Archive for the ‘Crops’ Category

Spending Money to Save Money. Farm Style.

It’s a funny thing.  Spending money to save money, that is.  As consumers, it’s easy to get sucked in by marketing schemes such as “buy one, get one,” or “spend $100 and save $25.”  I’m pretty sure if you posses a debit card, you are guilty of buying stuff you weren’t planning on buying  just to “save money.”  And most of us get home after doing something like that and roll our eyes when we realize what we did.  Well, spending money to save money on the farm isn’t quite the same, but it’s a similar concept.

Instead of tying our money up in a Washington bureaucracy, we gave some to this farmer, for his tractor. And he is going to turn around and buy another tractor with it, stimluating the economy in our own way. 🙂

Well, if you’re a business owner, chances are you’re familiar with an accountant and tax accounting, and you see where I’m going with this.  A couple weeks before the end of the year, Justin and I paid a visit to our accountant.  We had what’s called a pre-tax planning session.  Essentially, the accountant looked at how much money we had taken in (income) and how much we had spent on business expenses.  Take the income minus the expenses, and you have our taxable income.  Taxable income is what Justin and I have to pay our family expenses such as food, shelter, and transportation.

We don’t get much control over the prices we receive for our crops and livestock, nor do we have a lot of control over the costs of caring for those crops and livestock.  This means our taxable income varies wildly from year to year.  Some years we will make a lot of money, other years we will make no money, and some years we will lose money.  In the years we make a lot of money, it is advisable to spend it on business expenses before the end of the year, to reduce our taxable income and therefore our tax bill.  In the years that we make no money or lose money, we will attempt to sell some crops or livestock before the end of the year to give ourselves some taxable income.  It is desirable to try to keep our taxable income with a reasonable range from year to year.  At least, that’s our philosophy.

Well, this year was a good year.  A very good year.  Our income was considerably higher than our expenses.  Which means we had to spend some money or give a huge chunk of it to Uncle Sam.

Think of it this way…

Instead of getting a tax refund, you owe the government $10,000 in taxes on April 15th.  But, you could invest $7500 in your IRA or 401K and only owe $2500 to Uncle Sam.  Which would you do?  Invest the money and pay $2500 or just give the whole $10,000 to help reduce the federal defecit?  I have a pretty good hunch that most would choose to invest in themselves.

So….we purchased a tractor and grain cart as opposed to sending an exorbitant amount of money to our representatives in Washington and Des Moines.  Don’t worry, we will still have a taxable income and will be sending in a healthy chuck of money to take care of our patriotic duty to pay taxes as well as operate our farm more efficiently.

See Russell down by the tire?? The grain cart we bought is huge!! It holds one and a half semi's worth of grain!

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Smells Like Money?

MANURE-- Nutrient rich, and downright pungent at times.

If you have ever taken a drive through rural America, chances are that you have heard the expression, “smells like money!”  This phrase is often used when an less than pleasant odor is present in the air.  Namely, manure.  Smells from livestock farms are plentiful and mostly unpleasant, I’ll admit.

Some would like to attribute this issue to the concentration of livestock facilities, modern confinement systems, and larger size of today’s farms.  I must disagree with this.  Livestock has always stunk.  Especially if they live outside, and after a rainstorm.  In the past, when there were more farms, there were more opportunities to get a whiff of “the smell of money.”  Without getting too technical, I will share a childhood memory of the hogs my dad used to raise and the distinct odor they left in everything in the house.  These hogs were raised outside, and if it had rained recently and the wind was in the right direction, you most certainly didn’t want to open the windows.  This was a year-round issue.

On the other hand, today I live less than 1 mile from our confinement hog buildings, which contain far more pigs than my father had.  There are only a couple days per year, when we are applying the manure to our crop land, that I smell them.  I attribute this to the fact that the manure is stored under a roof with ventilation systems to keep the odor to a minimum.

Now that crops are coming out of the fields, it's time to rejuvenate them with a little cattle manure.

Which brings me to another point, how the manure is applied differently today as compared to days past.  For the liquid hog manure, we will inject it into the ground, which keeps the smell down.  It also maximizes the nutrients from the manure that are available to the plants.  We factor in the nutrient content of the all the manure (hog/cattle, liquid/dry) we apply, which ensures we don’t over-apply it and put too much in any particular area.  Again, keeping the “eau de livestock” to a minimum.

Of course, management of a livestock facility is important in many ways.  Other practices that address odor management on a farm include, scraping and hauling the manure from outdoor lots in a timely manner, maintaining fresh bedding, containing run-off, proper storage of feedstuffs, proper handling of dead animals and compost, and proper storage and containment of manure.  It is important that we do all of these things on our farm to ensure it is a pleasant and safe place for us to raise a family, as well as give the livestock the utmost in care, which in turn provides food processors a quality commodity which will ultimately nourish other families.  

Before scraping and cleaning the manure from the yard.

And after cleaning the yard with the skid loader.

I’ve listed the specific things we do on our farms to keep the smells under control, but there are other cutting edge things happening out there.  Research is being done on feed additives and feed ration formulations that are aimed at reducing odors.   I’ve also heard of products that can be applied to the manure after it has been contained.  So far, nothing has become an industry standard, but perhaps, someday.

While I cannot argue that the smell of money is a pleasant one, I will say that I have gotten used to it.  We have 150 steers that live , quite literally, in our back yard.  And my windows are open anytime the weather allows.  I do this because the smell of freshly cut hay,  the sweet aroma of corn silage, and a cool clear breeze blowing through the house outweighs the possibility of an occasional whiff of cow poo.  Which, quite honestly, I really don’t mind that either.  Which is something only a true country boy or girl can relate to.  Think, the smell of the livestock barns at the fair, or the sale barn.  It takes you back, and is a reminder of the hard work that has brought you to the point in your life where you can appreciate it.

My little manure haulin' helper.

Our Farm Family Honors Earth Day

Our livelihood as farmers, as well as future generations, depend on the care we give the planet.

“Every day is Earth Day for a farmer.”

Heard that before?  Yeah, I’ve heard it a million times.  It’s true, taking care of the earth is job#1 here on the farm.

Let me prove it by linking to a few articles I’ve written in the past:

Recycling on the Farm

Every Day is Earth Day

Manure…A Precious Commodity

And some common sense things we do in our family life:

Garage Saling, the Ultimate Recycling!

Cooking from Scratch and in Bulk to Avoid Eating Out

Buying Groceries Once Per Month in Bulk

We have been entrusted with the land, and we must ensure that it is well cared for.

Taking care of the planet isn’t something we should think about once per year, it should be a part of our daily lives.     

Farm Subsidies, A Farmer’s Perspective.

We must know exactly how much grain is in a bin before "putting it under loan" in the marketing assistance loan program.

Today I want to (attempt to) set the record straight when it comes to farm subsidies. I’m going to present some facts, and some opinions. I’m also going to “reveal” what my husband and I have received from the government and why. (I put reveal in quotations beause it’s all public knowledge.  Don’t belive me?  Click here.) I understand that not everyone is going to agree with me on this. But that’s ok, it’s what makes us human, and what makes us all great. It also doesn’t mean I should keep quiet about it. Everything I share today is public knowledge, I’m just going to put it here in one place with an explanation behind it.

I must preface this by saying that my understanding of the farm bill and all it’s intricacies is limited. While I do feel I have a handle on it,  it is a very complex, and ever changing thing. Often I get the impression that even the employees of the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS) feel the same way.  Anyway, this is my perspective of the farm program, administered by the federal government as a part of the farm bill.

The farm program mainly focuses on grain production, not livestock.

First, a very simple explanation of farm subsidies:

Most of the cropland in Iowa is a part of the farm program.  When a farm is enrolled in the farm program, there is a plethora of paperwork and rules regarding conservation that must be followed.  Farmers must report exactly how many acres of each crop they plant, and where.  They must develop and follow a conservation plan with NRCS staff.  Grain bins are measured, and yields are recorded, and turned into the FSA office.  Farmers receiving subsidies must prove that they are “actively engaged” in farming.  In exchange for complying with the program, the farmer or owner of the land is eligible for financial incentives from the federal government.  There is a variety of programs within the farm bill.

The most talked about program is what is referred to as direct payments.  Direct payments are a lump sum of money, calculated on a per acre basis, that is paid to the farmer.  The formula used to determine the amount paid is based on the productivity of the land.  We receive roughly a $20-25 per acre direct payment.

And then there is Counter-Cyclical Payments (CCP).  This is also based on productivity, in addition to the yearly average price for grain (as determined by the federal government).  In recent years, we have not received a CCP, because grain prices have been higher than in past years.  The trigger price for CCP is around $2.25 per corn bushel.  CCP will get higher as the price of corn gets lower.

Next comes the more optional programs, LDPs and Marketing Assistance Loans (MAL).  LDPs have been obsolete the last few years, again, due to higher prices.  But, Justin and I do take advantage of the MAL program.  Basically, when we need money to pay bills, but don’t want to sell our grain for a low price (prior to May 30), then we can “seal” the grain, which is essentially handing over the title to the grain to the Commodity Credit Corporation (CCC).  We will then receive a loan in the amount of the set loan rate per bushel.  For example, I “seal” 10,000 bushels of corn.  I receive 10,000 (bushels) x $1.84 (per bushel county loan rate) or $18,400, as a loan.  I then use the money to pay bills.  Then I have 9 months to repay the loan plus interest (“buy back” the bushels), the title to the grain is turned back over to me, and I can sell it when prices are (hopefully) better.  I really like this particular program, because it is not a true susbisdy, it is simply a low interest loan, and it really helps us out.

A few other programs that make up the federal government farm program include the Average Crop Revenue Election (ACRE) program, the Supplemental Revenue Assistance (SURE) program, Conservation Reserve Program (CRP) and Conservation Security Program (CSP).  ACRE is meant to replace the DCP, and CCP.  SURE is for crop disasters.  CRP involves letting enrolled acres sit fallow for 10 years.  Finally, CSP is all about improving conservation practices.  I won’t even begin to explain these…google them if you’re bored!

The last, and most important piece of this gigantic puzzle, is crop insurance subsidies.  The government subsidizes crop insurance, based on a hugely complex formula, based on percentages.  Basically, it makes crop insurance a viable, affordable option for farmers, and protects us from crippling crop and financial losses, and helps us to stay in business. Crop insurance, in and of itself, is another horribly complex animal….which I will address sometime down the road.

Each category of subsidy has a maximum amount that can be paid to one individual.  If a farmer is found to be out of compliance with any rules, they can be made ineligible for the program.

Simple explanation, right?  Clear as mud?

The NRCS helped lay out these hay buffer strips, as a part of a conservation plan.

My views on farm subsidies are simple.  Direct subsidies are a waste.  Sending a farmer a check in the mail for participating in the conservation program is an inefficient use of taxpayer money.  There are better ways to incentivize participation in conservation compliance programs.  Personally, I’d like to see more emphasis on crop insurance and marketing loan programs.  Regulations must be kept tough on those that are out of compliance, and eligibility for crop insurance (as well as other programs) should be tied to conservation compliance.

Lastly, I would be remiss if I didn’t point out that farm subsidies are a small part of the farm bill.  A whopping 84% of the farm bill is food assistance programs, such as food stamps and WIC.

I’ve only skimmed the very tip top of this subject.  If you want to know more, take a gander here:

Farm Services Agency, Iowa

Natural Resources Conservation Service, Iowa

Commodity Credit Corporation

My apologies if I’ve gone too far over anyone’s head….this stuff is confusing to me, and I deal with it on a regular basis!  I do hope that maybe I’ve shed a little light on this subject, anyway.  If you have any questions, I will try my best to answer.

Terraces are another method for prevention of soil erosion, and keep us "in compliance."

One Year Ago….

I posted my first post to this blog!

Read it by clicking here: http://iafarmwife.com/2010/03/31/and-in-the-beginning/

It’s hard to believe I’ve been at it for a year.  But, then again, it feels like I’ve been doing it forever, too!

To celebrate this milestone, I’m going to do my very first giveaway!

Up for grabs is a $50 gift certificate to go towards a custom metal gift of your choosing and design from Schares Metal Works! Schares Metal Works is owned and operated by my close friends, Corinne and Jake Schares.

Corinne has been my bestest friend since before either one of us can remember.  We went to school together.  I even followed her when she moved away in 1st grade, I moved away to the same town  a year later, just a mile down the road from her.  We rode our ponies and horses all over the countryside, and have countless stories about our adventures. (One of the the most memorable being when we were in 5th grade and raced our horses around the school’s track and thought we got away with it….until we were called to the principal’s office the next day.  But that’s a story for another day!)  My friendship with Corinne could provide subject matter for many many blog postings, let’s just say that.  🙂

Anyhow…back to the giveaway.  Corinne and Jake can custom cut just about whatever you can imagine out of metal.  Here are a few examples:

3D Name

3D Football Helmet

3D Farm Sign

Lighted Signs!

 

Outdoor, custom welcome signs! Seriously, your imagination is the limit!

Look at the detail! Corinne and Jake made this sign for me and my siblings to give to my Dad & his friend, Deb, for Christmas. I couldn't be happier with how it turned out!

Cool, inspirational words...would make great gifts.

Love these, wouldn't they be a great wedding gift?

Honestly, go check out their website at www.scharesmetalworks.com!

You will be fascinated by their creations, I promise!  Make sure you pay a visit to the gallery, where they show how they can turn any picture into a custom metal display!

So, in order to enter the giveaway, please comment on this post and answer me this question:

“What agricultural topic/rumor/question would you like to see me address?”

I will use a random number generator to pick the winner.  Please, share my blog and Corinne & Jake’s website with your friends!!

Thanks so much for reading!

Liz

Factory Farmed Animals Live in Horrible Conditions and GMOs Will Kill You!

These poor cattle will spend the rest of their lives lounging around, being served food, and having their bedding fluffed. Such a rough life they will live in confinement.

I often find myself in a predicament.  This usually happens when I go looking for trouble.  Somewhere out there in cyberspace, someone will post an article about “Big Bad GMOs,” or the horror of “Factory Farming.”  Inevitably, the comments on these sorts of things are filled with hatred and inaccuracy.  There is always mention of “greedy industrial farmers who only care about making money while ruining the environment and confining animals.”  As a farmer who raises livestock and crops with so-called “industrial” methods, these things always get me going, and they always put me in a difficult situation.

I will reply (yeah, I know, glutton for punishment) by posting a comment to the tune of, “As a farmer who uses modern methods of livestock production, I get tired of people telling me that I treat my animals poorly and my crops are poisoning people.”

And the response almost ALWAYS is something like this:  “Well, I’m sure YOU don’t treat YOUR animals badly.  But INDUSTRIAL agriculture does, they cram their animals into CAFOs and they rob GOOD farmers like YOU from making a living.”

And that, right there, is where the gigantic disconnect between the consumer and the farmer comes in.  I’m still not sure how to bridge this gap.  I often envision myself taking said cyber-person by the shoulders and shaking them.

Here’s the deal.  I AM “INDUSTRIAL” AGRICULTURE!!  Along with thousands of other farm families working hard to feed the population.  When you say “CAFOS ARE EVIL!” You are telling me, my family, and the people that we work with that we are evil.  The animals we raise get sold to “BIG BAD CORPORATIONS” such as Tyson and Hormel.  We buy our GMO seed from Monsanto.  Our livestock is raised in confinement.

These resting pigs have it pretty rough too. When it's below zero outside, they have to relax in a temperature controlled barn. Their feeders have sensors on them that ensure they have access to unlimited feed. The floor allows their manure to drop into a pit below them, keeping their pens clean.

So, if I do decide to push the issue with these people who feel that all farming should look like it did in 1950, they will then proceed to tell me that they pity me.  That the EVIL CORPORATIONS have FORCED me to accept their ways and raise an INFERIOR, INHUMANE, and TOXIC product.  Clearly, I, as an individual, must be STUPID to not see it.  If I was smart, I’d choose to raise my crops and livestock without chemicals or confinement.

And here is my disclaimer, as I have stated before, I do not mean any disrespect to farmers who choose to raise their produce differently from me.  There is no one perfect way to farm, and I know that the vast majority of farmers, and food industry workers, are good people working hard to provide a quality, abundant food supply.

See, when it comes to a debate, many humans have a really hard time telling each other one-on-one that we have a problem with each other’s individual actions.  Especially, when we’re not 100% confident about what we’re debating.  It’s so much easier to throw up a scapegoat, like a faceless corporation, than to tackle an issue on a individual level.

Can you believe it? I let my son touch our GMO corn! But for some reason, he's still healthy and growing.

So, If I am really feeling feisty, I go on to say “I make the choices I make because I am confident that they are the best choices for me, my farm, my family, and the consumer. I educate myself about the applications and consequences of everything we do on the farm, and I am comfortable that the product I provide is safe, environmentally sound, and nutritious.”

And then, I’m told I am a fake.  I can’t possibly be real.  The “BIG CORPORATIONS” have brainwashed me and I am a paid fake.  And if I am real, then I have destroyed their faith in humanity.  Because it just can’t be possible that there’s more to agriculture than what Michael Pollan (the director of the horribly biased Food, Inc and author of The Omnivore’s Dilemma) told them.

Agriculture is my family's livlihood....and our way of life. So, yes, I do feel threatened when it comes under attack.

Here is the truth.

The animals my family cares for are raised in CAFOs and FEEDLOTS.  They are comfortable and they do not suffer, and we work our tails off every day to ensure that.  The animals’ comfort always comes before ours. The hormones and antibiotics that they receive are given in a prescribed manner, under the direction of our veterinarian and feed specialist, according to USDA rules and guidelines.  I fully understand how these products work, and do not hesitate to feed my family the beef we raise.

My son rides in the tractor with his dad. He is adamant that he is going to be a farmer when he grows up.

Our crops are GMO and we use chemicals.  We live right in the middle of the farms where we grow our crops.  My kids play in the yard right next to our crops, they help with the planting and harvest of them.  We follow several guidelines and rules set forth by the USDA to ensure that the crops we grow are safe.  Using GMO technology has allowed us to produce more crop with less fuel, chemical, and water.

Now, if you choose to buy organic, local, or pasture-raised produce, (or whatever the latest food buzzword is) that is completely your choice.  Please, just don’t do it while saying that our “FACTORY FARM”  is inferior, because, I ensure you, we are not.

I feed my kids the beef we raise using antibiotics and hormones because I know that it is safe.

I do not hesitate to feed my family our beef (which is also sold to Tyson) and I do not care if the food I buy in the store contains GMOs.  I am confident that the US food system is reliable, safe, and continually improving.

I don’t deny that there are issues, there always will be.  I’ll admit, there are some things that I see happening in agriculture and food production today that concern me.  I am glad there are skeptics out there, because nothing should ever progress unchecked. I have faith that we will work through these issues and come out better because of it.

I do know that I am glad to be living in today’s day and age, where food-borne illness is so rare that it makes the news, as opposed to years past where it was a common cause of death.

So, back to the difficult situation I put myself in.  Reacting to bad information about farming puts me on the defensive, by default.  And for some reason, people are particularly skeptical of defensive people. At least, I know I can be.

I’m pretty defensive, aren’t I?  I’ll admit it.  Agriculture has been under attack lately, and it seems like every day there is some new piece of misinformation out there.

So….

How can I not defend the way of life, the “BIG BAD INDUSTRY”, that I love?  How can I not reach out to consumers and show them that what my family is doing is not going to harm them, the environment, or the animals?  How can I not begin to take a proactive approach to this problem of misinformation?

The End of Year Paperwork Scramble

The filiing cabinet where I keep all our records.

On the farm, the end of the year is a hectic time because it signifies the end of the business year.  Much time is spent reviewing the past year’s expenses and income and compiling those numbers into reports.  Farming is a business,  it requires that we occasionally take time  to review such things.

Usually some time in November we will receive a big packet in the mail from our bank.  It includes two things.  A cash flow statement and a balance sheet.  They include figures we used last year, and blank spots to fill in for this year.

The bottom stack is expenses. The top stack is income. Isn't that just life??

The cash flow statement is a prediction of how much and when money will be spent and received over the next year.  Basically, a budget.  It is used to determine how much money we will need to “fill in the gaps.”  Some months on the farm, we spend way more than we bring in, and vice versa.  For the months where we are short of money, we use an operating line of credit at the bank to ensure that our bills are always paid on time.

So, we must review how much grain we have in the bins and when we will be selling it, same with the cattle.  And, we also have to predict how much we will be spending on things like feed and seed and when.

Then, the balance sheet.  It tells us how much our assets are worth and weighs our debt against that.  We must list out all of our livestock, land, grain, and equipment as assets, and then list out each loan we have against those things.  The difference between what we own and what we owe is called equity, or net worth.  Net worth is what the bank uses to determine how much money it is willing to loan us.  It also helps us determine how much money we are comfortable borrowing.  We won’t borrow more money than what our assets are worth.

Stuffed to the max! Glad I get to clean it out and start new.

So, as if that wasn’t enough to worry about completing, there is also tax planning to worry about.  We need to make sure we have all of the expenses we incurred and income we received recorded and compiled to take to the accountant.  He will then help us sort through it, and determine whether or not we should spend money or find some income before the end of the year, to keep the tax bill within reason.

My relationship with our accountant is definitely a love-hate relationship.  I hate the complexity of the tax system, and I love that he understands it so well and keeps us on the straight-and-narrow with Uncle Sam.  The accountant will also find helpful things in the tax code, such as rules that allow us to deduct IRA investments or health care expenses. He’s an excellent source of guidance when it comes to paying self-employment taxes and social security.  He’s pretty good at finding mistakes that I have made throughout the year in coding expenses and income too.

This is how I feel before paperwork.

This is how I feel after paperwork.

My relationship with bookwork, in general, is love-hate.  I dread the thought of sitting down and muddling through all of the paperwork and entering things into the computer, but once I get into it, I love knowing where we sit financially.  Sometimes it is comforting to see where the farm is financially, and sometimes it is concerning.  Either way, all the paperwork is a necessary evil on the farm, and I’m glad to have professionals like our accountant and banker to help us out with all of it.

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