AlO-Lancaster Fanning Saturday, December 13 2003
OPINION
Farming Trends
Recently a meeting of the monthly Ag Issues Forum in Lancaster
helped identify certain trends in the ag industry that are worth noting.
Our thanks go to Mike Brubaker for sending this description of the
major critical issues facing agriculture:
• Consolidation. Consolidation is occurring at all levels of agricul
ture starting at the farm and progressing through the supply and de
mand chains. Numbers of farms, animal units, and agribusiness enti
ties are declining rapidly, production per unit is increasing, and new
markets are emerging.
• Gove - nment and regulatory influence. These powerful forces are
exacting various pressures on all of agriculture, which result in losses
to profitability and declining global competitiveness. As these changes
occur, there will be ongoing influence by all levels of government and
additional regulations and compliance requirements are certain. This
influence will have an impact on the industry's ability to remain com
petitive on a global scale.
• Globalization. Advanced communications, technology, transpor
tation, and trade incentives as well as “disincentives" have created an
environment whereby “globalization” is occurring. Locally, our agri
culture has an impact on the world; similarly, the world has an impact
on our agriculture.
• Niche markets. Market and consumer demand for specialty prod
ucts. such as organic and ethnic foods, is continuing to grow. This de
mand will be supplied by producers who see an opportunity to fulfill a
philosophical goal and/or profit from a growing segment in the mar
ketplace.
• Technology advances. Science and industry will continue to de
velop tools for all aspects of agricultural production that will contrib
ute to a more efficient and competitive agriculture. These advances
will also provide tools to trace agricultural products from the field to
the table.
• Capital/finance. Agriculture will not be exempt form the pres
sures faced by other businesses/industries. As financing opportunities
become more challenging for the production farmer and industry, ag
riculture will utilize precision-like management and intensify capitol.
Financial sources will continue to increase the minimum business op
erating standards of agriculture to qualify for capital and encourage
competitive rates of return when compared to nonagricultural busi
nesses.
• Animal welfare. Agriculture continues to make animal welfare
advances to enhance consumer confidence, provide continued access
to global and local markets, and to remain competitive. Animal agri-
Saturday, December 13
Pa. Cattlemen’s College, Toftrees
Resort and Conference Cen
ter, State College, 9 a.m.-4
p.m., (814) 863-3661.
Monday, December 15
Lancaster Dairy Cow College,
Lancaster Farm and Home 4-Day Workshop on Manage-
Center, thru Dec. 16, 9 a.m.-3 ment Essentials for Dairy Suc
p.m., (717) 394-6851. cess, Holiday Inn Express,
Future of Agriculture in York _ . _
County, Extension Office, (Turn to Page A3O)
Editor:
On Nov. 17, the much-publi
cized milk hearing was con
ducted at Keystone College.
Dairy farmers came from as far
away as Buffalo, N.Y. to make
their sincere concerns known.
In addition to aides from Con
gressmen Sherwood and Kan
jorksi’s offices. Senator Specter’s
office was duly represented. State
Senator and Pennsylvania Minor
ity Leader Bob Mellow thought
the hearing was important
enough to send his administrative
assistant to the event.
(Turn to Page A 26)
v.
* Farm Calendar ❖
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-•1-
Pleasant Acres, 7:15 p.m.
Ohio State Extension’s Upper
Olentangy Watershed Action
Planning Team Workshop,
Crawford County Courthouse,
8:45 a.m., (614) 247-7876.
Tuesday, December 16
❖ Farm Forum ❖
Others attending the hearing
included Larry Breach, president
of the Pennsylvania Farmers
Union; Ron Williams, former
Wyoming County commissioner
who serves as a regional director
of the Pennsylvania Department
of Agriculture; Jim Conners, the
former mayor of Scranton, repre
sented Gov. Ed Rendell’s office;
and Gordon Hiller, a former re
gional director of the Pennsylva
nia Department of Agriculture
(Turn to Page A 29)
Increased public pressure has led
to, and will continue to produce, reg
ulatory measures that directly affect
the manure application industry.
On Dec. 16 a meeting will be con
ducted at the Dauphin County Agri
culture and Resource Center in Dau
phin to discuss forming a
Pennsylvania Manure Applicators
Association. The event will begin at
5:30 p.m. This will follow the Penn
sylvania Manure Hauler Certifica
tion Course which will be taught that
day at the same location.
An association for the hauling in
dustry would enable the industry to
have a voice in the development of
these regulations. It could also pro
vide other benefits such as relation
ship building with regulatory agen
cies and insurance packages.
Discussion that evening will be di
rected toward the steps that could be
taken to form and implement this as
sociation. Presenters will be Robb
Meinen, Penn State University and
Walt Peechatka, PennAg Industries.
An optional dinner will begin at S
p.m. for those interested in the appli
cator association. Please preregister
for the dinner. There is no cost to at-
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SEEING THE
BIGGER PICTURE
Background Scripture:
Isaiah 409:3-11.
Devotional Reading:
Luke 1:5-80.
Last week, we saw how the purely
personal concern of Hannah became
the means whereby God was able to
convey a bigger, deeper message.
Hannah’s anxiety over her childles
sness was transformed into a procla
mation of thanksgiving, not only for
God’s vindication of Hannah, but for
the greater salvation that God prom
ised to his people Israel.
We see a variation on this same
theme in Luke 1, when Zechariah,
overwhelmed with gratitude for the
birth of his son John (later, John the
Baptist), is “filled with the Holy Spir
it" and proclaimed the role his son
would play in an even greater drama
of salvation: “And you, child, will be
called the prophet of the Most High;
for you will go before the Lord to
prepare his ways ” (1:76). For a
proud father on the day of his son’s
long-delayed birth, to acknowledge
that his son would be the forerunner
of one even greater is no small feat.
Lancaster Farming
An Award-Winning Farm Newspaper
• PDA friend of Agriculture Award, 2003
• Keystone Awards 1993,1995 • PennAg Industries 1992
• PACD Media Award 1996 • Berks Ag-Business Council 2000
• Recognized for photo excellence throughout the years by the
Northeast Farm Communicators
To Explore The
Formation Of A
Pennsylvania Manure
Applicators Association
tend the meeting but there is a $l5
charge for the meal. To register, con
tact Robb Meinen, Penn State Uni
versity, at (814) 865-2987 or
rjml34@psu.edu.
To Complete Year-End
Tax Planning
With the New Year just around
the corner. Regional Farm Manage
ment Agent Roland Freund reminds
producers to complete year-end tax
planning. Prudent farm managers
will take steps to save taxes, know if
they have accounted for finances ac
curately, and collect the information
needed to accurately measure 2003
business performance. There are a
number of essential tasks for the
year-end “to-do list.”
First one should pay all bills that
are due. This is a good business prac
tice, and it simplifies the task of pre
paring the list of accounts payable if
there are none! Each dollar spent
could save you 47 cents or more in
taxes.
Second, Freund suggests produc
ers should count their blessings and
review their charitable giving. There
is much to be thankful for this year,
even for those who had some strug
gles. While milk prices have not been
great, crops have done reasonably
well and the egg and beef industries
are having an exceptional year. At
this season, give generously to your
church and charities. Not only will
you share your blessings, but also
contributions give you the same tax
break as advance purchases of feed
or supplies.
Another important year-end step
is to complete farm records. Next
year starts a new record period for
most farmers. Confusion reigns when
two sets of books are used simulta
neously, so it is important to get all
available transactions recorded
promptly. It should be possible to
close the books within a few weeks
when bank statements give you the
amount of interest and principal to
record.
The end-of-year inventory is essen
tial for analysis. For accuracy it
should be completed before you retire
New Year’s Eve, but that can be dif
ficult! If it is done carefully every
year, balance sheet changes can be
calculated for the 2003 accrual ad
justments. This must be done if you
wish to know your cost of produc
tion.
It was, however, a recognition that
would be echoed in his son John’s
own response to Jesus of Nazareth:
“I baptize you with water for repen
tance, but he who is coming after me
is mightier than 1, whose sandals I
am not worthy to carry....”
(Mt.3:11) and “He must increase, but
I must decrease” Jn. 3:30).
The World ‘Out There’
When we are bom into this life,
there is no world beyond our imme
diate milieu, and everything or per
son “out there” exists solely for our
own nourishment and care. Maturing
which is not the same as getting
older takes place as I realize that I
am only part of that world, which
once I believed began and ended with
me.
Sadly, it would appear that some
people never grow to that realization,
including, sometimes, those who re
gard themselves as followers of Jesus
Christ.
In Luke 1 we are confronted with
the concept of vocation. John the
Baptist’s father, Zechariah, makes
several allusions to it. First, he al
ludes to the calling of Israel to a spe
cial relationship with God and mis
sion for God. This was a calling
originally “promised to our fathers,”
a reminder of “the oath which he
swore to our father Abraham, to
grant us that we. being delivered
from the hand of our enemies, might
serve him without fear. .. .”
(1:72-74). They were part of a much
bigger picture than that of their own
lives.
Zechariah also recognizes that his
son, John, has been called/vocated by
God to be the forerunner of another.
“And you child will be called the
prophet of the Most High; for you
Bank balance-sheet forms can be
used to record the information. Com
puterized systems should have them
built in. If you need a worksheet or
spreadsheet, call (717) 240-6500 or e
mail rfreund@psu.edu. The “Dairy
Farm Feed Cost Control” spread
sheet can help with silo capacity and
such computations Go to http://
capitaldairy.cas.psu.edu/, click on
“Dairy Management Tools,” and
scroll down to download it.
The “Current Assets” section of
the inventory includes “Growing
Crops.” Enter the value of seed, fer
tilizer
ime, and fuel invested. Record
“Crops for Sale and Feed” including
feed in mill storage and prepur
chases. Significant supplies of fertil
izer, chemicals, and semen must be
listed and valued. Feeder livestock
and growing heifers should be in
cluded. “Accounts receivable” (milk
check, crop/livestock sales, etc.) and
“Cash Balance” (checking + savings
+ under mattress) must be accurately
recorded to make any cash flow
check reliable.
Feed and livestock inventories
should be valued at a conservative
farm-gate value. That means market
price less commission, less the cost of
getting them to the selling point. If
the auction sells a single ton of hay
for $l5O, buyers might only offer
$llO for each of your 1,000 tons of
hay equivalent at your farm.
Your accountant needs informa
tion on sales and purchases of ail
capital assets to maintain the depre
ciation (basis) record. But you need
to do your own Fair Market valua
tion annually.
Unless you are planning to sell
out, avoid wild fluctuations in dairy
cow values, and don’t escalate land
values annually. These gimmicks can
seriously distort analysis. Aim to re
duce the value of equipment in in
ventory by 15 to 20 percent, and
dairy buildings and structures about
10 percent annually.
Finally, you need to update your
liabilities list and plan to pay taxes.
Using debt to finance tax avoidance
(that is, taking out a loan to finance
prepays or capital investments) can
create extreme economic hardship in
the future.
Quote Of The Week:
“Being a President is like riding
a tiger. A man has to keep riding
or he is swallowed. ”
Harry Truman
will go before the Lord to prepare his
ways” (Lk. 1:76). Some of us will be
tempted to think, well, good for
John; he had a vocation. He was
called to be and do something impor
tant in God’s scheme of things.
Making A Difference
Christian vocation, however, is not
just a concern for specially gifted or
specially recognized Christians. All
of us are called to make a difference
in this world.
In one or more of millions of dif
ferent ways are called by God “to
give knowledge of salvation to his
people in the forgiveness of their
sins... when the day shall dawn
upon us from on high to give light to
those who sit in darkness and in the
shadow of death, to guide our feet
unto the way of peace” (1:77-79). Ze
chariah’s description of John’s call
ing is no different than God’s calling
to each of us.
If you are in any way intimidated
by the Baptist’s calling, remember
what Jesus said in Like 7:28; “I tell
you, among those born of women,
none is greater than John; yet he who
is least in the kingdom of God is
greater than he.” This is not a put
down of John the Baptist, but an ele
vation of the Christian vocation to
which God calls each of us who
would follow his Son. Each of us is
called to something very special in
God’s service. Our failure to recog
nize and respond to that call and see
the big picture does not diminish it
one bit.
Lancaster Farming
Established 1955
Published Every Saturday
Ephrata Review Building
1 E. Main St.
Ephrata, PA 17522
—by—
Lancaster Farming, Inc.
A Stemman Enterprise
William J Burgess General Manager
Andy Andrews. Editor
Copyright 2003 by Lancaster Farming