This live discussion must have hit some nerves. I have had the most interaction on it than any other. Tell me what you think.

 

 

You can watch my live talks every morning 7:30 CST on the Periscope app or Twitter @BillGraff

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Chuck HagelChuck Hagel, who is a former Senator and Cabinet member of the Obama administration is now speaking out about his time running the Defense Department.  So why does Obama call it ISIL when many others call it ISIS ?????

It revolves around Israel, Palestine, and Muslim history.

So what does all this mean to agriculture???

ISIL eliminates Israel from the map.

Why so much chaos?  Is this rules for radicals.

Fundamentally change America.  Not the “hope and change” most people were thinking back in 2008.  I think most people want to role with the changes.

Why are there so many people with close ties to Iran or Saudi Arabia involved in the American government?

What is the Muslim brotherhood and what do they want.

In politics many things are done with a reason and purpose behind them.  So why did Obama send the bust of Churchill back to England?  Almost all things are politically thought out and politically motivated.  Remember the ambassador in Libya was killed because of the video – yeah right.

So now Chuck Hagel is talking.  Covering his butt, or actually telling us how it really was/is.

So is O going to get Gitmo closed before he leaves office.  Really trying hard.  Remember it was a campaign promise in 2008.

Hagel blames Susan Rice for lots of the problems.  Hagel blames lots of people besides himself.

I also touch on a few things I think the Muslims really do not like about the west.

So, why does all this matter to rural people and agriculture in particular.

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States’ Budgets Affect Farmingmoving van

It is hard to move a farm.  It can be done, sell or trade ground in one area for another area.  People have done it but it also has it’s own costs and problems associated with moving.  Why move?  Lots of reasons, but one that is gaining attention is dis-functional or high costs government in your state or local region.

OK, not every state is Illinois where the powers that be have gone 6 months without a budget, but other states are having problems with some heading that way.

Kansas has huge budget problems.  Nebraska is losing rural population and is gaining liberals in its urban areas.  Can you say Chicago versus downstate.  These are just a couple examples.  You also may be like me and farm in several different school districts and the difference in tax rates can be huge also.

With less people agriculture is losing votes and some political clout.  We still have massive economic clout, but voters and votes at the end of the day determine a lot.  I will discuss how my state got to where it is today, which is not in a very good economic situation.  I also will say it is going to cost farmers in Illinois more money to get out of this situation.

I will discuss what is happening to Colleges and Universities and how this affects agriculture.  Higher education is a mess in this state.

How no budget is affecting Soil and Water Districts, State and County Fairs, and research and the Extension Service. How hard do Ag groups push for these to be funded without having to pay higher taxes and fees.  We do not pay sales tax on machinery purchases, and seed, chemical, fertilizer, feed, etc.  Could they tax these things???

Agricultural still has wide spread support, but how deep is it?  I do not want to have to find out.  My state is under court mandated spending on much of the budget right now.  So now the courts decide???

So about that move.

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vulture

Possibly my best periscope broadcast, I’m posting as a farm podcast.

Tell me what you think.

Farm finances are down right ugly.  Unless you had above average yields you could be hurting financially.

I was doing my end of the year pre tax and accrual accounting. I use Farm Business Farm Management service for my books and taxes.  My numbers were bad, and I have known for awhile they would be bad.  We fell into that no man’s land of raising 85% of a crop.  Not enough to come out ahead, but too much to get paid for bushels at the higher spring price.  Crop was also worth more in October than it is now.  On the accrual side we had lower yields so lower inventory at a lower price for the grains.  I also put a lower value on the cattle.  Just not pretty to look at.  

15% of a $500,000 gross is $75,000.  Every time before when we have had a short crop, prices have rallied.  First time we had a short crop and lower prices.  We farm some of the best dirt in the world, but too much water did us in on some of it this year.  Way too much.

I was pretty down and out when I went to the appointment, but felt better when I left.  Lots of people in the same boat as me and lots worse off.  Expenses too high income too low.  Probably won’t be much better in 2016.

My FBFM field man is one of the best.  Really knows his stuff.  Said I was OK, going to be a setback but not a career ending hit.  I just don’t like to go backwards.

I discuss my numbers and what is also happening to others.  In later posts I will say what I am doing to change things and hope to come out better off next year.

My goal is to have much better numbers next year.  I sure am glad 2015 is over.  Sure glad it is over.

(Join us on periscope every morning 7:30 cst periscope.tv/billgraff )

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#TheStruggleIsRealScreen Shot 2015-12-13 at 9.41.54 PM

That is a hash tag on twitter that some are using when they talk about surviving the agricultural downturn we are in.

I was asked by a banker friend to say a few words on how farmers can survive the next few years.  20 minutes worth to be exact.  Short, sweet and to the point.  Some agricultural suppliers will not be happy with me.  So here are my notes.

4 year downtrend in commodities, 4 consecutive years where commodity prices are lower December 31 compared to January 1.  Never has happened before.  Even during the great depression it never went down 4 years in a row.  So the boom is a bust????

If you can come close to break even you are doing OK.

Close is good enough in these times.

High costs are the problem.

Cash does not cash flow!

Tax implications.  Lots of farmers will owe taxes this April, but will not have the money to pay these taxes.  Section 179 is biting back.

It is OK when times were good to pay some tax.  Farmers hate to pay taxes and many times that gets us in trouble.

Cash Flow restructure, lengthen terms, farmers own lots of stuff borrow against it, or sell it !!!

Big Getting Bigger fact of farming I discuss this.  Lots of input suppliers, not all but many need you to survive.  They can not live off just a few really big guys.  So most will work with you to make it through this.

Too many slices of the pie.  Grandpa needs to retire and collect social security.  Grandpa has to quit taking a share of the farm profit.  Grandson needs to get an off farm job.  Grandson needs to not take a slice of the farm income pie.  That slice needs to go pay off debt and or re-invest in the farm operation.  You will still get all the work done.