Producer Page: New Year
- Created: Monday, 07 January 2019 09:05
- Written by Mark
Finally!!!---Most farmers were very happy to celebrate a New Year! 2018 was a tough one for many…..too much rain reduced yields and the grain markets didn’t cooperate either. As we look ahead to 2019, we can hope for better things, but need to take management steps to put our businesses in the best position possible. Winter is the time to review your systems of accounting, marketing, and risk management. Try to take a good honest look at everything to find weakness, as well as, strength. Write down some changes and goals for this year and make a plan to improve your operation. We all have things we can adjust and fine-tune, and in this economic environment it is really important to do so.
Tax Talk--- The new tax law has some significant changes and you will need to understand how these may affect you. Hopefully, you did some tax planning with your advisor before year end. There are changes to the standard deduction (increases) and personal exemptions (eliminated) and itemized deductions (some limitations). There is an increase in child tax credits. There is a whole new deduction for Qualified Business Income but the limitation of the Domestic Production Activities Deduction. This is a very complex issue and has many factors related to the calculation. You need to make sure you and your tax preparer understand this topic. Also big changes in how the depreciation process works, especially on the trade-in of equipment. The trade-in on many items will now be considered a sale, and the Section 179 expensing on the new item will be potentially larger. This can also have an effect on your social security tax and earnings history, so tread carefully. As always, tax simplification doesn’t really exist. There may be some opportunities for reducing taxation, but make sure you are reviewing carefully.
Insurance Insight--- Make sure you get your 2018 production to your crop insurance professional. Also it would be wise to make sure your bushels are accurate and consistent for both crop insurance and the FSA office for the tariff payment.
Government Gear Grinding--- As you know, the government is in a partial shut-down. This impacts the FSA office. If you have not signed up yet for the MFP payment (tariff payment), please stay tuned and get to the office as soon as it re-opens. Be kind to the staff once you are there, it was not their fault for the interruption of service!
Feeling Stuck??---- Farming can be stressful! While you have the independence of being your own boss, you might be feeling a lot of responsibility for things and control of very little. Finances, production, family relationships are all things that can be sources of real stress. There are people who can help! The Minnesota Department of Agriculture and the University of Minnesota have resources for you. The Farm Helpline is staffed 24/7 at 833-600-2670 extension 1. You can use the U of MN website at www.z.umn.edu/stressresources. Ted Mathews is the Minnesota Rural Mental Health Counselor at 320-266-2390 (no cost-no paperwork). Don’t forget trusted family and friends and clergy. They care. Also local medical providers are there to help at all times. Remember that you are not alone and we all need help sometimes.
Bin Buddy--- Hey……remember me? I am full of grain that you haven’t looked at in a while. Just imagine that I am full of dollar bills, and I bet you would visit me a lot more! I just might need a breath of fresh air from my bin fans. There are some quality concerns about this year’s crop, so watch it carefully!
Take care !
About Mark Warmka
Mark has worked at Peoples State Bank since 2003, serving as lead agricultural lending officer and bank Senior Vice President. He is also a member of the Board of Directors. Mark has an extensive background in the financial services industry, possessing both investment and insurance licensing and is fully accredited as a crop insurance agent.
He and his wife, Kate, an elementary teacher in Blue Earth, live on and manage the home farm near Easton. Their daughter, Amanda, is a Physician Assistant at UHD Hospital and daughter, Sara, is teaching and coaching at Fairmont Public Schools.
You can reach Mark by email or at 507-553-3155.
» More blog posts by Mark here