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1/14/2009

Time to Formalize Rental Land Agreements

A simple nod, followed by a firm handshake, is how many farmers and landowners arrange short-term land rental agreements.

But it's a luxury many of them no longer can afford, says one expert.

As economic conditions worsen, he says it behooves farmers and landowners alike to formally spell out these rental agreements. Most important from the farmer's perspective, land rental should be managed like any other risk factor associated with farming, says Max Runge, an Alabama Cooperative Extension System economist.

"With spiking input costs and market uncertainties, producers are going to need to manage their risks as best they can, and land is no exception," Runge says.

Currently, the majority of Alabama land is rented on a year-to-year cash basis, with most of these transactions based on oral agreements.

Along with other factors, Runge predicts that tighter lending practices will compel more farmers to negotiate more formalized land transactions in the future.

"Banks already are cracking down and asking agricultural borrowers for more detailed information about their operations," he says.

Also, as farmers deal with spiking operating costs, many may want to look at ways to better manage long-term soil fertility — an option that is not practical with short-term rental.

"In these cases, they may want to secure a long-term lease to improve fertility," Runge says. "The problem now is that producers who aren't sure about the availability of land from year to year aren't going to invest in fertility, even though this could prove highly worthwhile in the long run."

Landowners also may benefit from this fertility enhancement.

The important thing is for farmers and landowners to develop carefully spelled-out agreements, which are signed by both and provide mutual benefits.

One option would be an agreement in which the landowner and producer alike share in both expenses and revenues, Runge says.

"This would be whatever the two decide to work out among themselves," he says, adding that a lot of this would depend on the location and size of the fields.

In addition to being carefully spelled out, the agreement should also include all projected costs.

"Out-of-pocket costs are really easy to determine," Runge says. "What often isn't as easy to determine are machinery and fixed costs.

"These need to be clearly specified in the agreement."

Rental land prices vary greatly depending on one's location, Runge says.

"In cases where a farmer is the only row-crop producer in the state, there may not be a lot of demand and land rent may not be that high," he says.

In other locations throughout the state, competitive pressures for rental land may be especially strong.

"In those cases, when farmers find land, they need to do everything they can to hold on to it for as long as they can," he says.

Posted at 4:19 PM by Langcuster, James | Category: Farm Economics | Permalink | Email this Post | Comments (0)

1/13/2009

An ACRE of Indecision for Farmers in 2009

Farmers face an ACRE of indecision both literally and figuratively in 2009.

Literally speaking, a big decision this coming year will involve what to do — or not do — about ACRE, the Average Crop Revenue Election Program.

A decision should be reached only after farmers have closely assessed the value of the program based on their own farming situation and an inventory of other federal farm assistance programs, advises one expert.

ACRE, a program that replaces countercyclical program payments, may or may not be a good bet for producers, according to Dr. James Novak, an Alabama Cooperative Extension System economist and Auburn University professor of agricultural economics.

"ACRE replaces the countercyclical program," Novak says. "It's a total replacement."

"You get ACRE or you get countercyclical payments, but you don't get both."

Also, there is no turning back once you've signed up for the ACRE program, at least not for the length of this farm bill.

"You can opt into ACRE in any year — 2009 through 2012 — but once you're in, you're locked in for the duration of the farm bill," Novak says, adding that once farmers select ACRE, they must take a 20 percent reduction in direct payments and a 30 percent reduction in loan rates.

If farmers decide to stay with the current farm program (countercyclical program), they do not take a reduction in the direct payment or the loan payment rates, he says.

ACRE also works somewhat differently than traditional countercyclical payments.

Countercyclical payments followed a straightforward formula.

"Traditional countercyclical payments are based on a national price, and if the national price falls below a certain level, this results in a payment," Novak says.

On the other hand, ACRE is based on both national price levels and yields.

An advantage of ACRE is that it's based on state-level and farm-level revenue risk rather than a single national price risk.

"In cases where you're facing a statewide yield wipeout, ACRE might be an advantage, because it likely would trigger a payment, while a countercyclical payment would not.

"In this respect, it's more a form of risk management protection because it factors in both yield and price," Novak says. It also takes into account and encourages crop insurance participation.

However, there's also a farm-level trigger. A farm could have a wipeout and not receive a payment under ACRE because the state had a good revenue situation.

The risk management features associated with ACRE may benefit some producers, he says, but each individual will have to figure this out based on their own situation.

Novak says the key consideration remains the reductions in direct payments and loan rates associated with ACRE — a potentially big factor during crop years in which commodity prices dropped sharply.

With the exception of cotton, commodity prices have generally been good — a trend that may hold up next year, Novak says, though he cautions farmers to be mindful of the weakness of the economy and a potentially sharp drop in farm exports next year.

"ACRE is a complicated program, and producers should look at the entire picture," he says.

"State and farm historic yields and national prices enter into figuring whether it's right for them."

Posted at 1:25 PM by Langcuster, James | Category: Farm Economics | Permalink | Email this Post | Comments (0)

1/5/2009

Cost Savings Begin with Farm Safety

You have identified 20 different ways to cut your operating costs to the bare bones. But have you factored in broken bones and other serious farm-related injuries?

If you haven't, you should, advises one expert.

Farming remains one of the riskiest occupations in the United States, according to Dr. Jesse LaPrade, coordinator of the Alabama Cooperative Extension System's farm safety training program. He cites data from the National Institute of Safety and Health, which reveal that some 20 percent of farms across the United States experience at least one injury each year that results in at least one lost work day and that also requires professional medical attention.

Roughly 2 percent of all farm injuries nationwide result in permanent disabilities that can cost thousands of dollars to treat and can result in years of lost income to the victim, he says.

These sobering statistics are the reason why every farm operator should provide safety training on a regular basis for all their employees, LaPrade says.

Indeed, at a time when farmers are more preoccupied than ever with reducing operating costs, this is one of the biggest factors that should be considered, he says.

"Many farm safety experts maintain that there is virtually no such thing as an accident — practically all injuries can be prevented," LaPrade says.

He says the biggest risks to farmers typically follow during periods when farm workers are up against deadlines, such as harvesting ahead of an approaching storm.

"That's when things can happen, whether it's driving the harvester down the highway from field to field or trying to do three things at once," he says.

To reduce these risks, LaPrade says farmers should work out a detailed schedule for harvesting and other critical chores far in advance of these severe weather conditions and other emergencies.

"That's one thing they can do, even if they don't study any of the do's and don'ts of farm safety," he says.

"Don't ever let yourself get into a situation where you're too pushed to get everything done."

LaPrade cites statistics showing that the largest number of farm-related injuries throughout the state typically occur during harvest.

LaPrade has developed a Farm Safety Training Web site: http://www.aces.edu/farmsafety.

The site features two publications LaPrade considers must reads: Alabama Extension publication ANR-1260, "Safe Tractor Operation;" and ANR-1262, "Hazards of the PTO [Power Takeoff] on Farm Tractors."

The Web site also features a wide array of other materials farmers can use to develop their own farm safety management plan and to train their workers.

"Safety knowledge isn't something we have to figure out on our own - it's readily available on this Web site and other similar sites and free of cost," LaPrade says.

He says farmers also would do well to remember the old adage that "knowledge is money in the bank."

"It certainly applies here in terms of learning ways to work safer and living a healthier life free from farm-related injuries," LaPrade says.

Posted at 1:28 PM by Langcuster, James | Category: Agronomic Cost Savings | Permalink | Email this Post | Comments (0)

12/16/2008

Save Money on Gas and Food

In our society today, prices of gasoline and food are pressuring many people to rethink how they spend their hard earned dollars. One of the challenges is how to survive on the wages you make. You have to make adjustments and lifestyle changes to keep from falling between the cracks.

“Stretching the dollar is vital as our country heads towards recession,” says Theresa Jones, a regional agent in Consumer Science and Personal Financial Management with the Alabama Cooperative Extension System.

Applying the following suggestions to your daily, weekly and monthly routine can help you keep a little money in your pocket, she says.

· Make fewer trips. Plan what you need to do and make a list of the things you need to buy before leaving home or work.

· Do regular maintenance on your car. It is important to keep your car in good running condition because it will cost you more in the future to repair it, if you don’t take care of it now.

· Shop for the best rate on your car insurance. Remember the higher the deductible, the lower the insurance payments.

· Keep tires properly inflated. Improper inflation of the tires burns more gasoline. Follow the recommended air pressure levels found in the car’s manual.

· Use city transportation as often as possible. If you use city transportation instead of your personal vehicle, you will buy less gasoline and cut down on the chances of you having an accident in your personal car. Being involved in a car accident can cause your insurance rate to increase.

· Carpool with family or co-workers. Share the expense of gasoline.

· Walk more and drive less. This will save on gasoline and improve your health.

“Buying groceries is one of the largest monthly expenses for many families,” Jones adds. “The prices continue to go up, while the package contents decrease.”

She offers these suggestions to help with the cost of food:

Use coupons. Using coupons has been one way to save a few dollars for many generations. Many people don’t take the time to clip coupons. For the ones who are not currently using coupons, this is one sure way for them to cut expenses. Remember, most coupons can be found in Sunday’s paper.

Take advantage of the store’s club saving cards and purchase items on sale. This helps save on special products that are sold at a discounted price. Keep in mind that you can also save on store value name brand products when you purchase these other brand name products.

Purchase smaller quantities of perishable items. Make sure you have the proper storage space before purchasing large quantities because perishable items have a short shelf life.

Purchase non-perishable items in bulk if you are not required to use them right away. One advantage is that the shelf life is longer. Items are normally cheaper when you purchase the large size of the product. However, because this is not always true, it is to your advantage to make sure you are saving by buying the larger size.

Check the expiration dates on the food products you purchase. Check several of the same items to make sure you get the one with the longest shelf life. Remember to read all the labels carefully and verify that the item you are purchasing is exactly what you want.

Eat out less. The old brown bag lunch method has never failed. Brown bagging your lunch can save you several dollars on food each day. Plan ahead what days you are going to eat out and what days you are going to take a brown bag lunch. This will help you to not make irrational decisions at the spur of the moment.

Choose foods that can improve your health instead of destroying your body. Most foods that are not good for your health, you have to eat more of them to feel satisfied. Food affects how you feel, both physically and mentally. Remember, if you don’t eat right, you will pay many dollars at the doctor’s office.

Keep in mind that you are responsible for how you handle your money. No one can tell you how to spend it. Make choices that will benefit you and your family as a whole. It’s simply up to you.

Source: Theresa Jones, Regional Extension Agent, Consumer Science and Personal Financial Management, (256) 532-1578.

Posted at 1:39 PM by Lawrence, Margaret | Category: Money Management | Permalink | Email this Post | Comments (0)

Finding Money in Hard Times

There is a new savings program that is available for low income people in Alabama. The program is called Individual Development Accounts (IDA). The IDA programs are matched savings accounts that enable low-income families to save, build assets and enter the financial mainstream.

IDAs reward the monthly savings of working poor families who are building towards purchasing an asset; most commonly buying their first home, paying for post-secondary deduction or starting a small business. IDAs make it possible for low-income families to build the financial assets they need to achieve the American dream.

The Web site, www.cfed.org, contains a four-page fact sheet. The basic program works like this: first, you set up a savings account; second, you attend free financial classes; and third, the organization matches the dollars that you save at a 2:1 ratio or more.

There are income and deposit limits, but even with these, the IDAs are a great way to find money in hard times.

For more information you can contact the following agencies:

North Alabama African American Chamber of Commerce (265)564-7574
Tuscaloosa Housing Authority (205) 758-6619 ext. 108
United Way of Central Alabama (205) 458-2073
Daphne Ala., Community Action Agency (251) 626-2646

There may be other agencies that are not listed on the Web site, but one of the above agencies may be able to direct you to the nearest source for an IDA. These agencies will be able to help you find money in hard times.

Source: Rick Zapata, Regional Extension Agent, Consumer Science and Personal Financial Management, Alabama Cooperative Extension System.

Posted at 9:25 AM by Lawrence, Margaret | Category: Money Management | Permalink | Email this Post | Comments (0)

12/15/2008

Paying Now To Save More in 2009

Pay now, save later - terse and, for many producers, somewhat counterintuitive advice about how to confront what is likely to be one of the most challenging crop years on record in 2009.

Even so, two precision farming experts are convinced that investing in a few new technologies and practices now may help producers get a better handle on what will be next year's biggest preoccupation — containing spiraling operating costs.

The first is boom-control technology, a Global Positioning System-controlled technique that enables farmers to avoid applying chemicals to areas of the field that have been previously sprayed or that don't require treatment.

Preliminary research by Auburn University biosystems engineer Dr. John Fulton has revealed that boom-controlled spraying can result in savings of between 5 and 30 percent depending on the size and shape of the field.

"Especially in odd-shaped fields, you're going to see a bigger saving because there is typically more overlap associated with spraying," says Amy Winstead, an Alabama Cooperative Extension System precision farming agent, who adds that a lot of growers who have already adopted the technology have expressed satisfaction with it.

Winstead says she already has noted substantial savings among farmers who have adopted the technology.

"There's been a huge saving," she says, "and farmers, depending on the application, can pay off the system after only one or two growing seasons."

Boom-control features are easy to acquire as add-ons, according to Shannon Norwood, a precision farming agent who, along with Winstead, is based at the Tennessee Valley Research and Extension Center in Belle Mina.

"There are a number of boom-control products for growers to choose from," Norwood says. "They can order new sprayers equipped with the technology, or they can purchase a third-party product."

With the right product selection, retrofitting of older sprayers is also possible, she says, adding that adoption rates are likely to climb as growers replace older sprayers in the next few years.

Adoption rates throughout Alabama vary, though Winstead and Norwood estimate some 15 percent of farmers statewide already have acquired boom-control technology.

Norwood cites variable-rate fertilizer applications as another option that should be seriously considered for the 2009 crop season.

"With fertilizer costs running higher, variable-rate applications of phosphorous and potassium are now a viable option," she says, adding that soil testing is a critical first step.

"Your soil test really should be the first step in making sure nutrient rates are at their proper levels," Norwood says, "otherwise, you won't know if the variable rate applications are justified."

In fact, in especially lean crop years, soil testing should be viewed as an especially valuable economic tool.

For additional cost savings, Winstead says farmers also should consider the merits of guidance systems.

Lower-end products can be purchased for as little as $2,000 to $3,000, she says.

"They're more affordable than they used to be and can go a long way in reducing overlap in the fields and saving on fuel costs," she says.

Guidance systems enable producers to work longer days and may also help them better manage other resources, especially labor costs.

Posted at 2:12 PM by Langcuster, James | Category: Agronomic Cost Savings | Permalink | Email this Post | Comments (0)

Things to Consider About Mortgage Refinancing

Because of the economic downfall in the housing industry, refinancing of mortgages may be a common practice the coming months. Low interest rates and the receptiveness of borrowers toward the idea of refinancing may help save many buyers and current homeowners having trouble making payments. Although many have vouched for the benefits of refinancing, homeowners should evaluate their personal preferences, financial standing and current mortgage status and compare these with the various options available before planning their next move.

“There are many facts surrounding refinancing, and homeowners need to know important aspects so they can make informed decisions,” says Bernice Wilson, a resource management specialist with the Alabama Cooperative Extension System. “Refinancing your mortgage is for the long term and needs to be a choice that is thoroughly considered.”

Here are five things to consider before refinancing your mortgage:

Penalty Costs

Refinancing means paying off your current mortgage and obtaining another mortgage at a different interest rate, usually at a fixed rate and term. In some cases, penalty costs may be imposed on your current loan. Penalties incurred may be higher than the cost savings from refinancing the mortgage, making the idea of refinancing no longer attractive.

Monthly Payments

If you refinance to get lower monthly payments, be sure to get a fixed interest rate mortgage. Adjustable rate mortgages seem appealing only at first, when your payments are low. However, when an adjustable rate goes up, you may not be able to make the higher payment. Now is a good time to get a fixed rate mortage because interest rates are low.

Transaction Costs

As with any mortgage transaction, refinancing involves transaction costs such as attorney fees, points, appraisal fees, inspection fees and prepayment penalties. All of these raise the cost of refinancing and need to be balanced with the cost savings from switching loans. As a rule of thumb, if you plan to stay in your current property for the long term, transaction costs will be offset with savings in repayment amounts. In this case, refinancing should be a good option.

Regaining Tax Deductions

Refinancing may help you pay less tax by providing deductions associated with the new loan. With a new mortgage, you may have fees that are deductible. In addition, a larger proportion of your house payment will go toward interest at the beginning.

Alternatives to Refinancing

Refinancing may not always be the best option for you. Other financial options, such as a home equity line, allow you to keep your current mortgage and have the flexibility to withdraw cash based on the equity you have in your home. Another option is a second mortgage, which will be based on a shorter term but with higher interest rates.

Refinancing may or may not be right for you. Get sound advice from a financial counselor or other trustworthy and knowledgeable financial professional before you refinance.

Source: Bernice B. Wilson, Resource Management Specialist, Alabama Cooperative Extension System, (256) 372-4969.

Posted at 10:27 AM by Lawrence, Margaret | Category: Money Management | Permalink | Email this Post | Comments (0)

12/12/2008

Sleep for the Sake of Your Health

Imagine that you've had your hours reduced at work and you've decided to take a second job to makes ends meet, especially during the holidays.

What's wrong with this picture? Nothing providing that you are getting enough sleep. But in these challenging economic times, countless numbers of Americans who are working longer and harder are also skimping on sleep. And in the long run, sleep deprivation alone may render all of this extra work and money nil.

How? For starters, the loss in reaction time puts you at higher physical risk, more prone to accidents — a catastrophe in the making, especially if you are medically uninsured. Also, as a mountain of research findings have shown, you're also increasing your chances of developing several chronic diseases — yet another potential calamity, particularly among those who lack health insurance.

"Sleep deprivation has been shown to affect your health in ways we didn't realize only a few years ago," says Dr. Robert Keith, an Alabama Cooperative Extension System nutrition and health specialist and Auburn University professor of nutrition and food science.

"And one of the really disturbing things is that the worst sleep-deprived people aren't aware of how impaired they are in terms of alertness and attention spans."

Experts urge adults to get between six and 10 hours of sleep each night, though many recommend around eight hours. Children require even more — as much as nine and even 10 hours of sleep in some cases.

Aside from increased risks of physical injury, sleep deprivation also has been shown to impose severe stress on our long-term physical well-being.

Sleep deprivation causes a number of hormonal changes within the body — changes that contribute to chronic conditions such as metabolic syndrome and, ultimately, to a host of other serious medical conditions.

"People who are chronically sleep-deprived tend to be heavier," Keith says, "and the secretion of certain hormones, in turn, make you want to eat more, which only complicates the problem."

Hormonal changes that accompany deprivation can also affect insulin resistance, which increases the risk of developing full-blown diabetes. In fact, Keith suspects sleep deprivation may be an understated factor behind the nationwide surge in type 2 diabetes.

"If you're uninsured, this may mean that you're more likely to encounter the sorts of health problems you're desperately trying to avoid," he says.

Sleep deprivation also has been shown to play havoc on the immune system.

"Besides these chronic diseases, you more prone to colds, flus and other things that pop up acutely and unexpectedly," Keith says.

Researchers over the last few decades have gained lots of insight into what constitutes effective sleep patterns.

Rule 1: Choose Regular Sleep Over Catnapping

Winston Churchill is remembered as history's most famous proponent of catnaps to make up for sleep deficits. But research conducted over decades has consistently shown that regular sleep trumps catnapping.

"Sleep typically involves patterns where you start out with lighter sleep and pass into a much deeper sleep — a cycle that may be repeated several times a night," Keith says.

Adequate sleep requires passing through all of these phases — something you don't get with catnaps.

Even sleeping 10 hours to make up for the six hours you missed the previous night is not as effective as a regular sleep pattern, Keith says.

Your best bet: Go to bed at a regular hour each night and strive to rise at the same time in the morning.

Rule 2: Avoid Late-Night Caffeine and Alcohol

If you're striving to get regular amounts of sleep, stay away from caffeinated drinks, such as tea and coffee during the hours before bedtime, Keith says.

The same rule applies to late-night alcohol. The old bromides about nightcaps are entirely that — bromides, tired notions with little basis in fact. Alcohol nightcaps ultimately are self-defeating — yes, they make you drowsy, but they also disrupt sleep patterns.

Rule 3: Avoid Exercising in the Evening

"Exercise is good for you, but it does gear up your system and can undermine your sleep if it's postponed until late in the day," Keith says.

Despite the best efforts of health experts, Keith says sleep deprivation, much like obesity and sedentary lifestyles, will remain a permanently ingrained problem.

He says the conveniences of modern technology, coupled with the stress of the recent economic downturn, will keep many of us on our feet long after the recommended bedtime, he says.

Posted at 3:12 PM by Langcuster, James | Category: Fitness for the Uninsured | Permalink | Email this Post | Comments (0)

Five Ways to Stretch A Dollar at the Grocery Store

Difficult economical times have all Americans looking at ways on how to stretch a dollar. One way to stretch your dollar is to review the amount spent on food. Did you know that you could save 15 percent or more at the grocery store if you follow some simple rules? Saving money at the grocery store means that you can feed your family more nutritious meals and have more dollars for other household necessities.

There are many ways to save money on food. It just takes a little planning and know-how to select the best buy and plan enjoyable meals for your family.

So how do you save that 15 percent at the grocery store? Follow five simple rules of effective shopping: 1) use grocery store ads and coupons when planning to shop, 2) have a planned menu, 3) write a grocery list, 4) use unit pricing to select the best buys and 5) use ingredient substitutions.

Using shopping ads and coupons can usually help save you about $4 to $7 per week, if you shop every week. Making a menu can be done easily and can save money and time. People who write out a menu usually find themselves in the grocery store about once a week. Those who do not write out a menu usually find themselves making extra trips to the grocery store.

How can you save even more? Plan inexpensive meals that do not require expensive ingredients. Look for simple recipes, quick to cook meals and foods requiring less preparation time.

Are coupons a good way to go? It really depends on the item and the value of the coupon. If you normally buy a particular brand item, then the coupon could be a great savings. However, if you don’t normally buy the brand, you might not save as much. Don’t buy an item because you have a coupon for it unless it is something you need. Compare prices and brands before making a decision. Often times, the store brand is less expensive than the item even with the coupon.

What about unit pricing? Unit pricing helps you decide which is the best price. Many people believe that the larger the item the less expensive it is. This may not always be the case. Unit pricing allows you the opportunity to compare the prices. Most grocery stores list the unit price right on the shelf below the food item. If you don’t see the unit price, calculate the old fashion way: price divided by the weight.

Buying the store brand items rather than name brand items will also save you money. A Lot of times you will find that there is not a big difference in the product except the price.

Finally, think about other food items, especially spices and seasonings that can be substituted. Spices and seasonings can add expense to the grocery bill. If there is a seasoning you will use only a few times, try to substitute the item for something you use on a regular basis. For example, one slice of soft bread can be substituted for ¾ cup of soft breadcrumbs. Not only can you substitute dry staple goods but also meats and dairy products can also be substituted. One thing to remember is your final product made with the substituted ingredient may differ slightly from the original, but still be acceptable in flavor, texture and appearance.

You can save money if you are creative and selective in your food purchasing. To learn more ways on how to save, and about ingredient substitutions, contact your County Extension office for a copy of publication HE-757, “101+ Ways to Save Food Dollars” and publication HE-585, “Ingredient Substitutions and Equivalents Chart.”

Sharon Haynes, Regional Extension Agent, Human Nutrition, Diet and Health, ACES,

(256) 362-6187.

Posted at 2:30 PM by Lawrence, Margaret | Permalink | Email this Post | Comments (0)

12/10/2008

Stretching Your Food Dollars

Gas prices may be plunging, but food prices are only beginning to decline slowly. Even then, a recent report from the World Bank predicts that over the next five years, real food prices worldwide are expected to remain about 25 percent higher than they were in the 1990s.

Dr. Barbara Struempler, a nutritionist with the Alabama Cooperative Extension System, has a number of ideas on making your food dollars go further. As a matter of fact, she has more than 101. Check out her publication, “101+ Ways To Save Food Dollars” at the Extension Web site.

Here are just a few of her suggestions.

· Plan meals and make a grocery list.

· Plan some meatless meals.

· Shop once a week.

· Buy store brands when they suit your family’s taste.

· Compare unit prices.

· Make large amounts of recipes that freeze well such as spaghetti sauce and soups. Label and freeze them for later use.

· Make foods from scratch (homemade). It can be cheaper (and healthier) than store-bought, convenience items.

Posted at 1:19 PM by Lawrence, Margaret | Category: Nutrition; Money Management | Permalink | Email this Post | Comments (0)

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