Moneywise

• Published in: Top Producer
• Format: Magazine Article Trade Publication Article
• Language: English
• Published: Philadelphia Farm Journal Media 15.09.2008
• Subjects: Agribusiness; Agricultural economics; Agricultural industry; Agricultural policy; Agricultural research; Agriculture; Analysis; Commodity price indexes; Crop insurance; Crops; Duffy, Mike; Farm income; Farmers; Fertilizers; Finance; Forecasts and trends; Government aid to agriculture; Government finance; Harvesting; Income; Insurance; Investor relations; Land appraisals; Management; Marketing; Methods; Payments; Policy research; Prices and rates; Production costs; Risk management; Seed industry; Smith, Linda; Soybeans; Statistics; Tax planning; Taxation; United States
• ISSN: 1056-0831

"To manage leverage, structure your debt--the more leverage, the more debt at fixed rates; use risk management to lock in costs and returns; manage your margins," he says. "The higher the percentage of your costs that are fixed, the higher your operating leverage. If you have high financial leverage, keep your rents and equipment leases highly variable." All too often, ag producers don't make a distinction between management and labor, says Roy Ferguson of Ferguson Group in Mitchell S.D. "Any individual who is an active owner or who assists materially with key decisions should be classified as management, whether or not they invest time in production activities," he says. "Anyone not having ownership, planning or supervisory responsibilities should be classified as labor, even if they are part of the immediate family." Custom hire also counts as labor. The farmers then filed for a judicial review. In Aaegson Grain & Cattle, et. al. v. USDA, settled last August, the district court found in their favor on the basis that the dispute was "adversarial" and USDA's position was not "substantially justified." --Roger McEowen, Iowa State University, Center for Ag Law and Taxation