There are many reasons individuals decide to formalize their operation into a business entity. A variety of entity structures are available for business owners to use to accomplish the goals/objectives of their operation. Some operators use an informal operating joint venture instead of a formalized entity. Tax and transition planning are some of the most common goals of an entity. However, it is important to not only consider the tax implications but also keep in mind the overarching goals and strategic plan for your entity. Common Entity Types  1. General Partnership 2. Limited Liability Partnership (LLC/LLLP) 3. Corporation • [...]

The fifth and final week of the Agribusiness Management Program (AMP) Summer Webinar Series featured Bob Rhea, CEO of Illinois FBFM. Rhea presented on the elements of G.R.I.T. that farmers have demonstrated and will need to continue to focus on to ensure success of their operations. G – GRIND to succeed Each of the previous few years has brought a set of unique challenges that force farmers to grind through tough situations to make ends meet. 2020 has taught us that we all need to be prepared and flexible enough to work differently than we may be used to. [...]

The second webinar in week four of the Agribusiness Management Program (AMP) Summer Webinar Series featured Jonah Kolb from Moore & Warner Ag Group. Kolb presented on what farmers can do to grow their leased acres and position themselves to be a counterparty of choice for farm managers or investors. Before jumping into specific tips for farmers, Kolb offered some common myths that may cause farmers to lose focus in this area of their business: I don’t need to grow to survive. While it may not always be necessary to grow your acreage, some type of growth is necessary, [...]

The third week of the Agribusiness Management Program (AMP) Summer Webinar Series featured University of Illinois faculty members who presented on two important topics as we move through the rest of this unprecedented year. Todd Hubbs kicked off the double webinar with his outlooks for soybeans and corn over the next two marketing years. Paul Stoddard then gave some helpful tips on how to handle adversity, stay positive and work through these tough times. It is extremely difficult to predict what will happen in the agricultural market because of all the uncertainties right now Hubbs said to begin his [...]

The fourth week of the Agribusiness Management Program (AMP) Summer Webinar Series featured attorney Brooke Starks and Kent Leesman from Illinois FBFM in the first of two webinars. They provided helpful strategies for farmers to keep in mind as they think about the succession of their farm and assets. The focus of their presentation were things that come up often in working with clients—equipment transition planning and the intricacies of entity structures. Equipment transition planning – transfer options: 1. Piece-by-piece. This option allows the farmer to sell a portion of his equipment to a successor each year leading up [...]

The second week of the Agribusiness Management Program (AMP) Summer Webinar Series featured attorney Polly Dobbs from Dobbs Legal Group. After practicing law in Indianapolis for 12 years, Polly returned home to her family farm with her husband and two children. She is passionate about helping farm families avoid the pitfalls of estate planning by focusing on the efficient transfer of their land, buildings and equipment to the next generation. As the title of Polly’s presentation indicates, she has encountered plenty of horror stories related to succession planning (or lack thereof) throughout her career and shared a few examples [...]

The first week of the Agribusiness Management Program (AMP) Summer Webinar Series featured Jackson Takach and Zack Carpenter from Farmer Mac. Farmer Mac is a mission-based organization committed to building a vital rural America by providing credit and other financial services. In their roles at the organization over the years, Takach and Carpenter have identified six common threads that are the difference makers in creating successful farm businesses. Common thread #1: Discipline makes the business. When you think about your business, where are you spending most of your time? Carpenter suggests that good leaders spend much of their time [...]

How often have you received your tax return back with a Schedule F for your farm operation that doesn’t reflect anything close to what you had expected? Did you think “I know I made more money than that?” or “Where did all that money go?” In this article we are going to explore the reasons why your cash basis and accrual farm income aren’t the same and why understanding the difference is extremely important when making management decisions. What’s the Difference? Let’s start with the differences in the cash and accrual accounting methods. Cash accounting is exactly that—your cash [...]

Creating a balance sheet is one of the first and most crucial steps when considering the health of your farm and potential changes in your investments. A balance sheet evaluates total assets minus total liabilities, showing an operation’s net worth. The truth is that looking at the balance sheet can give clues to areas of strength or weaknesses. Keep in mind that MANY factors should be considered when reviewing the financial stability of an operation. As the manager and CEO of your farm operation, you have the ability to calculate and evaluate key financial characteristics that are found within [...]

Many make a resolution at the beginning of each year to somehow better themselves. Exercise more, eat less, stop smoking or make more time for friends and family, just to name a few. Most times those resolutions don’t last much through the first day, week or maybe month. There are many reasons why they don’t last, but one that seems to be said the most often is that there weren’t goals and benchmarks along the way. We all have goals in our production plans each year, yield goals mainly, but maybe also agronomic goals. Things like planting date, conditions, [...]