Five key actions for livestock and crop producers this autumn

Update your tax planning and bookkeeping

Autumn is the perfect time to sit down with your accountant to discuss tax planning strategies before year-end.

By catching up on your bookkeeping now, you’ll be better positioned to manage tax obligations, detail any potential savings, and avoid surprises when tax season arrives.

Additionally, use this time to update your financial records, so that tax planning is accurate and effective.

Evaluate cashflow and marketing decisions

Should you sell your calves, or hold and feed them? Is it better to sell or store your grain?

These are the questions many producers face during the fall months. To answer them, you need to weigh factors like current commodity prices, interest rates, feed availability, storage capacity, and the need for cashflow to pay bills or loans.

The following information and table provides an example of the cost to hold onto your production. It outlines additional factors to consider when making the feed / store versus sell decision.

Example: Canola

Harvest completed: October 15, 2024

Total Bushels to sell: 10,000

Operating line interest rate: 6.45%

Line item	October 31, 2024	March 31, 2024	Difference
Price ($/bu)	12.33	12.60	0.27
Total value	$123,300	$126,000	$2,700
Days in storage	16	167	151
Interest cost	- $349	- $3,639	- $3,290
Net value	$122,951	$122,361	- $590
Net $/bu	12.30	12.24	- 0.006

 

Depending on marketing decisions off the combine or the timing of livestock sales, farmers may feel a cashflow pinch at this time of year, making the autumn season an ideal time to address any issues. That includes exploring options and resources like the Advance Payment Program (APP) that can help ease financial pressure with interest-free advances.

You may want to consider engaging a third-party advisor to help you complete and submit your APP applications and secure your cash advance. An experienced advisor can help set you and your operation up for success.

Record accurate year-end financials

As the fiscal year draws to a close, it's vital to correctly log accrual items in your bookkeeping. These items include receivables, payables, inventories, and prepaid expenses. Accurately documenting these at year-end is a much more dependable approach than trying to remember them months down the road when you’re preparing the books for your accountant.

Accrual accounting provides a clearer picture of your farm’s annual performance. And accurate figures for receivables, payables, inventory, and prepaid expenses are essential for creating accrual statements. High-quality data and financial statements empower producers to make informed decisions.

Accurate accrual accounting also has a significant impact on government programs like AgriStability, which uses producers' accrual financial statements to calculate reference and current production margins. These margins are used to determine if an AgriStability payment will be triggered for a given production year.

So, as the fiscal year-end nears, take some time to accurately record your farm’s accounts receivables and payables, prepaids, and inventory.

Stay informed on program changes

This fall, ready yourself for the upcoming year by learning about any upcoming changes to tax laws, regulations, and government programming.

Consider AgriInvest, for instance. Starting in 2025, producers with $1 million or more in average allowable net sales will be required to have an Agri-Environmental Risk Assessment (AERA) to qualify for matching government contributions. Keep an eye out for a letter from Agriculture and Agri-Food Canada that’s being sent to producers who will require an AERA to qualify for the matching government contribution to their AgriInvest accounts.

Additional details can be found on the AgriInvest website.

Take action now for a stronger year ahead

Taking the time this fall to assess your financials, review tax strategies, and make informed decisions about your operation’s future will set you up for a successful 2025. By staying proactive and leveraging available resources, you can manage risks and seize opportunities in the months ahead.