Upcoming Free Seminar Aims to Offer Preventative Maintenance as well as Real Time Help with Current Farm Economy.
               
           As many are aware, there will be upcoming seminars on January 22 and 23 that center around the challenges with the current farm economy.  The 22nd will be at the Honeywell Center in Wabash, Indiana, at 6 pm, while on the 23rd the location will be the Robin’s Nest Event Center, Battle Creek, Michigan, at 6 pm.  Those wishing to attend should call and RSVP at 260-351-4440. 

I am thankful to the several professionals who have been gracious enough to give their time by pitching in to make this event come together.  The title of the seminar is “Navigating the Farm through Difficult Financial Times”.  Someone recently told me that they wished I had more of an upbeat topic to present.  I told this individual that, sure, we all wish times were better and there were more feel good topics to speak on.  However, as with any business, farming is cyclical, and during down times, worthwhile information in bad times is likely more beneficial than in good times. 

               The seminar is aimed at giving farmers information that will be helpful in making decisions that may come their way.  Knowing what your options are before a problem materializes is invaluable.  Who knows how long the farm economy will remain in the doldrums, but I always remember the famous quote that “the market can act irrational longer than you can remain solvent”.  After all, what happens if we are looking another 3, 4 or 5 years of low grain prices?

               My part of the seminar will address structuring the farm as a legal entity, or multiple legal entities, and the benefits that such brings.  It never ceases to amaze me how many farmers continue to operate as a sole proprietor.  A sole proprietor is “old technology”.  None of us trot out a team of horses to farm with, nor do we use steam engine tractors, as technology has passed these by.  The same can be said in farming by way of a sole proprietor.   At the seminar, we will discuss how using legal entities can save on taxes, help compensate farming heirs, protect assets, and so forth.

               Attorney Adelsperger will be discussing bankruptcy and bankruptcy alternatives.  Farmers never want to hear the word bankruptcy.  However, I do not believe many farmers know that the bankruptcy code, under Chapter 12, was specifically created for farmers after the farm crisis of the 1980’s, and is termed as a “farm restructure”.   It is important to remember that although it may be difficult to come to terms that a Chapter 12 needs to be utilized, there is no shame in doing so if it saves the farm.  Mr. Adelsperger will also discuss bankruptcy alternatives.  Often, working with the available tools ahead of time can avoid having to utilize a Chapter 12.

               Todd Landrum is a lender with Ag Resource Management.  Todd will be discussing what other sources of credit may be available to farmers.  It goes without saying that the upcoming loan renewal season is going to be challenging.   Simply put, there will be many producers who are not going to be able to secure an operating loan.  In addition, with the government shutdown, USDA loans that farmers depend on are going to be interrupted.  Not having an operating loan usually means a farmer cannot put out a crop that year.  So, having some alternative sources as to where to obtain financing is critical.

               Mike Gustafson is with Farmers First Trust.  Mike will talk about ways that farmers can defer paying capital gains at the time of sale of an asset.  Historically, one of the few tools available to a farmer was a Section 1031 Like Kind Exchange.   However, there does exist a more recent option that can be utilized for the sale of land, grain, and even machinery.  This can be very helpful to the retiring farmer who is selling land, carry grain over to the next year to be sold, but has no offsetting expenses, or selling farm machinery.   In addition, this can be a benefit for farmers that may have to sell land or machinery for cash flow purposes can also benefit from this option.   Being able to defer up front capital gains tax is immensely helpful during a time when cash flows are strained and margins are thin.

               Overall, we are hopeful that the lineup of speakers are able to address many areas that are currently of concern for farmers.  We recognize that many farmers may have had a profitable year.  However, we think it is important to know that it only takes on bad year to be a position where some hard decisions have to be made.  We believe that the topics presented will give farmers a solid understanding of the various options available, whether such options are needed now or later on.

               The seminar is being put on as a courtesy to the farming community and we are hopeful the information will be beneficial to those attending.  We would appreciate your attendance and support.

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