Farm, Forest and Maple Business Clinics

UVM Extension Business Specialists Mark Cannella, Tony Kitsos, Chris Lindgren, Betsy Miller and Zac Smith are available to work one-on-one with farm, forest and maple businesses on their finances. Reserve a 1½ hour appointment to prepare documents that will help manage the business. Use the time to develop a balance sheet, update financial statements, review a business plan, consider changes to the business and more. Bring your financial statements, recent records and questions!

➥ 1½ hour, private meetings
➥ Nearly 100 appointments available from February – April 2020
➥ Held at UVM Extension Offices in 9 locations
➥ FREE!

Business Clinics Information Sheet (PDF)

Contact Christi Sherlock at Christi.Sherlock@uvm.edu or 802.476.2003 to register for one of the appointments listed below.

To ensure adequate preparation, reservations must be made by the Thursday of the week before your appointment. If you require a disability-related accommodation to participate, please call at least three weeks in advance of your scheduled session.

Useful Farm Tax resources…or are they?

by Betsy Miller, Farm Management Educator

I work with many types of farms and farmers in business planning.  I don’t keep track of the percentage, but I would say a majority of the folks I work with hire a professional to prepare their tax returns. However, I am a firm believer that a basic understanding of the rules is helpful even to those who hire a professional. 

When I sat down to write this I planned to share a few links of resources that would be helpful to farmers who either prepare their own returns or just want a better understanding.  What I found was a little disturbing.  Many of the sites that I used to find helpful are now out of date.  We all expect things to change from one year to the next, but there were some big changes in 2018 and many of the farm tax resources out there do not reflect or even mention those changes. 

I urge any of you who use the internet to find tax resources to check the dates on what you are reading. Make sure you are getting current information.

The one link that I will recommend is the IRS Pub 225 Farmers Tax Guide

Sugarbush Rental Rates

The number of maple taps in Vermont has doubled in the last 10 years. Many producers are expanding and securing a lease on a maple sugarbush can be a viable alternative to purchasing the land.

Photo Credit: Mark Isselhardt

Maple stand quality, accessibility, access to power and other factors will impact the rental price. Cash rental rates are common for maple forests. A typical rate in recent years has been about $1.00 per tap. In competitive maple regions in Vermont rental rates are $1.50 or more per tap. In regions with less demand or less desirable forest parcels $0.50-$0.99 is observed.

Setting flexible terms is an option for parties that want to share profits or risk between tenants and landowners. A flexible cash rate can be written so that the annual rate adjusts for the market price of syrup. Rental rates could also be adjusted for a variable crop yield.

UVM Extension is working on rental resources and maple lease templates this fall. New resources will be presented at Vermont Maple Conferences in January and made available online. Register now for the 2020 Vermont Maple Conferences in Middlebury (January 11th), Brattleboro (January 18th), and Hyde Park (January 28th).

Any Given Timber Harvest

by Chris Lindgren, Forest Business Educator

There must be as many ways to harvest timber as there are loggers, likely more. Every approach may not be “best,” but most are acceptable.  Each logger has a different set of equipment and a different crew with a variety of experience and skills, forest landowners have varying visions and objectives, and forest managers approach forest systems and forest operations based on their sensibilities. Each of these variables factor into a logger’s approach.

Whatever the circumstances, all parties desire a positive economic outcome. At all stages of production those who add value want to be fairly compensated for their work. The win-win result hopefully applies to both the cash value of materials harvested and the impacts on the residual stand, as well. Clearly, this is not always how it works out.

When I first began business planning work with logging contractors, one of the first workshops I attended was with Steve Bick of Northeast Forests LLC. I “got” to play a game Steve called penny logging.  This game was like production and assembly exercises I had encountered at various lean trainings over the years.  The objective: given certain constraints, arrange assets and production to achieve the smoothest, most economic output. Over the years I have become keenly aware of the constraints (terrain, soil, weather, ownership, regulation) on any given timber harvest. The harvest in the video above is an example of loggers using the constraints to their advantage, creating an exciting and elegant material flow. Enjoy!

Northeast Maple Producer Survey

Maple producers can complete the survey here: Maple Producer Survey

Photo Credit: Mark Isselhardt

The University of Vermont is conducting the Northeast Maple Producer Survey to understand the recent development in the maple sector and to inform how education and research can support maple producers. The survey will ask you about your maple production history, forestry practices, business goals and educational interests. Current projects focus on the Northeast but producers in any US state are welcome to complete the survey!

Participants will be asked to complete the online version or print survey. The survey will take approximately 20 minutes to complete. If you would like to complete a paper version you can contact Christi Sherlock at 802-476-2003 or Christi.Sherlock@uvm.edu to have a copy mailed to you.

The results of this survey will be published by University of Vermont Extension, shared in industry publications and discussed at maple conferences beginning in Fall 2019.

Maple producers can complete the survey here: Maple Producer Survey

Maple Planning Tools are Now Available Online

University of Vermont has created a suite of short-form business planning tools for maple operations. The Maple Business website provides web-based modules that include a yield calculator, a pricing tool with a sales forecast report, and a budget tool with a cost analysis report. A self-guided business plan is also available for users to draft and print sections of a written business plan. The modules offer an optional log-in feature that enables users to save their progress and return to work on their plan at another time.

Are you developing a new marketing plan? Using the Gross Sales Forecast a maple producer can take their entire maple crop and assign it to different container sizes and prices. Here is a sample report for 6,000 tap enterprise selling 80% of the crop as bulk syrup and 20% in retail containers.

More Maple Business Coming in 2019

Northeast Maple Producer Survey: In late August UVM Extension will be sending a survey across the Northeastern United States inquiring about business practices, business outlook and forestry practices.

Maple Leasing Resources: In Fall 2019 UVM Extension will begin publishing a series of maple leasing templates and legal resources to guide the development of business partnerships and other business-to-business relationships.

Are you looking for a new resource or business calculator to move your decision-making forward? Contact Mark Cannella at UVM Extension Maple Business today and share your ideas!

Are you on track to reach your goals this year?

by Betsy Miller

On a recent visit to a diversified farm I noticed a whiteboard posted in the office that listed sales goals for each month.  At the end of each month actual sales were tallied and written alongside the goals set back in January.

Goal setting is an important part of the business planning process.  People commonly refer to “SMART” goals – usually meaning Specific, Measurable, Achievable, Relevant, & Timely.  Setting goals that clearly define success (or failure) make it much more likely that we will hold ourselves accountable for the plans we make.  The farm I visited has a prominent display reminding them every day where they are relative to meeting sales goals.

As important as it is to set those goals in the first place, it is equally important to review them, update them, and determine if they were met.  Mid-year check-ins can help to identify areas that might be lagging while you still have time to change course.

Don’t let your goals become like New Year’s resolutions forgotten by Groundhog Day.  Keep them fresh and check regularly to see if you are on track to reach them.

Spring Has Sprung – a Gasket!

by Tony Kitsos

This spring has been quite a challenge, to say the least! Weather reports across the state talk about rain in some location on any given day, and that makes us a bit grumpy! We’ve waited all winter to get this year’s crops in the ground and take first cut off — and here it is June 5th with plenty of work to do on most farms.

On a recent early-June drive from Morrisville to Middlebury I saw a good many cornfields un-spread, un-plowed, and unplanted. And the window for getting a mid-May first cut in and covered was slammed shut by a month with rainfall 4” over the historical average. The New Englander’s adage of a year’s seasons being 4 months of winter and 8 months of damn poor sleddin’ has held court. It seems that if there’s less that can be done in the field, it hampers doing other projects – just don’t want to get wrapped up in anything else in case the weather breaks and it’s time to head to the fields.

All well and good, but while we wait, we need to turn our attentions to another season that’s upon us… Construction season. As if having too much water in the fields isn’t enough, there’s plenty of mud hanging around the farmstead and making quite a mess! It’s pointing out some of the high-risk areas that need to be filled in, drained, graded, or whatever is needed to minimize farmstead runoff into our waterways. Take the opportunity to find areas needing attention. Do some easy fixes. And be sure that we’re all responsible for containing runoff when and where it occurs.

UVM Agricultural Business has funds to help you assess the financial feasibility of some of the more comprehensive projects. We work independently, or with NRCS and VAAFM staff to help you find the best, most cost-effective solutions to most any water quality situation.  Give us a call at the St. Albans office at 802-524-6501 and ask for Tony Kitsos. I’m looking forward to starting the conversation.

Ecosystem Services Valuation – What is it, and should we look at farming practices differently?

By Tony Kitsos

In my opinion, any discussion concerning ecosystems and the services we gain from them must begin with the teachings of conservationist Aldo Leopold. In his seminal book, A Sand County Almanac, published in 1949, Leopold wrote on “The Land Ethic”:

The land ethic simply enlarges the boundaries of the community to include soils, waters, plants, and animals, or collectively: the land. This sounds simple: do we not already sing our love for and obligation to the land of the free and the home of the brave? Yes, but just what and whom do we love? Certainly not the soil, which we are sending helter-skelter down river. Certainly not the waters, which we assume have no function except to turn turbines, float barges, and carry off sewage. Certainly not the plants, of which we exterminate whole communities without batting an eye. Certainly not the animals, of which we have already extirpated many of the largest and most beautiful species. A land ethic of course cannot prevent the alteration, management, and use of these ‘resources,’ but it does affirm their right to continued existence, and, at least in spots, their continued existence in a natural state. In short, a land ethic changes the role of Homo sapiens from conqueror of the land-community to plain member and citizen of it. It implies respect for his fellow-members, and also respect for the community as such.

Leopold saw the value in land “conservation,” understanding that we must be able to both use, and preserve, that which we dwell upon – not only for monetary gain but for our very existence as a species.

Enter the discussion on valuing the conservation of habitat. Ecosystem Services Valuation (ESV) can be thought of as placing emphasis on “ecosystem services” by making an explicit link between the functions of nature and the subsequent benefits (goods and services) provided to society as a result of those functions. The “goods,” such as milk, beef, seafood, forage, timber, biomass fuels and natural fiber are easy to account for and important to human welfare. They usually have monetary value and are accounted for in the traditional functioning of our economy. The “services,” on the other hand, are just as valuable but are not accounted for in the consumer market. In other words, we do not directly pay for our use of them. They provide basic life-support functions, such as clean air, clean water, flood attenuation, carbon storage and sequestering, nutrient cycling, and biodiversity, to name a few.

But should we place economic value on these services? And if so, who should pay? With Legislation beginning in 1948 through today, dozens upon dozens of legislative actions at both the federal and state levels aimed at conservation and environmental protection have been passed. Most recently, Act 64, Vermont’s Clean Water Act, came on the scene, requiring farm businesses to adopt a wide array of practices geared towards improving the water quality of our state. With a combination of grants from NRCS EQIP and VAAFM BMP sources, farms can receive significant cost share towards implementation of these practices. However, the residual costs become the responsibility of the farmer and when profit margins are razor thin at best, those costs are daunting.

Are Vermonters receiving more value than just a new manure pit or barnyard to control unwanted direct discharges? What of the ecosystem value down the road – what value should be placed on land that must be maintained and farmed in specific ways? And does the product produced become more valuable? Should those goods be revalued to account for the “ecosystem services” provided by our land stewards – the producers? We may be entering into this arena of ESV and looking at other yet-to-be-identified players to actually pay for the future “ecosystem services” provided by Vermont farmers.  

Let’s keep in mind Leopold’s description of land ethic: “A thing is right when it tends to preserve the integrity, stability, and beauty of the biotic community. It is wrong when it tends otherwise.”

Digital Template Helps Logging Companies Develop A Business Plan (by Chris Lindgren)

UVM Extension Forest Business has added a new tool to the digital resources available to forest products businesses. Small Business Planning for Loggers was produced by Steve Bick and Chris Lindgren with support from Vermont’s Working Lands Enterprise Initiative.

Forest Business has been supporting digital tools and skill development in our work for five years now. Whether it’s bringing bookkeeping to the computer or online, using video conferencing for meetings, developing digitally based tools, or collaboration in cloud-based applications, acceptance of digital tools is increasingly becoming the norm with the business owners who engage in our program.

This morning as I was working on this blog I read a press release about a new report on digital skills development in rural America—Unlocking the Digital Potential of Rural America. Commissioned by Amazon and researched by the US Chamber of Commerce the report concludes that the adoption of new digital skills and technology in rural America will lead to significant economic gains.

“Increased adoption of online tools and digital services for businesses across rural America could create more than 360,000 jobs in the next three years.”

“Increased adoption could grow annual revenues of rural small businesses by more than 21% over the next three years – the equivalent of $84.5 billion per year.”

“Online tools and technology have the highest potential impact on rural small businesses with annual revenue under $100,000.”

I completely agree.  This is a huge opportunity for Vermont. Vermont’s small businesses have much to gain by developing digital know-how and adopting digital tools. Forest Business will continue to support development of digital skills and tools for Vermont’s forest economy. Stay up to date on Forest Business programs here.

Do you have thoughts on digital skills education? Please take a moment to fill out our educational resource assessment survey. Thank you.