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Our lenders have some pretty good ideas about farming. Read the following information to find out what they think and how it might help you prepare this season.
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Are medical expenses taking a bigger bite out of your income? If so, have you considered raising the deductible on your health plan to $1-5000 and putting that money into a HEALTH SAVINGS ACCOUNT?
ADVANTAGES:
1.Contributions are fully tax-deductible and
interest earned in the account is tax-free.
2.You control the use of the funds and any excess
funds not used are yours and earn interest.
3.Contributions remain in the plan year after year and
do not need to be spent
4.Funds can be used for over the counter medications,
prescriptions, eyeglasses, dental work and other
medially related items as well as to cover the
deductible on your insurance.
5.There are no hidden fees or costs.
Merrill
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This is the time of year we receive tax returns from our farm producers and borrowers. We measure/compare profitability and capacity to cover financial needs from these reports. It is a simple exercise that speaks volumes about a person’s farm business. See a GBB&T Ag Banker and review your tax return today!!
Mark
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Historically, the spring season presents some of the best marketing opportunities for selling grain in the Midwest. Often, the spring weather delays timely fieldwork or the threat of bad weather during crop emergence will create short-lived price rallies. These rallies cause price to move upward—which make good points to sell at least a portion of your expected production for the coming year. No matter what your grain marketing strategy will be this year, we encourage area producers to watch for marketing opportunities this spring and be open-minded to locking in profits early in the growing season.
Ryan
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The agricultural world is always changing. It is important to focus on the ever-changing marketing strategies, technology updates, Government policies, and management tools. Here at Green Belt Bank and Trust we would like to help you in any way we can to make your operation prosperous and satisfying.
Looking forward to serving you!
Janet
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| Seasonal Information for Farmers: Economics of Time |
Springtime is a critical period in farming. There’s a lot to accomplish in a short amount of time, and farmers have to find ways to deal with and work around uncontrollable factors such as inclement weather, machinery breakdowns, and every other obstacle that seems to emerge at the most inopportune time.
Knowing the actual “Economics of Time” will help a farmer make more profitable decisions. For instance, a recent University of Illinois study put this in perspective by comparing the size of a planter against the amount of acres planted in a given season. Many factors that affect profits were analyzed in farm sizes ranging from 400 to 4000 acres, such as efficiency of each planter size, and workday probability—that’s the probability that a given date will be suitable to plant.
Click here to read more about the Illinois Study.
Once you know the true costs involved with being untimely and understand how the biggest piece of equipment with the most horsepower you can afford may not be the best one for your operation, you’re better armed to make the right purchasing decisions.
We look forward to having the opportunity to help our farmers improve their operations and succeed. Your Ag Loan Officer at Green Belt Bank & Trust is only a call, click, or visit away.
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| The Buzz: High Prices Doesn’t always mean High Profits |
So corn and beans have doubled their price in the past few years. The Balance Sheet looks as good as it ever has, the banker is happy, and that career choice you made to become a farmer is really paying off.
But how much is your grain really worth? Remember when Grandma said not to count your chickens before they hatch? That saying has never been truer—because the price at the elevator may have changed significantly between now and the time the grain is marketed.
So how long should you hold onto that inventory? And how can you ensure that the price for new-crop grain will be this good at harvest time? GBB&T encourages farmers to look into the various marketing strategies and consider locking in some profits. There are many successful strategies ranging from using futures and options, forward contracts, to storage facilities. The objective is to enhance the price received while meeting cash flow needs in an efficient manner.
Grain marketing professionals use the “Rule of Thirds” to underscore the importance of marketing. They make the point that on the average, two-thirds of the grain produced in the US is sold by producers in the bottom one-third of the given price range for the marketing cycle. This shows that there is a great deal of upside potential for farmers willing to take the time to fully understand the marketing strategies available to them.
Also, history tells us that the good times presently seen in grain farming may not last. If the current level of income does persist, then expenses are likely to rise accordingly, squeezing profits back to “normal” levels. Call, Click, or Visit your Green Belt Bank Ag Banker today for more information about effective marketing plans. See why it’s more important than ever to squeeze every penny out of every bushel in the coming year.
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| Loan Feature: Beginning Farmers |
Obtaining enough capital for a major purchase is one of the biggest hurdles facing Iowa’s younger farmers in today’s agricultural environment. Green Belt Bank & Trust offers bonded loans to qualifying beginning farmers through the Iowa Agricultural Development Authority. According to Jeff Ward, Executive Director for the IADA,
“The Iowa Beginning Farmer Loan Program was established in 1981. Beginning farmer loans are financed by participating lending institutions or contract sellers with the issuance of federal tax-exempt bonds offered by the IADA. Interest received on contract sales or direct loans by individuals also is exempt from state income taxes.
The tax-exempt interest income earned by lenders and contract sellers enables them to charge borrowers a lower interest rate. Beginning farmer loans typically carry interest rates below prevailing market rates.”
Green Belt Bank and Trust is a proud provider of IADA bond loans for qualifying beginning farmers. There are numerous benefits to the borrower, some of which include:
* Receives benefit of lower rate of interest on a loan
* Can obtain financing on machinery, equipment, breeding livestock, or land with low or moderate net worth
* Down payment negotiated with bond purchase (bank or contract seller)
* Can purchase from a closely related party, i.e., parents, grandparents, and siblings, only through a third party lender
* No restrictions on off-farm income
* May reapply and benefit from the program until all of $250,000 lifetime maximum has been used or purchased sizeable land tract
* Likely to establish a good credit ranking (rapport) with a lending institution/contract seller
* If eligible may be used in conjunction with down payment assistance through a Farm Service Agency (FSA) loan or Loan Participation Program (LPP) loan through the IADA when financed through a bank.
The application process is fast, simple and requires very little documentation from the borrower. Call, Click, or Visit your Green Belt Bank Ag Banker today for more information and how to qualify for the Iowa Beginning Farmer Loan Program.
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