Profiles of Successful Farm Transfers on Long Island

E.B. 2010-09Suffolk County, Long Island has a diverse agricultural base and ranks first in the state for gross receipts from the sale of agricultural products. The region supports numerous wineries, greenhouses, nurseries, vegetable farms, and other assorted agricultural enterprises. Proximity to markets, ample water supplies, and excellent growing conditions make Long Island an excellent location to operate an agriculture-based business. Many farmers often delay farm transfer to the next generation for a number of reasons. Some farmers believe that a transfer will be complex and limit their options to be actively involved in the farm business. When valuable real estate is involved, some farmers feel that a farm business sale is the only way to resolve retirement planning issues. All farm examples in this publication are located on Long Island, where land values are significantly higher than other locations in the state. Choosing farms with high asset values that successfully completed transfer plans illustrates that farm businesses can remain profitable after a business transfer. Funding for this project was provided by a grant from the New York Farm Viability Institute. Developing a concentrated farm business planning and transfer process on Long Island was a need identified by a focus group comprised of farmers, agri-business, and Cornell Cooperative Extension. Prior to beginning the NY FarmNet Farm Business Planning and Transfer project, approximately ten percent of farmers on Long Island followed through on their farm business transfer and estate planning. During NY FarmNet’s project, approximately 80 percent of farms requesting farm and estate planning assistance followed through on their farm transfer and estate plan. Sixty-seven farms completed plans for their business to continue with the next generation of farmers. Most participating farms transferred the farm business to a family member. However, two farms sold business assets to non-family members. If succession plans were not in place, these farms would have sold to developers. In one case, the new owner planned a significant expansion. Specific farm information was supplied by families in this publication, with their permission. All farms participating planned on remaining in production with plans for the next generation to assume management and ownership. A total of 1,295 acres were preserved via this project, and 244 jobs were preserved or created. Moreover, additional farm receipts totaled $4.7 million annually. NY FarmNet consultants Ralph Freeman, Bill Sanok, and Jim Ashton provided technical assistance to farm families seeking business transfer guidance. Attorney Jeff Fetter worked with farm families to finalize their plans for implementation. In addition, Dale Grossman, Senior Lecturer, J.D., in the Charles H. Dyson School of Applied Economics and Management at Cornell University provided valuable editing suggestions

Directions for Using the Crop Insurance Decision Making Tool

E.B. 2008-24This crop insurance decision making tool helps users understand how crop insurance can be used to alter their exposure to risk. In section 1, the tool calculates the user’s financial exposure to risk. The tool requires that producers enter the acreage of various crops, their expected yields, and expected prices. The tool then produces a table that calculates the impact of various levels of revenue losses. The level of losses reflects losses in revenues due to declines in yields and/or prices. In section 2, users enter their per acre costs of production for various crops. The per acre cost of crop insurance is highlighted in yellow. This value is entered in section 5 where the user enters the details of their crop insurance policies. The budgets are summarized with an expected profit per acre and total expected profit on lines 43 and 44. The total expected profit for the operation is shown on line 44 column g. This value includes the cost of any crop insurance selected in section 5. Section 3 produces a table that shows the impact of various loss levels on the expected profit when no insurance is purchased. These levels are obtained by adding the cost of insurance from the crop budget to the expected profit less revenue losses. Section 4 provides links to information on various crop insurance policies. Users enter details about available crop insurance products in the blue shaded table. These parameters are required to evaluate various insurance products. If you do not wish to consider a product you can simply leave the cell blank. For instance, if users do not wish to consider Indexed Income Protection (IIP) for corn, they can leave the cells related to IIP blank. Additionally, not all policies are available for all crops. Section 5 allows users to evaluate how a variety of crop insurance tools impact the profitability of their operation. In this section the user selects the crop insurance product that they wish to evaluate on line 90. For instance, wheat growers can choose between APH and CRC insurance. Once the product is selected the range of coverage possible is displayed on line 91. The user then enters their coverage level on line 92. The per acre premium for the product selected is then entered on line 94. This value is then reflected in the crop budgets above and will be used in the projected profit numbers below. The actual yield that the producer wishes to consider is entered on line 95. This gives the user the ability to see how yield reductions would impact projected profits and insurance indemnities. The actual harvest price that the producer expects to receive is entered on line 96. This allows users to observe how price fluctuations impact projected profits and indemnities. This price is also used to calculate the CRC and IIP harvest prices. This price should correspond to the user’s forecast of futures prices at the time of harvest. The IIP Harvest price, GRP payment yield, and GRIP final county revenues are also required to forecast the potential indemnities received from these products. Please note that individual yield variations do not impact indemnities under GRP and GRIP policies. Users that do not wish to consider GRP, GRIP, or IIP policies can leave these values blank. Once the required information has been entered, the program calculates the per acre income with and without insurance on lines 102 and 103. The net income per acre and total net income with and without crop insurance are show on lines 105, 106, 108 and 109. These values allow users to quickly determine the impact of crop yield and prices losses on their net income

Case Studies on the Use of Crop Insurance in Managing Risk

E.B. 2009-02Managing the risk associated with farming is challenging. Fortunately, farmers have a variety of risk management tools at their disposal. This series of case studies examines how crop insurance can be used to manage some of the risks faced by farmers. The examples illustrate how crop insurance purchases would impact the returns generated to a farming enterprise. While the examples cover a variety of commodities and insurance products, they do not consider every possible risk that might arise. Likewise, they do not consider all of the possible financial situations that might be experienced by a farmer. Instead, they focus on highlighting how crop insurance impacts the profitability of the farm. Companion spreadsheets are available for all of the examples so that readers can examine a wider range of scenarios than those discussed in the examples. These spreadsheets and other related materials are available for download at: http://www.agfinance.aem.cornell.edu/CropIns.html Cash flow is a very important financial concept. Among other things, cash flows are used to fund personal living expenses and service debt. For a more complete discussion of the role that crop insurance can play in your risk management plan readers are encouraged to examine the following tools and readings

Use of Dried Manure Solids as Bedding For Dairy Cows

NYS Energy & Research Development Authority, NY Farm Viability Institute, Cornell Cooperative Extension, Cornell University's College of Agriculture and Life Sciences

Case Studies on the Use of Crop Insurance in Managing Risk

Managing the risk associated with farming is challenging. Fortunately, farmers have a variety of risk management tools at their disposal. This series of case studies examines how crop insurance can be used to manage some of the risks faced by farmers. The examples illustrate how crop insurance purchases would impact the returns generated to a farming enterprise. While the examples cover a variety of commodities and insurance products, they do not consider every possible risk that might arise. Likewise, they do not consider all of the possible financial situations that might be experienced by a farmer. Instead, they focus on highlighting how crop insurance impacts the profitability of the farm. Companion spreadsheets are available for all of the examples so that readers can examine a wider range of scenarios than those discussed in the examples. These spreadsheets and other related materials are available for download at: http://www.agfinance.aem.cornell.edu/CropIns.htm

Working With Farm Family Businesses: Some Suggestions and Procedures for Quality Advising

E.B. 2015-01This publication illustrates strategies and techniques utilized by four experienced and effective Cornell University professionals who collectively worked with thousands of farm families to resolve management and personal issues affecting farm profitability. A connection that all authors have is an affiliation with NY FarmNet, an organization that provides free, confidential consulting to farm families in New York State and is part of the Charles H. Dyson School of Applied Economics and Management at Cornell University. Suggestions contained in this publication are the culmination of a consulting strategy and tactics that evolved over successful careers working with farm families. A key objective in developing this publication was to provide consultants with tips and strategies to best handle consulting sessions – from preparation to follow up

Dairy Farm Business Summary: Eastern Plateau Region 1992

A.E. Ext. 93-07Dairy farmers throughout New York State have been participating in Cornell Cooperative Extension's farm business summary and analysis program since the early 1950's. Managers of each participating farm business receive a comprehensive summary and analysis of the farm business. The information in this report represents an average of the data submitted from dairy farms in the Eastern Plateau Region for 1992

Dairy Farm Business Summary: Central New York and Central Plain Regions 1993

E.B. 94-10Dairy farmers throughout New York State have been participating in Cornell Cooperative Extension's farm business summary and analysis program since the early 1950·s. Managers of each participating farm business receive a comprehensive summary and analysis of the farm business. The information in this report represents an average of the data submitted from dairy farms in the Central New York and Central Plain Regions for 1993