Irish Agriculture Today

University of Vermont Farm Business Management Specialist Dennis Kauppila is working and researching in Ireland from July to December 2013. We will be highlighting his work in Ireland for the next several months. Here is his first post:

Ireland today, July 12, is having a heat wave like they have not seen in 7 years.  Yesterday’s high temperatures were nearly 90 ° F, very close to the record high in the past 30 years. 

Quite a bit different from a month ago, when the Irish government was helping to pay shipping costs to import hay and wrapped round bales from Britain and France to feed livestock.  This was a very wet, cold spring.  And it followed a wet year in 2012, so forage inventories on farms were very low.  Farmers were feeding anything they could- including straw and expensive grain rations. 

Many Irish dairy farmers are seasonal producers, drying off the herd before Christmas.  Then the herd starts freshening around the beginning of March.  So in 2013, cows were calving, and getting ready to make some milk, but on most farms, there was not enough feed.  In June, the weather came around, the grass started to grow, and cows began milking.  And haying got started.  There is still concern about the coming winter’s forage supply- will there be enough?  There was a Feed Inventory day just recently, and another one coming up in the fall, when all farmers are encouraged to measure and count what they have, in order to know they have.

photo 1

I am here on a 6-month sabbatical study leave, with farm financial advisors at Teagasc, Ireland’s Agriculture and Food Development Authority.  This is very similar to our land grant college system in the US.  The plaque at the front door of Teagasc Headquarters reads, “1958 In gratitude to the government and people of the United States of America whose generosity enabled An Foras Taluntas to be founded.”  It Marshall Fund money that funded this, helping to rebuild Europe after WWII.  (Teagasc began in 1987 or so, when An Foras Taluntas (research) combined with extension advisory and ag college education.)

Last week, I had the opportunity to attend an ‘open day’ at Moorepark, Teagasc’s main dairy research center.  It was called “Irish Dairying, harvesting the potential.”  They estimate that over 8,000 people attended this day-long free event.  It was spread out over nearly 50 acres.   There were 6 main stands at the beginning, with posters and microphones.  There were up to about 50 people in a group, and each group moved from stand to stand, with about 10-15 minutes of talk from researchers at each stand.  These stands included: 

  1. Positioning the dairy farm for expansion (after quota is gone);
  2. Resilient farming systems for an expanding Irish dairy industry-
  3. Growing more grass (for pasture and hay-haylage)
  4. EBI to fuel expansion (dairy genetics)
  5. Requirements to achieve 90% calving rate in 6 weeks (concentrated breeding to get concentrated calving- needed for a seasonal herd)
  6. Achieving a healthy herd (cattle diseases- like IBR and…

Then there was a walk by 10 paddocks to calibrate the eyeballs for measuring the amount of grass in a pasture after grazing.  And then 6 ‘villages,’ each with 8-10 posters and a talk that you could listen to or not.  The ‘villages’ were:  Grassland, Financial Planning, Genetics and Repro, High Quality Milk, New Entrants and Expansion, and Sustainabilty.  Then there tents for Industry partners, Research to adoption, Adding value to milk.  Plus there were tours of the milking barn, and the pig production facility.  Teagasc staff were well pleased with the day, and farmers’ spirits were quite high:  finally seeing the sun and having a good portion of their first cut grass harvested after a miserable wet, cold, late spring.

 

Unemployment Insurance

The latest question circulating our group of farm business planners asks what agricultural businesses are required to carry unemployment insurance. As with any regulatory issue, we strongly recommend that you confirm your specific situation with the VT Department of Labor:    http://labor.vermont.gov/Default.aspx?tabid=55

Answer:    For Unemployment Insurance purposes  an “employer”  is defined as an entity that:      “Pays $20,000 or more in gross wages in any calendar quarter for agricultural services, or employs ten or more workers in agricultural employment, including legal aliens, during some part of a day in each of at least 20 different calendar weeks (not necessarily consecutive) in either the current or preceding calendar year”  page 3 from the guide below    

Click the link below to access the full manual: A Guide to Vermont’s Unemployment Insurance Program                     http://labor.vermont.gov/Portals/0/UI/A-26.pdf

How to File a Crop Insurance Claim

The rain has continued and many farms are now experiencing significant crop loss and damage from flooding. Please click on this link for a step -by- step guide to filing a crop insurance claim.

How to File A Crop Insurance Claim

Pam Smith is our Extension risk management specialist:
Office: 802-349-2966
518-597-3202
Mobile: 802-349-2966
Email: pamela.smith@uvm.edu

UVM Extension Farm Viability offers comprehensive risk management planning for farms seeking to develop a strategy to identify, measure and manage the elements that pose risk to business success. See our programs page for more information on how to sign up.

4 State of Vermont Tax Issues for Farms

UVM Extension Farm Management Specialist Dennis Kauppila has just published an informative summary of important tax issues for  Vermont farm owners. This piece covers the following items:  (click this link to: 4 State of VT Tax Issues for Farms)

  • Hobby-Loss vs. Farming with Commercial Intent
  • Sales taxes
  • Rooms and meals taxes
  • “Current Use” or Use-Value Appraisal of agricultural land

(click this link to: 4 State of VT Tax Issues for Farms-   Dennis Kauppila)

 

Is Contract Growing For You?

Last week the VT Food Venture Center hosted a panel discussion  on contract growing. The focus of the event was to discuss the opportunities for vegetable producers entering into contracts with food processors. Contract growing is not the high margin, niche product, direct-to-consumer business model that often becomes associated  with VT “local food”. This event reflects the “scaling up” of local food. Robust food systems need lower cost/higher volume producers to provide the produce and  the food manufacturers to convert it to the final form that the market place demands. So, is contract growing right for you?

Here is short list of considerations for contract growing. At the bottom we have posted a nice legal overview of contract agriculture.

High Volume Delivery: Processors get more efficient when they can run their lines longer. A full day of product is better than 2/3 a day. Several hundred to 1/2 Ton deliveries will be the norm.

Product Specification: Processors  have clear specifications for each crop and contracts will reflect that. Expect to get paid a better price when you hit or exceed spec’s. Expect to be paid less if you can’t hit the specs. Do you have the skills to produce to these spec’s? Do you have the technology or the labor to grade out your produce according to specifications?

Mechanization in the Field: Higher volume contracts fit well with farms looking to invest in specialized equipment to grow the crops with the necessary mechanization.

Streamlined Market Communications: Working with a small number of buyers is expected to require far less communication and marketing materials compared to a business that manages relationships with dozens of buyers (or hundreds of subscription members).

Legal and Risk Planning: Contracts might require legal review. Farm owners will need to explore insurance and contingency plans to deal with the consequences of losing a crop, not hitting specs or not fulfilling the full contract.

For more information on the Legal Considerations of contract growing, click on this link to

Minnesota Extension:  Ag Production Contracts

 

 

 

 

 

New 2013 Rates for Machinery and Custom Hire

New machinery custom rates for 2013 have been published by Pennsylvania’s National Agriculture Statistics Service. Their report provides average rates for many categories within primary tillage, planting, haymaking, silage making, hauling, spraying/fertilizer/manure, tractor rental and other.

Rates have gone up for numerous activities. If you plan to hire someone for custom activities you can expect to be charged higher rates. If you are providing custom services, be sure to evaluate your own expenses so that you can adjust your own rates to the proper amount.

Here is the link to  the  2013 PA Machinery Custom Rates:

http://www.nass.usda.gov/Statistics_by_State/Pennsylvania/Publications/Machinery_Custom_Rates/2013%20CustomRates.pdf

 

Merchandising: what is wrong here?

kale

What is wrong with this picture? This is a bunch of kale for sale last week at a supermarket. I have a serious problem with  the “merchandising” of this product. I have a problem as a consumer and as a farm business specialist. I’ll give you a hint, think of the 5 P’s of Marketing.  Did you get it? Narrow it down to two P’s….product and price. Trick question right, I did not tell you the price of this product. Stick with me for 2 paragraphs and I give you the answer.

For this case, the definition of merchandising is the act of promoting products for sale in a retail setting . This is the retailer’s grand chance to do what retailers do…present a product to the customer  to make them want to buy it. How is your merchandising? Are you doing a good job getting customers excited to buy your products and then creating a good atmosphere for them to make the final purchase? Remember the 5 P’s of marketing: Product, Price, People, Place and Promotion. Place is covered, I’m already in the store. People: the produce lady smiled at me when I started taking pics of her kale. Promotion: the store sends out flyers and sales updates. Product: Getting warmer….take a close look at this product. Does anyone notice the top of the kale stalk still attached here, about 4 inches worth.  I’ve sold kale before, usually we bunch the leaves. On occasion you’ll see a top cut but here is my problem, Price. They priced this product by the pound. So I am paying for the weight of that 4 inches of kale stalk. I would have preferred to see this product priced by the each, so the consumers that got 5 inches of stalk vs. 3 inches of stalk still got the same value in usable kale.

Call me picky or thrifty, but remember… The customer is always right!

VT Digital Economy Project provides support to small business

The Vermont Small Business Development Center (SBDC) has launched the VT Digital Economy Project. This project can support small business, farms included!, with a variety of business training, advisement and potential grant funds to support the following items:

online presence, websites, social media, cloud computing, market analysis and potential funding to support specific projects where outside consultants are needed.

This is a great opportunity for VT farms that seek to use the internet to market products and communicate with customers. For more information, click in this public flyer from VT SBDC SBDC Launches Digital Economy Project

Quick Books or Quicken? Which accounting system will do the job?

Everyone loves the idea of a better accounting system but we often get stuck on what system to invest time, money and training into. As Farm Viability financial analysts we see farms using all sorts of systems. From shoe boxes and notebooks right through to customized commercial software programs there are many different was to record finances and produce meaningful reports to guide your management decisions.

It is common for people to adapt their Quicken home finance program into a farm accounting system when the farm first develops. With a couple years, the business grows and the farm is not sure if they have also grown out of that initial accounting system. Is it time to purchase Quick Books or one of the other software programs out there? The answer will depend on many things: do you have employees, do you invoice you buyers, do you seek to calculate payroll withholdings, do you seek to track enterprises (maple vs beef) separately?

Here is a link to a series of recorded videos from Oklahoma State Extension that explain Quicken vs. Quick Books. Take some time to learn about what these programs can offer you and decide which system will give you the information you need to make the best decisions on your farm.

 http://agecon.okstate.edu/quicken/index.asp?type=videos