Financial Conversations with Fitz #82 - The Crop is in, Now What Do We Do? - 10/24/2010
Corn is 95% out. One of the best harvest weather I have seen for a long time. Little short in the bumper yields…..Starting to look at some moisture inn the next couple of days. Grain Prices are still volatile is for sure. ……. down a bit on Friday. $5.00 corn in some markets last week .…..Great for our Iowa farmers. So what do you think…… Grains will probably open mixed this morning. We will play with the export numbers for a week or so….. So the DOW will open mixed to down a bit this morning. DOW was off a little on Friday. Look for some crazy swings in the market in the next couple of weeks. Some favorable earnings reports coming in for the quarter.
Well, did you get your FSA/IRS forms filled out now that you have read your mail. This is the time of year as you clean out your machines and wait a bit to put on some more inputs until this ground cools off a bit. Not sure how much anhydrous to put on with the ground temp above 55. 58 to 60 degreees on Saturday across north Iowa at four inches. So now is the time to bring your bookkeeping up to date. It is important as we head into November to know exactly where you are at with your profit and loss from a tax standpoint. You will have to make two sets of plans for year end. There are many tax advantages that are set to disappear on December 31st. But wait, that could all be extended by whatever congress decides to do in the next 6 weeks. It is anyone’s guess. I won’t go into all the specific programs that could be eliminated on this broadcast. There are two reasons to look at these figures with your banker and your tax preparer. One is the best use of your cash flow from borrowing or future borrowing. With sales in the $3.80 to $5.00 range one should have a good cash flow available. It is wild to think that on a quarter section of land we could gross over $50,000 more with the same land as we did with corn at $3.00. Before you spend it all on new paint or elective improvements consider setting up some kind of a tax deferral with some of it for yourself and your partner. Visit with your banker, investment person and tax preparer. Just think 1,000 bushels of corn could fund an IRA for you. Check with one of your advisors for specifics.
I am calling from the annual farm tax school in Waterloo this morning with the tax experts from ISU. Not sure which script they will teach from. It will be interesting so stay tuned!
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