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Showing posts from October, 2014

Managing Farm Finances in Challenging Times - Strengthen Your Cash Position

By Don Nitchie, U of M Extension Educator, Agricultural Business Management

Many business management experts agree having a strong liquidity position is very important in times of tight profit margins or to survive (hopefully short) periods of negative profit margins. What is financial liquidity? It is the ability of a business to meet current (typically within the next year) liabilities with current assets on hand. Not all current assets are the same though.

An old saying in the investment world is "cash is king". This implies the value of cash on hand in your bank account is a known amount, its price will not change tomorrow, and you can use it immediately to pay a bill, make a loan payment or as a down payment without any further action. Grain and livestock in inventory, if at market weight or market ready, are current assets and could be on your balance sheet at one price but worth something far different a few days or weeks later. So, during lean times it can be very adva…

2014 Rent Workshops: What Is a Fair Farmland Rental Agreement?

By David Bau, Extension Educator

Negotiating a fair rental agreement that satisfies the land owner and the farmer is a challenge. In these Rent Workshops, Extension Educator David Bau will provide examples, fact sheets and worksheets to determine a fair farm land rental rate for both parties.

The workshop will cover:

Farmland rental rate trends
Land values
Increasing input costs
Landlord worksheet
Tenant worksheet
Fair rent program
A rental rate that works
Flexible leases
Rental lease examples
What is a fair rental agreement?

Who should attend?

Landlords and farm land owners
Farmers and tenants
Agri-businesses
Ag professionals
Rent Workshop Schedule

11/5/14North Mankato9:30 amSouth Central College Conference Center
1920 Lee Blvd, North Mankato 5600311/5/14St. Peter

2:00 pmCommunity Center

600 S. 5th street, St. Peter, MN 56082 11/6/14Cologne9:30 amCarver County Public Works Building
11360 Us Hwy 212, Cologne, MN  5532211/6/14Shakopee2:00 pmScott County Law Enforcement Center
301 Fuller St. S., Shak…

Farmland Rental Rates for 2015 that Work for Both Parties

By David Bau, Extension Educator

I have completed two of 44 farmland rental workshops with most scheduled for November and December. The budgets for 2015 are ugly using current 2015 forward contract prices offered with both corn and soybean budgets in the red. Corn is negative by more than the average rent paid in 2014 and the farmer receiving no labor and management payment. The 2013 average rents in Southern Minnesota were $243 in the FINBIN database and the data provided by the Minnesota Agricultural Statistic Service in September listed the average rents as $227 per acre in 2013 and $237 in 2014.

Today's 2015 forward contract corn price is $3.27 and soybean price is $8.84. The record corn and soybean prices of recent years have significantly impacted land rents. Crop production expenses, farm profits and cropland rental rates all increased during the recent golden era of farming. Projected average input costs for 2015 based on adult farm management numbers for Southern Min…

Record Corn and Soybean Prices Gone, Now What?

By David Bau, Extension Educator

The record corn and soybean prices of recent years now look like a memory with much lower current prices and future market prices. Crop production expenses, farm profits and cropland rental rates all increased during this golden era of farming. Since the beginning of 2014, forward contracting prices for corn and soybeans have averaged $3.98 and $10.86 respectively. On the table below, you can see these prices are well below the last few years but above the 12 year average. The first two columns indicate the average price for corn and soybeans starting with forward contract price at beginning of year and going through September 30th of the following year a 21 month period. The next two columns list the cash prices starting at harvest (October) in calendar year and going the September 30th of the following year, 12 months. The next column lists the average rate for southern Minnesota cropland rental. The last column lists the average price as a percen…