprise budgets will give managers a chance to bring the complexities of the global market into focus as you help make production decisions.
Listed below are the items that need to be included on the farm business managers' calendar for spring of 2011.
- Make sure your Virginia state income taxes are postmarked by May 1.
- Review first quarter livestock records and compare them to last year’s; look for problems and successes.
- Livestock producers should develop a detailed feed budget each year. Include current feed costs, estimate this year’s production under average and drought conditions, and estimate demand until spring of 2012. Deficits should be addressed now. First, look locally for alternatives. For example, can you contract with a neighbor to buy their forages or grains, can you rent additional land, can you work with a grain farmer to harvest his grain crop as silage, can you buy grain at harvest at a discount, consider high moisture grain, and so on? Second, if you cannot find local solutions then look to reputable brokers for forages and try to line up part of your supply needs this spring. As the season progresses, keep the budget up-to-date to make sure you have covered your feed demand one year out.
- Follow up with your lender to review and update your line-of-credit needs because higher feed, fuel, fertilizer, and input other prices may strain previous estimates.
- Prepare a crop record keeping system for a new year.
- Update your marketing plan by collecting information on prices and world market situations. Be sure to check with your local Farm Service Agency for changes in government programs and signup deadlines. Review USDA and other crop and price forecasts. You can receive notification of all USDA reports now via many different media. See the following web site for details: www.usda.gov/wps/portal/usda/usdahome?navid=USDA_STR