Lancaster farming. (Lancaster, Pa., etc.) 1955-current, January 21, 1984, Image 140

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    Pl6—Lancaster Farming, Saturday, January 21,1984
Brockett’s Ag Advice
tM By John E. Brockett
IH Farm Management Agent
Lewistown Extension Office
Plan and Project
Planning is part of your job if
you are operating a farm business.
Unlike records, or budgets, plan
ning can be exciting. This does not
mean that there can be some
drudgery in the preparation of part
of the facts required to develop a
unable plan. However it is in
teresting to speculate and plan or
project the results into the future.
Furthermore planning is a good
way to dream about the coming
crop season which is always a good
Planning can take many forms.
First there is a simple cash flow
projection that is itself a plan. You
plan to spend $5500 for fertilizer in
March. You plan to get $3500 for
corn in October because this is
what you are projecting to happen
from past experience. Next there
is the plan to improve production.
You can project the results of this
plan by developing a partial
budget that includes the additional
expense incurred as well as the
additional income (Did you forget
that?). Then there is the planning a
person can do with linear
programming. With this tool we
can lay out plans for several years
in the future. We can test the plan
with price and production fluc
tuations to see if it is sound.
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Planned credit is seldom a
problem. Planning credit means
that you have already decided how
it will be used and how it will be
repaid. It is unplanned credit that
causes you grief.
If you are having credit
problems get someone to help you
set up a workable plan to solve
those problems. Try to get an
expert. Who? Here are a list of
possibilities (1) someone from
your credit agency - if the first one
can’t or doesn’t help you, try
someone else, (2) someone from
another credit agency - they may
charge a fee or want your business,
(3) an extension agent from Penn
State - area farm management
agent, county agent, or state
management specialist or (4) your
accountant if he or she has your
full confidence and is qualified.
Learn how to calculate your debt
repayment ability then use it when
contemplating borrowing money.
1. Project what you will need
each month this coining year then
stick to it.
2. Analyze your 1983 records and
squeeze out all the unnecessary
unproductive costs.
3. Develop a family budget.
4. Work as hard with her head
as you do with your back.
Plan Your Credit
Plan for Survival
Clapper Farm Equip
5. Don’t borrow unless you know
how you will repay it.
6. Work with your creditor on
your repayment program.
7. Prepare for 1984 taxes starting
now not a year from now.
Milk Diversion
Many dairymen are wondering if
they should participate or not.
Some have already made a
decision. One question I have
received is who will benefit or what
trends do you see? After running or
reviewing programs for over 50
dairymen, I am now ready to
discuss trends. I was also able to
get a few questions answered on
the regulations so let’s take a look
at how it might affect you
Who will benefit?
1. Dairymen who are phasing out
their business.
2. Dairymen with 1983 milk sales
equal to or below 1982 milk sales.
3. Dairymen who are milking 3
times per day in 1982 and want to
cut back to 2 times per day in 1984.
4. Dairymen who are over
crowded facilities especially
where it affected efficiency of feed
use or production level per cow.
5. Dairymen who had poor feed
efficiency for any reason.
6. Dairymen who for any reason
wanted to cut down on their
Who will not benefit?
1. Dairymen with high debt loads
who intend to stay in business and
are willing to institute the
management changes necessary to
become more efficient.
2. Dairymen who sell and wish to
continue to sell breeding stock.
3. Dairymen who have 1983 milk
sales that are 15 percent or more
above 1982 milk sales.
Some Questions
There are a number of questions
a farmer should consider before
making a decision.
1. What happens if you are on a
base-excess marketing plan now?
Answer: Under present
regulations you can reduce your
milk marketed for 2 quarters in
excess of your contract reduction -
then increase for 2 quarters to keep
your market base up - then
decrease for the sth quarter. Your
reduction must be within 3 per
centage points of your agreed
upon reduction for the 15 months.
Example: Contract to decrease by
15 percent - For quarters 1 and 2
(thru June), actually decrease by
25 percent. Bring production back
to normal for period July thru
December to establish market
base. Now comes the tricky part -
since you agreed to a 15 percent
reduction for the 15 month period,
you must make the final ad-'
justment for the January thru
March of 1985 period. This will
require some records and careful
2. What is meant by 3 percentage
points leeway? Answer: At present
it means that if you agree to reduce
by 15 percent, you will evidently be
paid for a reduction of up to 18
percent. Now watch out because it
also means that if your reduction is
less than 12 percent you may be
subject to a repayment of money
received plus a penalty.
3. What if I don’t make the
contract reduction? Answer: At
present you may have to repay
money received plus pay a
penalty. There does not appear to
be any partials in the program.
Your contract of 15 percent means
that a 10 percent reduction is a
breech of contract.
4. What steps are necessary to
sign up? Answer: First you will
have to establish a base. To do this
you will need 12 milk slips from
1962 or 24 milk slips from 1981 and
1982. There are a few exceptions.
For more detail contact your local
ASCS Office.
5. Can I sell bred heifers if I am
in the program? Answer: It ap
pears as though the answer is a big
6. I have a milk check assign
ment, will there be an adjustment
on it if I sign up? Answer; Lending
agencies have made no formal
policy on this but most of them say
they will handle it on an individual
borrower basis. See your lender for
an answer.
7. Can I sign up then go out of
business during the 15 months?
Answer: Present regulations do
not prevent this.
8. Who provides the waivers for
animals I sold for dairy purposes
prior to January 1,1984 if I want to
participate? Answer: Evidently
the local ASCS Office can do this.
9. If I sign up and want a quar
terly payment when would I be
able to get my first one? Answer:
Probably sometime in May - after
you receive notice of the amount
milk you sold in April and after you
fill in the request form - it appears
as though this check will be issued
by the local ASCS Office so there
should be a minimal delay.
10. What happens if I sign a
contract then want to discontinue?
Answer: Once you sign the con
tract you’re locked into it. There is
no such thing as backing out.
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