Operational Management

Oct. 12, 2022

by Rejeana Gvillo

Canada is poised for a massive harvest this year, especially compared with the drought-reduced crop of 2021.  Throughout the growing season, FBN® Research has been assessing whether Canada’s rail system and broader infrastructure will be prepared to handle a record crop. Based on previous capacity volumes for key grain crops including wheat, barley, canola, corn, oats, peas, flaxseed, soybeans and more, we are confident the country can handle a bin-busting record harvest. What if yields are max potential vs. history? To begin our analysis, we looked at planted area for 2022 compared to 2016 and 2020. In 2022, planted area for the aforementioned crops is higher.  Next, to gauge what total harvested area could be, we applied the average harvest percent in 2016 through 2020 by crop to 2022’s planted area. By taking the maximum yield recorded across history for those crops and applying that to the 2022 forecast harvested area, we projected a production total.   Based on those assumptions, we estimated a major grain production total of about 4 billion bushels; this is marginally larger than both the 2016 and 2020 totals. Assuming all of these crops hit the previous record yield, the total production outlook would not be at a volume that causes concerns about testing Canadian storage infrastructure.  Can growers handle record-breaking harvest delivery and storage? If farmers are facing a four billion bushel crop, can the crop be managed by storage and delivery?  Let’s first look at storage. The maximum stocks volume reported for commercial and farm was in December 2019 at around 72 MMT.  Let’s assume we export an average of 5 MMT each month between August and December for a total of 25 MMT. Now, let’s assume we use around 25 MMT of grain over the course of those months as well (domestic use has exceeded 24 MMT between August and December in 2016, 2019, 2020, and 2021). This means 72 MMT of capacity + 25 MMT of exports + 25 MMT of use could be handled around harvest time.  That translates to the need to handle 122 MMT of grain at harvest + roll over stocks.    But, even at 122 MMT (using 36.7437 pounds/bushel as a generic conversion) gives us a capacity minimum of about 4.5+ billion bushels — which is well off the 2022 projected total and gives us room for rollover stocks (which are light this year).  At this point, even with a 4 billion bushel or so crop, we believe Canada’s infrastructure can handle the anticipated record harvest.  What does this mean for Canadian farmers?  While Canada is expected to harvest a hefty crop, we are not overly concerned about that crop testing existing infrastructure. With light rollover stocks, storage use right now is probably at one of its lowest totals in years. We also anticipate a surge in exports as harvest season gains momentum. Copyright © 2015 - 2022 Farmer's Business Network Canada, Inc. All rights reserved. The sprout logo, "Farmers Business Network," and "FBN," are trademarks or registered trademarks of Farmer's Business Network, Inc. or its affiliates. The material provided is for educational purposes only and may contain forward-looking statements based on the beliefs of the authors as well as assumptions, expectations and projections made by and information currently available to them. Actual results may vary. Neither Farmer's Business Network Canada, Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in the material and any liability therefore is expressly disclaimed.

Article Operational Management

Will Emerging Carbon Markets Add Value for Farmers?

Feb. 09, 2022

by Kevin McNew

When it comes to finding ways to reduce carbon, farming is often mentioned as a sector that has promise in reversing climate change. This is because farming practices – like cover crops and reduced tillage –  can limit the release of carbon into the atmosphere by “sequestering” it in the soils.   Unfortunately, policies and markets are still trying to evolve that will give needed price signals to farmers for adopting these practices. The idea of a market for “carbon sequestration services” is admittedly abstract, and the varying degree of state, national, and even international policies on carbon has created a difficult landscape for the development of a unified carbon market. Note: This article is based in part on the FBN® Roundtable discussion from January 20, 2021 moderated by FBN Chief Economist Kevin McNew and included panelists Dean Watson, President of POET Grain, US Representative (SD) Dusty Johnson, Steele Lorenz,  Head FBN Sustainable and Brendan Jordan, VP Transportation, Great Plains Institute. Watch now Here, we distill the key factors that we believe will shape the future of Carbon Markets and Farming. Necessary pillars of a carbon market For a market to function properly it generally requires three key actors. These include: Consumers (or buyers) which have a need or desire for a product/service. Producers (or sellers) who can effectively deliver, make or create the product/service.  Institutions that provide rules for fair trade, legal enforcement, or verification. In the case of carbon, the evolution of carbon markets has largely been focused on the service of “carbon sequestration”.  In this context, the consumers of carbon sequestration services are companies that emit carbon as part of their operations. As society begins to impose costs on carbon emission through direct policies that limit carbon, companies must decide whether they will take steps to change their practices (which is costly), or “buy carbon offsets” from a supplier to meet their carbon reduction needs. Here, farmers are one such supply source for carbon sequestration. A company could potentially work with farmers, offering to pay for a set of practices that the farmer will undertake that yields a defined quantity of carbon removal. Hence, a market is born. Today, the market for carbon services is still at its infancy. The world’s first international emissions trading system started in Europe in 2005, which mandated compliance of certain sectors to reduce carbon emissions. This is what is often referred to as a “mandatory” carbon market as government policies require carbon reduction, and this regulatory obligation on companies creates a demand to pay for carbon reduction services. In the United States, regional examples of mandatory programs exist. California created a mandatory system and the Regional Greenhouse Gas Initiative (RGGI) was formed by 11 Northeast states, but today no overarching US system exists as in Europe.  At the other end of the spectrum, you have “voluntary” carbon markets. Here, companies pledge to reduce their carbon footprint and these promises generally involve a mix of own-company emission reductions with additional reductions achieved through open market purchases of carbon offsets. Unlike a mandatory market, companies have no legal obligation to reduce carbon and as such their demand for carbon services could be viewed as less robust than those companies that fall under mandatory authorities. However, investor and societal pressure are signaling more companies to engage openly in carbon reduction making voluntary participation by companies necessary for future financial success.  In this space, food and ag companies like Tyson, Unilever and Danone are just a few examples of companies actively engaging at the farm level around carbon in an effort to meet corporate sustainability goals. Drivers of carbon services: Grain buyers  Today, grain buyers and end-users are still trying to find value in the carbon space. One avenue where there are direct linkages is in ethanol. Here, US ethanol manufacturers have a direct line into a carbon-tied market through California’s Low Carbon Fuel Standard. This policy scores motor fuels differently based on the carbon intensity of the product.  Fuels that are produced with a low carbon score are rewarded versus high carbon fuels which are not. Under this yardstick of carbon intensity scoring, ethanol gets a fixed premium regardless of how the underlying feedstock was produced.  POET, which buys around 1 billion bushels of US corn every year to make ethanol, in conjunction with FBN , has been advocating the California policies be adjusted to allow for a variable score that would be derived from practices used at the farm level. Corn produced from practices that reduce carbon (or what is deemed a low carbon intensity score) would fetch a premium, thereby giving the farmer a price signal to adopt more carbon friendly practices.  To date, most of the effort by POET and other grain buyers has been around building an understanding between carbon intensity scores and farming practices. Indeed POET and FBN have been researching this issue with real-world farm trials. The results of these studies are impressive on two fronts: If you simply look at existing practices that corn farmers use today (or at least as represented by their sample of farms) then the carbon intensity score of the average is better off than what California currently pays today as a fixed rate for ethanol. In other words, by not taking into account existing agricultural practices of corn production, farmers are losing out on possible value. Even more important, if the California laws were optimized to reflect the carbon intensity of each unique farm’s practices, the potential rewards to a farmer would be impressive. POET and FBN found some premiums for low-carbon corn could be as high as $0.75 a bushel. Opportunities for farmers in evolving carbon markets So far, our discussion has mostly centered around the linkages up the chain to the fuel market. But in grain, are there opportunities from a carbon-based grain buying program for food and feed end-users?   The answer is yes according to Steele Lorenz, FBN ’s Head of Sustainability. Companies are setting clear goals at reducing emissions and offering transparency about their progress. This is especially true for publicly traded companies. NASDAQ’ Environmental Standards Group reported that over 40% of Corporate Annual Reports they sampled had clear targets for greenhouse gas emissions. Today, FBN works in tandem with Tyson Foods around their goal to have 2 million crop acres used for feed grown with sustainable practices.  While the food and feed space today may not have clear linkages to regulations which provide market-based incentives for carbon reduction, there are still important indirect consequences for companies that are not taking these steps. First, financial institutions like banks, investment firms and insurers are increasingly requiring or at least monitoring company metrics on these goals thereby signaling the importance that companies have demonstrated programs for carbon reduction. Second, while policies that drive carbon reduction may not exist today, they likely evolve in the future, giving early adopting companies a competitive edge if carbon regulations are enacted. Our view on the future of carbon markets and linkages back to farms for value creation is bullish. There is still much to be done around policies, institutions, and systems that will support the transmission of carbon value back to the farm but those necessary building blocks will likely be stood up in coming years.  What will a farmer need to do? More than crop practices  Carbon based markets for agriculture are still yet to be fully formed. Will carbon intensity of a farm product like corn be the attribute that is valued? Or will companies act to “buy” carbon sequestration services, and as such the amount of carbon sequestered by a farm will become the traded metric. These two paths of how carbon could be traded – as an “Attribute” using carbon intensity, or as a “Volume” based on the amount of carbon sequestered – are not necessarily restrictive in terms of companies or farmers choosing one or the other but they could involve subtle differences worth considering. In an Attribute system, carbon intensity becomes a verifiable and priceable metric assigned to every bushel of grain. This is not too dissimilar from how grain is treated today based on grades for moisture, protein, etc.. But here, the carbon intensity score must be verified based on the inputs and practices used. Farm records on farm fuel use, types of fertilizer and amounts are data points that will be necessary to verify and compute carbon intensity. Farming practices like tillage and cover cropping also play into scores. For a Volume system, which trades carbon as a financial asset directly, the farmer will need data and verification on tillage practices and cover crops. These will likely involve longer term commitments by the farmer to maintain those practices across a multi-year program, thereby assuring the buyer a fixed supply for a lengthy period of time. In contrast, an Attribute system will likely be tied to specific bushels sold and as such farmers could maintain flexibility around their willingness to participate.   Regardless of which way a farmer goes, the cornerstone of either program will be data. This will start with machine readable data like what is generated from modern planter, applicator and harvester equipment.  Those data sources will likely become industry requirements for participation and streamline verification and value creation back to the farm, so making those investments today may help reap benefits quickly once carbon markets develop. The material provided is for educational purposes only. It is not intended to be a substitute for specific individualized tax, business, legal, investment or professional advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner, or investment manager. Neither Farmer's Business Network, Inc. nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in the material and any liability therefore is expressly disclaimed. Copyright © 2014 - 2022 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN”, “FBN Direct” are registered service marks of Farmer's Business Network, Inc.

Dec. 09, 2021

by FBN Network

We’re excited to be welcoming new members coming to FBN® from POET. We’ve been working with farmers and their data since 2014, and we know you care about how your data is used and shared -- and we take your privacy seriously. We appreciate that you are considering trusting us with your data and protecting that information is an important part of how we conduct our business. For more information on our information practices, including the kinds of information we may collect, how we protect that information, how we use and share that information, please visit our Privacy Policy . Below are some FAQs we’ve put together that will help you better understand some questions you probably have right now, as well as some you may have as you begin to use the app. POET & FBN FAQs How do I get access to my POET sales data in the FBN app? Do I need to create an FBN Account to access my POET data in the app? How does FBN use my data? Can POET access the data I add to my FBN account? Who can I talk to if I have questions? Feature FAQs My Sales Contracts Where can I see my POET contracts? What can I do if I don’t see all of my POET contracts in my FBN account? How can I see how many bushels are left to deliver on a contract? Tickets Where do I go to see my scale tickets? How do I see what specific tickets were applied to a contract? Settlements Where can I see my settlements? Bids Where do I go to see POET bids? How can I favorite my preferred delivery locations? How can I set a Price Alert? Where can I find basis charts? POET & FBN Data FAQs How do I get access to my POET sales data in the FBN app? Go to the FBN App for POET landing page and follow the prompts. This is a special process only available for POET growers. So please follow these three steps to successfully connect your POET sales data to the app. Enter the mobile phone number used for your POET account and you’ll be sent a text message with a special link. This link is crucial for initiating a “hassle free” FBN account setup. Click the link in the text you’ll receive and install the FBN app. When you first open the app, you’ll see a special page for POET customers. Click “Connect with POET” and that will initiate the connection of your POET sales data to your FBN account. Do I need to create an FBN account to view my POET sales data in the app? Yes. If you would like to view your POET sales data through the FBN App, you’ll need to follow the steps above to get started with the FBN App. FBN membership is free, and you are not obligated to buy anything from FBN or contribute any other data. What is the value of becoming an FBN Member? The FBN Network was launched in 2014 by a handful of farmers as an independent, unbiased and objective farmer-driven information source. By providing  data to FBN , farmers gain access to the FBN Network, an anonymized and aggregated data analytics platform that enables farmers to make better decisions on their farms. Today, FBN is a continually growing network of over 35,000 farmers using 100% anonymous data-sharing & unbiased benchmarking to gain valuable and trustworthy insights on virtually all aspects of their farm operations including, optimal farm practices, seed performance, inputs pricing and commodity markets. The FBN Network also provides business specific tools that allow farmers to put their own data to use in managing their business operations. How does FBN use my data? FBN uses your data for the following purposes which are required to provide you with the benefits of the FBN Network, including but not limited to: Creating your FBN account Providing you with FBN Network features, such as access to the Crop Marketing platform where you can view bids and submit offers to POET, view your contracts & scale tickets, eSign contracts, have daily access to market intelligence reports, and manage your production data while viewing additional at-a-glance details like target breakeven and percent contracted & available. Providing operational and technical support, including improving or enhancing our products and services to you Communicating with you, such as sending you electronic notifications regarding your grain bid and offers, and for marketing purposes such as offering products and services to you in accordance with applicable law. Conducting research and analytics that help our FBN Members make better decisions on their farms Complying with our legal and regulatory requirements Protecting the rights, property, safety or security of the FBN Network, our FBN Members, employees or others and prevent fraud or illegal activity Enforcing or applying our Terms of Service . Can POET access the data I add to my FBN account? No.  FBN does not and will not share data you add to your account with third parties, including POET. POET can only see the offers you submit directly to the POET merchandising team. In that case, your Merchandiser would see the offer you submitted. Who can I talk to if I have questions? Feel free to reach out to either FBN or POET with any questions you may have. If you have questions about the app or need help getting started, reach out to FBN s Success Team for POET Growers. Dahn Clemens | p: (605) 307-9914 | dclemens@farmersbusinessnetwork.com Tory Johnson | p: (605) 307-9914 | tjohnson@farmersbusinessnetwork.com If your questions are specific to POET or your POET account, please reach out to: Angie Prochaska | p: (641) 860-4259  | PGApp@poetep.com Feature FAQs My Sales After you open the app, to view your POET sales data simply tap on the Market icon at the bottom of the app, and then tap My Sales at the top of the Market screen. Contracts Where can I see my POET contracts? Tap on the Market icon at the bottom of the app, and then tap on My Sales at the top of the Market screen. My Sales will open and you will just need to make certain the dropdown menu is displaying Contracts to view all of your imported POET contracts. What can I do if I don’t see all of my POET contracts in my FBN account? Sometimes, contract information does not refresh automatically. On the My Sales tab, change the “All” filter to something else and then change it back to “All” which will refresh the information being displayed. How can I see how many bushels are left to deliver on a contract? Scroll through your contracts and find the one you have delivery questions about. Tap on it, and it will display details of the contract including total contracted volume, delivery period, and bushels remaining. Tickets Where do I go to see my scale tickets? Tap on the Market icon at the bottom of the app, and then tap on My Sales at the top of the Market screen. My Sales will open and you will just need to make certain the dropdown menu is displaying Tickets to view all of your imported POET scale tickets. How do I see what specific tickets were applied to a contract? Scroll through your contracts and find the one you have questions about. Tap on it, and it will open and display details of the contract including. Scroll to almost the end of the contract and you will see the tickets section which will list the tickets that have been applied to the contract. You can also tap on the ticket to view the specific details of that delivery. Settlements Where can I see my settlements Tap on the Market icon at the bottom of the app, and then tap on My Sales at the top of the Market screen. My Sales will open and you will just need to make certain the dropdown menu is displaying Settlements to view all of your imported POET settlements. How do I see what specific settlements were applied to a contract? Scroll through your contracts and find the one you have questions about. Tap on it, and it will open and display details of the contract. Scroll to almost the end of the contract and you will see the Settlement section which will list the settlements that have been applied to the contract. You can also tap on a settlement to view the specific details of that delivery. Bids Where can I go to see POET bids? Tap on the Market icon at the bottom of the app, and then tap on Bids at the top of the Market screen. Bids will open and will automatically display elevators near you, including your nearest POET facilities. How can I favorite my preferred delivery locations Simply tap the star next to the location you want to favorite. Once you have selected a favorite the star will become solid blue. You can also remove the favorite at any time by tapping on the star again. The favorites feature allows you to indicate your most preferred delivery locations and automatically bring those facilities to top of your list of bids.  To get more detail on your favorites you can press on the Favorites tab, directly right of Cash Bids. By clicking this tab it will bring you to a view with only your favorited locations. In this view you have the advantage of seeing a certain locations bids over a 6 month periods. The delivery period can be adjusted in the dropdown directly underneath the Favorites tab.  An additional feature in the favorites tab are basis charts for specific locations. By clicking on the delivery a new screen will appear with a basis chart. The graph displays three different data  sets over the past 12 months:  the locations' basis history, the regional average and the five year average. You can get out of this view by clicking the X in the top right corner. How can I set a Price Alert? From the Bids screen, tap on the Set Price Alert button. After tapping, a new screen will appear allowing you to customize the alert to meet your expectations. You can choose from cash, basis, or futures pricing. As well as the target price and alert frequency. Where can I find basis charts?  To find the basis charts/mapping tool, tap on the Market icon at the bottom of the app, and then tap on Bids at the top of the Market screen. On the Bids screen switch from CASH BIDS to FAVORITES . Then select a location and tap on a delivery period . A new screen will appear with an interactive basis chart. You are able to toggle throughout the graph to see past data and trends. FBN Market Advisory services, including FBN Market Intelligence, are offered by FBN BR LLC - NFA ID: 0508695. Disclaimer: Commodity trading, including futures, hedging and speculating, involves substantial risk of loss and may not be suitable for all investors. Past performance is not necessarily indicative of future results.All information, publications, and reports, including this specific material, used and distributed by FBN BR LLC shall be construed as a solicitation. FBN BR LLC does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71. Copyright © 2014-2021 Farmer’s Business Network, Inc. “Farmers Business Network,” “FBN,” and “Farmers First” are registered trademarks of Farmer’s Business Network, Inc. All other trademarks are the property of their respective owners.

Article Operational Management

Community Builder of the Month: Alec Ibach

Jul. 15, 2021

by Mark Wilson

Farming has always been in Alec Ibach’s blood. As a fifth generation farmer and rancher from Sumner, Nebraska, it seemed like he was destined to end up running a farm.  After high school, he went to the University of Nebraska and majored in Animal Science. And after college, he went to work as an ag lender for four years. While that wasn’t his passion, it gave him some great experience outside the farm.  Ultimately, Ibach says it taught him a lot of great lessons about what makes a good manager and what makes a poor manager.  When Ibach did return to his family’s cow calf and row crop operation, he was better prepared to take on the responsibility of managing a diversified farm. So when his father took a government role in Washington, D.C., he was ready to manage the operation in his parents’ absence.  Become an FBN ® Community Builder today To supplement his income while working on the family farm, Ibach decided to start his own seed business. He was introduced to the Community Builder Program through an old friend who convinced him to layer FBN 's crop protection and livestock products on top of his seed offering. Ibach says that buying through FBN has brought competition to the table and it has forced other suppliers to be aggressive and ultimately, that only helps farmers.  FBN has become his sole chemical supplier. When he puts seed packages together and agronomy and spray recommendations, he uses FBN chemicals. "We’ve seen way more savings on the input side and being able to be competitive, you know, it just opened my eyes to the amount of money that can be saved when you’re buying through FBN ." One of the biggest hurdles he faces when talking to farmers is that they don’t always know what FBN does or what they offer. And Ibach is always quick to point out that it’s Farmers First ® and tries to do everything to help farmers or add value to their operations.  Some of the big suppliers of pharmaceutical supplies will look at FBN as a competitor and disrupter but Ibach says that as a producer and Community Builder, his goal is to make tools more accessible and offer more competitive pricing for farmers. "On the chem side, we’ve really been able to expand our business and it’s really helped us as a business grow and become more financially stable. We’re a startup and it’s only our 3rd year as a business but being able to supplement that income is never a bad thing. I mean, that’s special to us." While he sees the benefits on the chem side of his business with direct shipping, he also sees the value that FBN is adding for livestock producers.  “When you talk about livestock, I’m a cow calf producer, and when it comes to taking care of your animals and you have specifics like your ration, you have your mineral packs, you’re comfortable with those things and a lot of livestock guys haven’t switched those things in years. We’ve had the same mineral for 20 years until we switched to FBN .” And he only sees good things ahead for FBN in the livestock industry. He works closely with his Account Executive, Taylor, to continue building his business organically. But he knows it’s going to take time, and he’s hoping to make more people aware that he offers livestock products.  “Being in a community and working with other producers is going to bring word of mouth and will eventually grow your business. You need the desire to go and work with customers and help farmers solve problems. You can be a tool in their toolkit that they can lean on. You’ve got to be willing to provide that service piece as a community person with local knowledge.” That’s what it means to be a community builder. Interested in diversifying your income? Become an FBN Community Builder today. Copyright © 2014 - 2021 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN”, “FBN Direct” are registered service marks of Farmer's Business Network, Inc. Products sold or distributed through FBN Direct are offered by FBN Inputs, LLC and are available only in states where FBN Inputs, LLC is licensed and where those products are registered for sale or use, if applicable.

At the end of the day, all farms run on numbers. Input costs, grain prices, land values—finances are an unavoidable part of any operation. Many growers look at organic farming as a possible income boost, thanks to the high premiums often seen in organic grain. But the financial aspect can also be one of the largest barriers to entry. The learning curve of new practices, combined with the 36-month transition period to get fields certified organic, can be daunting to the pocketbook.  Finding a good lender for your organic transition That’s why it’s important to have a good lender who understands the challenges—not to mention potential for success—of going organic and can walk with you as you take your next steps. Want to know more about the finances of organic farming?  So what are these lenders looking for? Here are few things to consider: 1. What is your plan? It doesn’t have to be set in stone, but the key is to show an awareness of what it’s going to take to get through the transition period. Banks want to see that you see the risks, have a plan to work through any learning curve and are comfortable starting small .  2. How much equity do you have? With recent low commodity prices, it’s tough to have enough cash laid away to make the transition stress-free. But if they’re going to lend you their money, banks need to see some built-up equity in the operation and/or your ground to leverage any losses. 3. Do you have a partnership? Whether it’s with an organic consultant—such as AgriSecure—or your banker, lenders want to know that you are willing to ask the right people for help and are realistic about your operation’s potential for the project. Get the support you need for your organic transition Some ag lenders have created options specifically for farmers interested in transitioning to organics. They know what it takes to make an organic operation successful, and their goal isn’t just to get you through the transition but to help your farm succeed—and create a legacy for years to come. If you need help creating a plan to transition to organic farming, contact AgriSecure today . 

Given today’s market conditions, now might be the right time for you to consider transitioning acres to organic row crop production . Organic farming may not have seemed as feasible—or practical—when commodity markets were stronger. But as demand for organic food continues to trend higher, prices for organic corn, soybeans and wheat remain well above those of their conventional counterparts.  This presents you with an opportunity to increase profit potential on your operation. Are organic row crops right for your farm?  If you’re exploring a transition to organic, here are three questions you’ll want to ask yourself to help inform that decision: 1. Are your fields well suited for organic production? Fields that are larger, relatively flat and not irregular in shape are generally better for organic row crop production. This is because it’s easier to do tillage work on them as compared to fields that have a lot of point rows or extreme slopes. You’ll also want to be sure your fields include areas that don’t get too wet over prolonged periods of the season, especially around planting when you’ll need to get in to do fieldwork.  2. Can you build and sustain the necessary management capacity? Farmers who enjoy the most success with organic production have good management skills and are able to execute their plans. There are more details to oversee compared to a conventional system, too, and thus good management is a necessary component of a successful organic farm. 3. Are you willing to learn and adapt as you build an organic operation? Organic farming requires an open mind and a willingness to try new approaches. To be successful in organics over the long term, you may not be able to rely on some of the tried-and-true crop rotations employed in conventional farming. As with any venture that looks for new ways to achieve outstanding results, transitioning to organic farming depends on embracing the learning curve. Everything may not go as planned, especially not the first time, but there is almost always a suitable solution or workaround to be found. Want to know more about transitioning to organic?  One of the key benefits that organic farming provides you is the ability to scale your operation in a way that makes sense for you. In fact, conventional crops and organics can both play a role on your operation—either for the short term or indefinitely. And if at any point you decide organics are not the right direction for your farm, you can easily return to a fully conventional operation. Initiating the transition process offers the opportunity to increase your margins and your profits in a range of market conditions. Get help evaluating your options and making a plan  If you’re interested in transitioning acres to organic or expanding your current level of organic production, we strongly recommend that you work with an adviser like AgriSecure. No matter what stage you are in, it’s never too early—nor is it ever too late—to consult with experts who understand everything that goes into a successful transition to organic.

Jan. 14, 2020

by KPMG Spark

The holidays have wrapped up and with the new year come hopeful plans. But in the midst of all the cheer you face a looming responsibility—tax season.  It’s a time of year most of us don’t look forward to—gathering receipts, remembering what expenses we had (but may have forgotten to write down!), preparing financial information for banks and lenders, budgeting for the coming year and making that appointment to meet with your CPA. This can all feel quite overwhelming! Here’s how you can prepare yourself for the tax deadline KPMG Spark has teamed with Farmers Business Network℠ to help farms and agricultural businesses get ahead of the process. Here are the top five ways FBN and KPMG Spark can help you prepare for tax time: 1. Identify sources of receipts  During the year, you receive money, property and/or services from many sources. Your records can identify the source of your receipts. You need this information to separate farm from non-farm receipts and taxable from nontaxable income. This helps your accountant properly report this information to the IRS. Gather your revenue receipts, invoices, checkbook and bank statements. You can use a simple code—such as “B” for business, “P” for personal and “?” for things you might be unsure about—to delineate these items. This simple process will help your accountant quickly summarize information and figure out those with a “?”. 2. Flag business and personal expenses  You want to get the greatest tax deduction possible, so you also need to identify all business expenses. You can use the same process as above—gather any expense receipts, credit card statements and your checkbook, and then take a few minutes to categorize expenses. This will make the process go much more quickly with your accountant—and may jog your memory as to anything you might have otherwise been overlooked. 3. Prepare financial statements  Typically, financial statements have at least two components: a profit and loss (or income) statement and a balance sheet. If you’ve completed the above two steps, you’ll already have most of the information for the income statement. However, it’s also helpful to collect income information reported to you by other people – such as an employer (on Form W-2), a bank (typically on Form 1099-INT), the government (on Form 1099-G), or a cooperative (on a Form 1099-PATR). Typically these come in around the end of January. You also should set aside the following: bank statements as of December 31; purchase documents for equipment, trucks, livestock, etc.; and closing documents for any assets you purchased with a loan. This information, along with the income and expenses you identified in steps one and two, will aid in preparing complete and accurate financial statements. 4. Complete other tax information  In addition to completing your tax returns, almost everyone who receives income from you also must prepare their own tax return. If you had people working for you during the year, you need to report to those people the amounts you paid to them for their services. For example, if someone worked for you as an employee, you’ll need to report the wages you paid to them on a W-2 and if you paid a contractor or service provider, you may need to send a Form 1099 to them. Again, your accountant can help you with filing the forms. 5. Keep supporting items for your tax return  For this fifth step, the good news is you really don’t have to do much of anything! This is what the IRS would tell us: “You must keep your business records available at all times for inspection…If the IRS examines any of your tax returns, you may be asked to explain the items reported. A complete set of records will assist in the examination.” File paper items in a place for safekeeping and organize corresponding digital files as well. This way, you’ll have the information if you need to access it in the future. PRO TIP: As we mentioned earlier, FBN has joined with KPMG Spark to leverage Spark’s web-based, real-time booking service to automate accounting and tax preparation for farms and agricultural businesses. Throughout the year, your read only business transactions flow in real time into the Spark platform, where they are automatically categorized into revenue, expenses, assets and liabilities. You are assigned your own bookkeeper, lead accountant and CPA, who ensure the information is processed correctly and is available, so you can view your income statement or balance sheet and other information at any time. We do the reconciliations for you. After the close of the year, the information is ready for your tax accountant or CPA—or Spark can also complete your tax returns if you prefer. See how KPMG can work on your operation We’re offering significant discounts for members of the FBN network! Get more information and schedule a demo to find out how KPMG can help your operation so you can get back to doing what you love. Update: An earlier version of this  guest post mentioned the April 15 federal filing deadline; please note that the deadline for farmers who did not make estimated tax payments is March 1, 2020. The views expressed in this article are the author's alone and not those of Farmer's Business Network, Inc., its affiliates or members.

Dec. 31, 2019


Earlier this month at Farmer2Farmer V , POET Founder and CEO Jeff Broin presented alongside Farmers Business Network℠ CEO Amol Deshpande during a well-attended breakout session on agriculture and the climate revolution. Time constraints prevented them from addressing each and every audience question, so we figured we’d share responses to some of the top questions and concerns we heard in Omaha. POET Founder and CEO Jeff Broin presents alongside FBN CEO Amol Deshpande during "Agriculture's Critical Role in the Climate Revolution," a Lunch & Learn breakout session during Farmer2Farmer V in Omaha. Sustainability has become a critical issue for everyone, especially for those working in agriculture. How are farmers rewarded for adopting regenerative agriculture practices that can reduce and offset CO2 emissions, support the water cycle, etc.? The truth is this is still a work in progress. Farmers have historically been at the front lines as stewards of one of our most precious resources—the land. As Big Oil grew and took away our use of renewable products, farmers were put in a difficult position and developed a bad reputation. The oil industry spends billions of dollars each year perpetuating these false narratives. We need to work together to turn around this perception, which will position farmers to be rewarded for their hard work toward sustainability. Many of the rewards for farmers to practice sustainable agriculture come from their desire to leave the world a better place. We work with countless generational producers who have a desire to leave the soil and water in better shape for their children and grandchildren. While there are also some federal, state and local policies which provide incentives to farmers for practicing sustainable agriculture, there is certainly more that can be done. You acknowledged that agriculture is not the problem—we are the solution. How do we change the mindset so people recognize what we’re doing and what our potential is? What can we do to better align all our efforts around climate solutions? We need to work together across many industries with the same voice and same messaging. Associations like Growth Energy and U.S. Farmers and Ranchers Alliance are doing important work carrying our messages to policymakers, the media and the general public. Consider joining an organization, sharing your message on social media, donating to a Political Action Committee (PAC), reaching out to your elected officials and correcting any misinformation you may see or hear.  To learn more about POET’s PAC, visit poetpac.com . Learn more about Growth Energy’s PAC at growthenergy.org/membership/growth-energy-pac . How can POET and other organizations realistically fight to reduce our dependence on oil when the oil industry controls so much money within our economy? What can we really do to effect change and bring market dependency back to agriculture? This is an important effort that takes lots of time, attention and financial resources. POET has team members dedicated to fighting this effort every day, and we’ve made progress over the years, including the approval of year-round E15 nationally earlier this summer and the approval of sales in NY state this fall. We are focused on telling our story to key audiences and engaging in the political process through direct meetings with the administration and Congress, but we need your help telling your story and financing the PACs that make this work possible. Government subsidies and “mandates” are two reasons the general public—including some farmers—are not on board with renewable fuels. But how big of a role do subsidies and mandates actually play in the profitability of renewables in general and, more specifically, ethanol? This is a common misconception about the biofuels industry and we need your help setting the record straight. Today, the grain-based ethanol industry receives zero federal subsidies. This is one of the reasons we’re a threat to the status quo. Meanwhile the oil industry gets billions in subsidies every year. If we can create a truly free market in the fuel industry, ethanol will win out over oil because we’re affordable, environmentally friendly and American-made.  The United States is already ahead of many other countries when it comes to supporting a clean environment. How are we going to lead in a way that helps change the rest of the world? We need to be leaders in addressing climate change through sustainable agriculture and promote the impact that is achievable if we work together toward common goals. By sharing industry best practices globally, we can expedite needed changes that will help advance our climate goals. The U.S. has led and will continue to lead the way in agricultural practices, but with that comes the responsibility to help lift our peers across the globe.  POET was recently part of a delegation representing biofuels and American farmers at the UN Climate Change Conference. The delegation used the opportunity to speak to the power of biofuels and agriculture as a solution to the climate crisis to countries around the world. In addition, POET’s nonprofit organization, Seeds of Change, works to provide education, increase the use of renewables and empower communities throughout the world.  How can we get other farmers to use E15? Just as important, how can we get retailers to sell E15? Use higher blends of ethanol at the pump whenever possible and encourage your friends and family to do so as well! Ask your retailers for more ethanol and spread the word to use the fuels. Auto manufacturers will deliver the cars if consumers demand them and retailers will deliver the fuel if consumers demand them. Always be on the lookout for misconceptions and help correct the record when you run into misinformation. Learn more about POET's leadership in the biofuels industry Want to know more? You can subscribe to Vital, a free resource published by POET, to get additional biofuels news and ag industry content delivered to your doorstep or inbox.  The views expressed in this article are the author's alone and not those of Farmer's Business Network, Inc., its affiliates or members.

Nov. 27, 2019


Farmers are true stewards of the land. As a farmer in Radcliff, Iowa, Brett Handsaker implements sustainability practices like using manure management plans on his family’s farm. “We have to take care of the land so the land will take good care of us,” Handsaker says. Handsaker delivers grain to one of POET’s bioprocessing plants in nearby Jewell, Iowa, and feels a commonality with POET because of a shared mission. The Handsakers implement sustainability practices on the family’s farm in Radcliff, Iowa. POET , the world’s top producer of biofuels, is built on similar values of stewarding the earth and its resources. Biofuels producers are building a more sustainable future for generations to come through the creation of biofuels like ethanol and bioproducts that displace products derived from petroleum. Biofuels play a critical role in reducing our dependence on fossil fuels and in addressing one of the most challenging issues of our time—climate change. Lower Greenhouse Gas Emissions Ethanol uses corn in its production to help reduce greenhouse gas (GHG) emissions by up to 110 million metric tons, the equivalent of taking 20 million vehicles off the road each year. Biofuel from starch has 43 percent lower GHG emissions than traditional gasoline. When combined with innovations in feedstocks and technologies, that number reaches as high as 95 percent. Innovative Co-Products Since the company’s origins in 1987, POET has continued to find and implement cost-effective ways to use every ounce from every bushel of corn. The starch is used to produce ethanol, and POET uses the remaining co-products—protein, fat and fiber—from the corn kernel to produce bioproducts such as the following: JIVE By using a greener asphalt rejuvenation product, like POET’s JIVE, asphalt manufacturers can use more recycled asphalt, offering them a more environmentally friendly and lower-cost alternative. Food and Feed Biofuels producers use the leftover solids from the ethanol production process to create products varying from syrups to nutrient-dense animal feed. Environmental Stewardship Practices Developing efficient, sustainable practices is a priority for agriculture and biofuels alike. Technological developments over the years have led to new, innovative practices that allow us to be good stewards of the land. New initiatives have allowed POET to cut its energy use by 30 percent since 2001 and by 50 percent since 1988. POET bioprocessing facilities implement four environmental stewardship practices: Combined Heat and Power By using a steam turbine to generate electricity and recovering waste energy from the turbine to meet other energy demands, POET reduces greenhouse gas emissions and dependence on electrical energy. BPX Technology POET’s patented plant-wide process converts starch to sugar with enzymes instead of heat. The process reduces energy use in each plant by 8 to 15 percent, which translates to less natural gas consumption and greenhouse gas emissions. Carbon Capture POET captures the carbon dioxide that is a byproduct of the ethanol production process and liquifies it for transportation to market instead of releasing it into the atmosphere. Total Water Recovery POET recycles water used in the plant instead of discarding it, allowing POET plants to require on average less than 2.5 gallons of water per gallon of ethanol. Similar to biofuels, many farmers are committed to sustainability. As you plan ahead, consider additional ways to steward the natural systems and resources your farm relies on. To learn more about POET's commitment to sustainability, visit www.poet.com . Connect with POET at Farmer2Farmer V Heading to Omaha for Farmer2Farmer V on December 11-13? Attend the POET-sponsored lunch-and-learn session on Thursday, December 12, to see ways your operation can work alongside POET for a more sustainable future. The views expressed in this article are the author's alone and not those of Farmer's Business Network, Inc., its affiliates or members.

Sep. 10, 2019


If you’re in agriculture, you know a thing or two about biofuels. Throughout the 2000s, the biofuels industry drove the largest boom in value-added agriculture in memory, and today is responsible for more than one-third of the corn purchases in the United States. The industry has created new wealth in rural America, while replacing dirty oil imports with a clean, farm-grown alternative. Within that revolution, POET has emerged as a proud champion for rural farming families and businesses, and has become the largest biofuel producer in the world. Today, the POET network includes more than 2 billion gallons of annual capacity from 28 facilities across the Midwest. Lending a helping, neighborly hand POET operates in communities spanning seven states (Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio and South Dakota). Within those communities, an average POET facility: Creates 40 local jobs Generates $1.8 million in annual payroll Purchases 21 million bushels of corn Provides millions of dollars in secondary benefits by driving revenue for local businesses In many communities, POET is not only one of the largest businesses, but also the most dramatic driver of new jobs and economic opportunity for areas feeling the effects of urban migration. POET plants are also active in improving their communities through partnerships and charity work. POET's “Never Satisfied” effort is a scholarship and grant program that helps passionate people reach their goals to help change the world. POET has awarded 50 Never Satisfied grants in the first two years of the program. Over the past three years, the Never Satisfied scholarship program has awarded 27 scholarships of $5,000 each to ambitious students across the U.S. who are determined to change the world. POET’s “Never Satisfied” effort is a scholarship and grant program that helps passionate people reach their goals to help change the world. POET Biorefining–Shelbyville in Shelbyville, Indiana, has awarded “Never Satisfied” grants to groups to provide new or expanded resources for youth and families in the county. One recipient is the Southwestern Elementary PTO for their Fitness Playground Project to rehabilitate an outdoor playground with new equipment that promotes wellness and creativity.  Creating markets for local farm goods POET purchases approximately 5 percent of the U.S. corn crop each year. Those purchases are primarily local, from more than 30,000 farmers with whom they have developed relationships. According to Dean Watson, President of POET Grain, POET plants work hard to create a positive experience by cutting wait times and focusing on customer service. “Our goal is to create the most value for farmers based on service and price,” he said. By creating new markets and local competition for grain, POET improves grain prices, lowers transportation costs and expands biofuels options for all farmers. Improving health and the environment in rural communities Today, 97 percent of the gasoline sold in the U.S. includes 10 percent biofuel, and new opportunities for E15 mean clean, homegrown fuel use is only going to grow. Biofuel producers like POET and the farmers who supply their grain are driving improvements in our health and environment. The positive effects of biofuels include A reduction in carbon emissions A reduction in tailpipe emissions A decrease or elimination of toxic and even cancer-causing chemicals in gasoline such as benzene, xylene and carbon monoxide Lower ozone levels It’s clear biofuels are a win for farmers, rural communities, our environment and the air we breathe, and there are opportunities to do even more. POET will continue to be a partner and leader in agriculture to expand the role of biofuels and the farmers who support it in improving our world. To learn more, visit poet.com .