Acres & Assets | Navigating December: Crucial Decisions and Planning in Post-Harvest Farming

To a casual observer of agriculture, the time after harvest and during winter would look like one in which grain farmers are done with all the work of growing a crop and can sit back and relax.  Yes it does slow down significantly from the hectic pace of harvest and fall field work.  However, December is a period when producers are tackling major decisions that will finalize the outcome of the current year and greatly impact the next growing season.

During my farming career, I always looked forward to December as a time to slow down after harvest and fall tillage work was completed and the equipment was put away for the winter.  There was once again more time for family and the holiday season.  It was also a time for management details that would wrap up one year and lay the foundation for the next growing season.  Time was spent pouring over yield results and test plot information guiding future seed buying decisions.  December was also a time to deliver some amount of grain out of storage bins in order to spread out work load and to maintain grain quality in the bins.

One of the first things I did when I had a block of time was to update yield and harvest records for each farm and for our farming operation.  This information was then translated into grain inventory in our bins and in commercial storage.  Inventory, the grain available to be sold during the coming months became the key component of projecting cash flow until next harvest and new crop receipts.  The timing of future grain sales and delivery could be planned out to accommodate farm expenses, loan payments, and  living expenses. 

Come December, farmers are busy tallying revenue and expenses to date along with bills and receipts expected by the end of the year in order to arrive at their estimated profit for the calendar year.   This information will be provided to their tax accountant who will calculate estimated income taxes due based on the projected profit.  Tax planning will include a look at any revenue or expenses that could either be accelerated into the current year or delayed to the next calendar year in order to adjust the amount of taxes owed and when due.  Potential equipment purchases or sales will also be discussed in the light of tax planning.

As a part of the year end financial work, farmers will be settling up with landowners for rents due, paying down operating notes, and collecting for any money due them for custom work or hauling. End of the year is also a good time for farmers and their lenders to talk about how the past season went and to look ahead to any credit needs or changes for the coming year. 

As I mentioned earlier, December was one of my favorite periods during the farming year.  Besides the fact that weather in December was not as bone chilling as January when I would be out hauling grain, it was the time to access results from the past year and plan out the next.  I would pour over seed company information and university corn and soybean variety test plot results trying to choose seed varieties that had high yields, strong agronomic characteristics, and would fit our soils and growing season.  Meetings with seed company reps became the time to confirm the right seed varieties and get those ordered.

Next I would move onto plans for herbicides and crop protection products that would be needed for the planted acres next year.  Today it is vastly more complicated to choose the right herbicides for each crop and each farm due to weed resistances that have come about over the past decade.  What used to be easy to plan as I used the same herbicides year in and year out because of the use of tillage and cultivation to control weeds has now been complicated by changing tillage practices and changing weed spectrums.  

One additional financial task may be undertaken by some farmers at the end of the year and beginning of the next.  They will gather the necessary information to convert their cash basis profit and loss statement to an accrual basis.  Accrual based balance sheet and income statements more clearly state the true outcome of each season and the affect on profit and net worth over the years.

As you can see, December is an important time for farmers with more of a management focus as harvest and field work wrap up for the current season.  Critical financial and production decisions are made that will not only affect the raising of a crop next year, but even more importantly, the financial well-being of the farm family.