Posts

‘This One Here Is Gonna Kick My Butt’—Farm Belt Bankruptcies Are Soaring

‘This One Here Is Gonna Kick My Butt’—Farm Belt Bankruptcies Are Soaring Trade disputes over agriculture add pain to low commodity prices that have been grinding down American farmers for years Note:  This is an article that ran in the Wall Street Journal on February 7, 2019. I felt that it did a good job encompassing most of what farmers are dealing with...low prices, bankruptcies, depression, suicide, etc.   A wave of bankruptcies is sweeping the U.S. Farm Belt as trade disputes add pain to the low commodity prices that have been grinding down American farmers for years. Throughout much of the Midwest, U.S. farmers are filing for chapter 12 bankruptcy protection at levels not seen for at least a decade, a Wall Street Journal review of federal data shows. Bankruptcies in three regions covering major farm states last year rose to the highest level in at least 10 years. The Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, had double the bank

Will your farm be in the 97% club or the 3% club?

Image
Will your farm be in the 97% club or the 3% club? One of the overriding goals that farmers have is that their farm operation continues on to a successor.  Then why is it so difficult to get farmers to put a succession plan in place?    A recent statistic stated that only 33% of all farms in this country will pass to the next generation.  That number does not seem shocking.  Of the farmers that are over 60 years old, representing the “current generation”, it is entirely plausible that only 1/3 of the farms transfer to the “next generation” (i.e. people aged 30-60) over the next 15-20 years when the current generation retires.                The same statistic source went on to say that of the 33% of farms that transfer to the “next generation” only 10% of those will pass to a third generation.   Whoa.   Let’s take a second and do some math.   We have roughly 2 million farms in this country.   If only 1/3 transfer to the “next generation”, then that means we drop to 660,

Midwest Seminar Succeeds in Providing Valuable Information to Farmers

Image
  Midwest Seminar Focuses on Current Financial Challenges in Farming  Last week we had two live seminars addressing challenges we are facing as farmers in the current farm economy.  Numerous farmers attended our seminars and many more attended via our internet live stream.  Overall, people were very engaged with the speakers and a lot of useful information was provided. Thank you to Doug Adelsperger for speaking on Chapter 12 bankruptcy and bankruptcy alternatives.   I would also like to thank Todd Landrum for speaking on alternative financing that centers around an operating loan being provided that is secured by growing crops, and not hard assets such as land and machinery.  Lastly, thank you to Mike Gustafson who traveled all the way from South Dakota to discuss the deferment of capital gains, which is a very important topic to the retiring farmer or farmer that is required to sell assets that are subject to capital gains.   Here are some pictures and you can find the
Image
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 22 nd will be at the Honeywell Center in Wabash, Indiana, at 6 pm, while on the 23 rd 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, fa

MIdwest Professionals to Host Free Seminar to Assist Farmers

Image
Midwest Professionals to Host Free Seminar to Assist Farmers            Please consider joining us for an upcoming seminar that will focus on current issues farmers are facing due to the downturn in the agricultural sector.  We are hopeful these topics will give farmers valuable information that can assist them during these difficult times.  N

Liability Insurance May Not Save Your Farm, but an LLC Can

Image
Using multiple LLC's can drastically increase the liability protection for a farm.  This article discusses the layout of doing so.  First though:  I generally hate disclaimers, but I find it necessary to state a few.    First, this article is for general information only and is written for the benefit of fellow farmers to consider in structuring their farms.   Second, state laws vary, and this article is not state specific.   Third, if you feel the need to comment on whether you disagree or that I’m wrong, please first go to:   https://www.extension.purdue.edu/extmedia/ppp/ppp-91.pdf .    It is an excellent publication from Purdue that is in line with what I am writing about in this article and gives some real life examples.    In the last article, I wrote about how liability insurance is a necessity, but with the trends in jury verdicts, it may not be enough to save the farm.    In other words, you could get a judgment against your farm for more than the policy limits

Recent Jury Verdicts Confirm Your Liability Insurance Likely Not Enough to Save Your Farm

Image
If there is one thing I wish I could get clients to understand is the fact that even if your farm has liability insurance, you are likely under insured with your current liability coverage.    Essentially, if you have a million dollars of coverage, or several million, the coverage is peanuts now days.   How big a bag of peanuts? Well, here in Indiana we recently had a whopping 35 million dollar verdict against a defendant for causing an accident that left the plaintiff a quadriplegic.   Similar verdicts have been handed down across the country as of late.    You can read about it here:   https://www.theindianalawyer.com/articles/45836-recent-35m-verdict-is-among-largest-indiana-jury-personal-injury-awards    As one attorney stated “ jurors are increasingly less offended by requests for million-dollar-plus verdicts”    Whoa.   Wasn’t it not too long ago society was up in arms about a woman in Texas getting several million for being burned by hot coffee?   It sure was.   But,