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The Farm CPA

RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Don't Forget About 2013-2015

Jul 09, 2012

With the weather market rally of recent weeks, we sometimes forget that these rallies also raise prices for the next couple of crop years.  This rise, in many cases, can provide a chance to lock in profits for those crop years that may not materialize if you wait until the actual crop year arrives.  As the saying goes, the way to defeat high prices is with high prices.

We know that with these high prices, there is many acres around the world that will be planted to corn next year and there will likely be more CRP acres coming on line.  If, as a grower, you can lock in prices over $6 for the 2013 crop year and the high $5 range for 2014 and 2015, it is certainly worth reviewing your budget to see if it makes sense to at least lock in your hard costs.

Generally, a weather market rally such as this, tends to go very high and then retreat in a very quick period of time.  There is a substantial chance that the high in this market will be seen before August 1. 

Are you ready to take advantage of it for not just this year, but the next two or three.

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