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6 Planning from the Ground Up
Soil testing removes guesswork and guides sound farm decisions. Illinois Field & Bean explores how implementing a system can ensure lasting value.
12 Addressing Farm Stress: SIU's Support for Illinois Farmers
Managed by SIU School of Medicine's Center for Rural Health and Social Service Development, the Farm Family Resource Initiative offers vital mental health resources. 14 Does Your
Farm Business Plan Need a Refresh?
Learn the top seven ways financial advisors suggest you update your farm business plan.
Entrepreneurial Needs of Farmers Drive Ag Finance Evolution
As the agricultural finance sector continues to evolve with the needs and demands of farmers, Illinois growers are discovering many sources and tools at their disposal.
20 Handling High Interest Rates
Today's smart farming starts not just with precision technology but also with a new approach to financial management.
22 Taxes Are Changing
Join ISA Public Policy Manager Collin Cisco for an exploration of both federal and state estate taxes and learn how Illinois farmers should prepare.
Town Halls for Illinois Farmers
Participating in these events isn't just about hearing updates on policy, it’s about making your voice heard. Save the dates!
CHAIRMAN
Ron Kindred, Atlanta District 9
VICE CHAIRMAN
Brad Daugherty, West Union District 14
SECRETARY
Dwayne Anderson, Lynn Center District 3
TREASURER
Tim Scates, Carmi At-Large
ASSISTANT SECRETARY-TREASURER
David Wessel, Chandlerville At-Large
GOVERNMENT RELATIONS COMMITTEE
CHAIR
Ryan Frieders, Waterman District 1
MARKET DEVELOPMENT COMMITTEE
CHAIR
Brady Holst, Plymouth At-Large
SOYBEAN PRODUCTION COMMITTEE
CHAIR
Bryan Severs, Potomac District 7
DIRECTORS
Steve Pitstick, Maple Park | District 2
Buck Hill, Grand Ridge | District 4
Mark Read, Putnam | District 5
Jim Martin, Pontiac | District 6
STAFF CREDITS
Publisher | Michael Whitmer
Managing Editor | Betsy Osman
Assistant Editor | Olivia Key
Staff Contributor | Brynna Sentel
OTHER ISA STAFF
Chief Executive Officer | John Lumpe
David Niekamp, Coatsburg | District 8
Elliott Uphoff, Shelbyville | District 10
Matt Murray, Paxton | District 11
Brock Willard, Pittsfield | District 12
Heath Houck, Nokomis | District 13
Jeff Parker, Belleville | District 15
Brian Atteberry, Carmi | District 16
Rick Rubenacker, McLeansboro | District 18
AT-LARGE DIRECTORS
Betsey Emerick, Vandalia
Jeff O'Connor, Kankakee
Scott Gaffner, Greenville
UNITED SOYBEAN BOARD (USB)
Dwayne Anderson, Lynn Center
Gary Berg, St. Elmo
Lynn Rohrscheib, Fairmount
David Wessel, Chandlerville
AMERICAN SOYBEAN ASSOCIATION (ASA)
Stan Born, Mahomet
Daryl Cates, Columbia Ryan Frieders, Waterman
Jim Martin, Pontiac
Ron Kindred, Atlanta
Rob Shaffer, El Paso
Roberta Simpson-Dolbeare, Nebo
Bryan Severs, Potomac
Director of Illinois Soybean Foundation | Suellen Burns
Executive Employee Relations | Nicole Butler
Director of Government Relations & Strategy | Andrew Larson
Director of Market Development | Todd Main
Director of Finance | Kati Owen
Director of Agronomy | Abigail Peterson
Director of Operations | Dustin Scott
Illinois Soybean Growers (ISG) is owner of Illinois Field & Bean, a publication for Illinois soybean farmers, designed and written to provide timely and useful industry information. Illinois Field & Bean is published by the Illinois Soybean Association, 1108 Trinity Lane, Bloomington, IL, 61704. For address corrections, contact Illinois Field & Bean at 1108 Trinity Lane, Bloomington, IL, 61704. Phone 309-663-7692. Web address: www.ilsoy.org. Email: ilsoy@ilsoy.org.
Comments and statewide news articles should be sent to the above address. Advertising space reservations must be made by the first of the month preceding publication. In consideration of the acceptance of advertisement, the agency and the advertiser must, in respect of the contents of the advertisement, indemnify and save the publisher harmless against any expense arising from claims or actions against the publisher because of the publication of the content of the advertisement.
FOR ADVERTISING INFORMATION
Michael Whitmer
Publisher
Email: michael.whitmer@ilsoy.org
It’s Personal, and It's Business
When I first ventured into the world of property flipping, I was surprised by how similar it was to running our family farm. At first glance, farming and property flipping might seem worlds apart, but they share foundational principles that are crucial for success. Budgeting, community involvement and strong relationships should be top of mind as you navigate any business operation.
Sticking to a budget is crucial in both farming and property flipping. As someone with a finance background, I would argue it’s the most critical component of a business. On the farm, budgeting starts with a detailed projection of expenses and potential profits. Each year, we coordinate with vendors, grain marketers and crop insurance providers to set these projections. Whether we’re growing corn, soybeans or wheat, understanding the cost per unit and working within those constraints is vital. Every decision, from purchasing seeds to selling crops, is influenced by our budget, which helps us stay profitable and sustainable.
This approach extends to my property flipping business. Before purchasing a house, I draft a comprehensive budget, detailing purchase price, renovation costs and potential sale price. I even include miscellaneous expenses such as utilities and donations - it’s important to account for every single expense.
A thriving business, much like a successful farm, is deeply rooted in the community. On my family’s farm in Fayette County, we’re committed to being good stewards of the land and supporting our local community. This extends to sustainable farming practices that ensure the soil remains productive for future generations. If a practice benefits the environment and the community, it’s worth the extra effort and cost.
In my property-flipping business, I see each renovation as an opportunity to improve my community. By transforming neglected houses into functional homes, I help improve the neighborhood's overall appeal and economic value. It’s about more than just making a profit; it’s about making a positive impact on the community.
On our farm, maintaining good connections with vendors, bankers and marketing advisers is crucial. My dad always taught my brother and I that everyone in a transaction needs to be profitable for it to be sustainable. This philosophy has shaped how we operate, ensuring that we build and maintain relationships based on mutual benefit and trust. Whether it’s negotiating prices with suppliers or securing financing for the next season, our success relies heavily on these partnerships.
When I renovate properties, relationships with contractors, real estate agents and suppliers are just as important. Building a network of reliable, trustworthy partners helps navigate the challenges of the business and ensures that each project runs smoothly. I strive to work with people I trust, creating partnerships that are beneficial for everyone involved.
Ultimately, I've found that success in any business comes from the same core values. By focusing on a precise budget, supporting my community and building strong relationships, I’ve been able to make a positive impact, proving that good business practices are universal, no matter the industry. Whether I’m cultivating crops or transforming homes, these principles guide my efforts and lead to meaningful and fulfilling outcomes. It’s a reminder that at the heart of any successful business, there are shared values that transcend specific industries and bring about sustainable growth and positive change.
BETSEY EMERICK | AT-LARGE DIRECTOR | ILLINOIS SOYBEAN ASSOCIATION
Illinois Soy Farmers: The Ultimate Entrepreneurs
Farmers are true entrepreneurs. They take risks, are driven by consistent improvement and possess a diverse set of skills and talents needed for business success. It’s a multifaceted balance that goes with the territory. This issue of Illinois Field and Bean, “The Business of Illinois Farming,” shows that soybean farming requires a broad range of business know-how. From financial and business strategy to agronomy and machinery expertise, Illinois Soybean Association (ISA) is here to help you excel as entrepreneurs, both on the supply and demand sides.
In today’s tech-driven, sustainability-conscious world, farmers are more than crop growers and caretakers. Although often unheralded for these daily activities, soybean farmers navigate complex strategies and actions. And they also have a big ally in their corner: ISA.
As the largest soybean-focused farm organization in Illinois, ISA offers Illinois growers a wide range of programs to help them and their counterparts make informed business decisions unique to their farm and region. ISA serves as a business consultant, an agronomic adviser, a marketing communications firm and a crucial tool for Illinois soybean farmers, who lean heavily into farming with an entrepreneurial spirit.
ILSoyAdvisor is a key resource available to Illinois soybean growers for expert agronomic and management advice about soybean production. The ILSoyAdvisor.com website includes easy-to-navigate sections dedicated to conservation, in-season agronomy, ag technology, integrated pest management and even farm business management. ILSoyAdvisor also offers timely webinars on specific topics and a full slate of in-person events for soybean farmers across the state.
For Fiscal Year ’25 work, we are planning projects to improve efficiency, profitability and sustainability. We are preparing to offer you more access to data-informed research, agronomic insights, cutting-edge technology and insights from experts who will weigh in on the innovations that are worth it and those that aren’t.
Statistics from numerous sources, including the University of Illinois, show that being proactive can pay dividends. For example, utilizing precision ag technology and increasing organic matter can boost yields, while investing in risk management strategies helps reduce losses.
Farmers generate a vast amount of information from their soybean fields that can be crunched and analyzed to determine soil health, best practices for pest management and planting date recommendations for future crop years. We like to showcase farmers and their insights. We facilitate farmer conversations in classrooms, at conferences, in machine sheds and, literally, in soybean fields.
JOHN LUMPE | CEO | ILLINOIS SOYBEAN ASSOCIATION
The business of Illinois farming extends well beyond the field, to the marketplace. ISA’s Market Development team works tirelessly to retain and build new demand for Illinois soy. Members of the team also help ensure a robust and reliable transportation system to support all marketing opportunities.
Meanwhile, the ISA Government Relations team shows up to represent you every day and ensure Illinois soybean farmers have the freedom to make business decisions without undue levels of government mandates and overreaching regulations. They advocate for policies that protect farmers' rights and promote their economic interests. A timely example is ISA’s work on the 2024 Farm Bill.
The ISA Marketing Communications team works domestically and globally to grow appreciation and awareness for Illinois soybeans across the entire value chain. Through education and promotion efforts, the stories and benefits of Illinois soybeans reach a broader audience, enhancing market opportunities and driving demand.
Our farmers are the key to success for each of our staff teams. Creating soybean demand and increasing quality and supply require a diverse collection of skills and knowledge. Teamwork and trust between ISA and farmers ensures you have all the knowledge and support you need to succeed as an entrepreneur, each and every day.
Planning from the Ground Up
How soil testing removes guesswork and guides sound farm decisions
By Nate Birt
Two hats qualify Corey Lacey, Ph.D., to vouch for the many benefits of regular soil testing on Illinois soybean farms.
As Environmental Policy Manager at Illinois Soybean Association, Lacey knows that when farmers are allowed to apply nutrients at agronomic rates, they can increase productivity and optimize environmental stewardship. And as President of Agricultural Laboratory Testing Association (ALTA), Lacey knows that farmers’ decisions improve with help from soil data provided by high-functioning soil-testing laboratories.
“Soil testing represents one of the most cost-effective investments on a farm, typically
amounting to only $1 to $2 per acre in a standard testing cycle,” Lacey explains. “Despite its low cost, it yields one of the highest returns on investment. This is because it enables farmers to use precision agriculture technology (grid sampling, variable rate technology (VRT) maps, etc.) to make informed fertilizer and lime applications, which can amount to hundreds of dollars per acre in input costs.”
John Jones, the new soil fertility professor at University of Illinois who began his role in August, agrees that a strategic soil-testing framework adds real value for farmers. He grew up on a farm in south-central Wisconsin located on Saybrook and Plano soils—named after the northern and central Illinois communities where they were discovered.
“Each season provides the opportunity to collect information and make decisions that complete the picture of soil fertility management,” Jones explains.
Create Your Soil-Testing System
The best way to experience lasting value from soil tests is to implement a system that calls for regularly digging deep— literally.
“Farmers can monitor changes in soil health and nutrient levels over time, addressing nutrient deficiencies or imbalances before they cause problems,” Lacey says. Basic soil fertility packages include essential data on pH, to guide lime recommendations and macronutrients, as well as on phosphorus (P), potassium (K), calcium (Ca) and magnesium
(Mg) to inform fertilizer applications.
The question of when to schedule your soil sampling is important. The closer you can sample to the growing season, the better insights you’ll have to fine-tune the nutrients available to your crop. That often means, contrary to convention, that spring sampling provides superior insights compared to fall sampling.
“Spring sampling facilitates a smoother decision-making process,” Lacey points out. “Unlike in the fall, when farmers must rapidly make application decisions relatively soon after receiving sample results, spring sampling allows farmers to collect samples pre- or post-planting. They can
(See Planning from the Ground Up, page 8)
Planning from the Ground Up
(continued from page 7)
then review the data over the summer and plan for fertilizer and lime applications in the fall.”
There’s also a financial incentive, in some cases.
“Since the majority of soil testing is conducted in the fall, some labs offer discounted pricing to incentivize a shift to spring testing,” Lacey says.
One caveat: Lacey notes potassium levels, in particular, can vary from fall to spring. Thus, if you choose to shift away from fall sampling and into spring sampling, be aware your lab
data might reflect this reality.
Get Sound Advice On Soil Tests
Several types of experts can help you get the most from all soil samples you take.
First, Illinois farmers can work directly with soil-testing labs, which provide comprehensive services including soil sampling, data analysis and fertilizer recommendations, Lacey says. Some of those facilities are headquartered here, while others have multiple locations including Illinois.
Second, ag retailers often provide complementary services to labs. For example, Lacey notes, many ag retailers organize soil testing and provide data-inter-
pretation support. Many even subsidize or fully cover the costs of soil testing for fertilizer customers. You can also access additional information on soil testing, nutrient management and sustainability via ag-retail industry organizations such as the Illinois Fertilizer and Chemical Association and the Illinois Nutrient Research and Education Council, funded by the fertilizer checkoff.
Third, your farm might benefit from working with the Illinois network of Certified Crop Advisors (CCAs), which offers customers local and independent advice on soil sampling and testing. “Additionally, they typically have strong relationships with local soil testing labs, which
Illinois soybean farmers can implement a successful soil-testing strategy by taking specific actions at specific times during the year. John Jones, the new soil fertility professor at University of Illinois, shares some of the key checklist items that can be most helpful.
• Winter: Assemble a list of audibles that may need to be called, Jones advises. If soil testing has been conducted in a field before soybean planting, and results showed P or K values in the Very Low or Low categories, preparing for fertilizing at removal rates at a minimum could alleviate yield reductions. “It would be important to consider any P or K applied to soybeans going forward when planning soil sampling or fertilization in the following fall,” he says.
• Spring: Consider holistic soil fertility decisions beyond those tied to planting date and seeding rate. “The basics should still apply,” Jones says. “If soil-test levels for P or K are low prior to soybeans, yield reductions may occur.”
helps farmers gain access to the expert knowledge and insights from lab staff,” Lacey says.
Finally, Illinois farmers have the opportunity to learn from Jones, the new University of Illinois soil fertility professor. “Dr. Jones is an emerging expert in soil fertility highly respected for his research at Iowa State University and University of Wisconsin-Madison,” Lacey explains.
Jones has extensively studied phosphorus and potassium soiltest calibration for soybeans and corn, among other areas of specialty. He seeks to help Illinois farmers further synchronize soil supply of nutrients with time-sensitive crop demands while avoiding losses from the
• Summer: Observe soybean responses to management decisions or environmental conditions, and adjust accordingly. “Hard data can be collected if nutrient limitations are suspected by tissue sampling paired with in-season soil sampling,” Jones says. “Locations in the field where plants or soil are sampled in-season can then suggest if post-harvest, routine soil sampling plans should be adjusted to account for zonal differences in a field.”
• Fall: After harvest, you or your trusted adviser should collect soil samples across uniform depths while ensuring an adequate number of cores per composite sample. Also note soil conditions. “In recent years, different soil moisture conditions in the fall have been a good reminder that soil moisture may affect soil-test potassium values and soil pH, though this varies by soil and laboratory method,” Jones says. “If sampling conditions are extremely dry or fields are too saturated, delaying sampling to spring is a viable option.”
Illinois farmers have access to several experts who can provide actionable advice based on soil sample data, including soil-testing labs, CCAs, ag retailers and new University of Illinois soil fertility expert Dr. John Jones.
field. “I look forward to supporting and developing tools that farmers and agronomists can integrate into their process of making nutrient management decisions,” Jones says.
Ask These Questions to Improve Your Soil Decisions
It’s a good idea to understand the basics of soil sampling and soil testing to ensure you’re asking the right questions to guide farm decisions.
One of the first questions to consider: Should I grid sample or zone sample?
Grid sampling is the simplest soil-testing approach to estimate fertility, Lacey says. In Illinois, this type of sampling is typically conducted on 1.1-, 2.5- and 5-acre grids. Those numbers indicate how many samples are collected per acre.
Zone sampling, alternatively, can help you simply differentiate fields based on soil type— or go very deep into your soil
using a suite of precision ag tools including satellite data, sensors, software and yield data. “Farmers considering zone sampling should work with their trusted adviser to ensure they understand and agree with the zone sampling strategy being used,” Lacey recommends.
Next, ask: What soil-testing methods will my lab use? For example, while most labs serving Illinois farmers follow the University of Illinois Agronomy Handbook, different labs report data points such as phosphorus in different ways. You can work with a trusted adviser or directly with the lab to understand the data so fertilizer recommendations are accurate, Lacey says.
Finally, confirm: Does my lab have quality-assurance and quality-control processes in place? A simple way to do this is to verify that your lab is enrolled in the voluntary Soil Analysis Certification program available from
ALTA. As part of this program, labs get a report card three times per year evaluating the quality of their soil tests, Lacey says. Additionally, confirm your lab participates in one of the two available proficiency testing programs—either the North American Proficiency Testing Program or the Agriculture Laboratory Proficiency Program.
Beyond trusted labs, exercise caution, Lacey advises. A variety of startup companies seek to improve soil-testing methods, and while some efforts appear promising, farmers should be aware of the risks.
“Most of these companies base their technologies on data from private soil testing labs, then apply corrections or correlations in the background to generate recommendations for farmers,” Lacey says. “I always encourage farmers looking at these options to consider if going to the original data source in the first place is a better approach.”
He anticipates continued innovation in VRT maps built from soil test data. And Lacey is watching Illinois-based Precision Planting and its Radical Agronomics as an interesting though unproven model for generating better soil insights.
Use the Data
Making use of all that soil-testing data might feel overwhelming, Lacey acknowledges. But Illinois farmers should seek out the support they need to use the data for decision-making.
“Many farmers get massive amounts of agronomic data that can help them make input decisions,” he says. “But they are not certain how to use the data, so they decide to ignore the data. Farmers can avoid this by making a plan for how to use the data before they collect it. Soil-test labs, trusted advisers and ag retailers can help farmers with this process.”
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Addressing Farm Stress: SIU's Support for Illinois Farmers
The Farm Family Resource Initiative offers vital mental health resources
By Karen Leavitt Stallman
Over the past few years, mental health has become a more prominent topic in our daily lives. Constant change and stress have left many feeling depressed, hopeless or anxious. As stress impacts mental health, physical health issues
can arise. Farmers and those involved in agriculture are not immune to these challenges. I grew up on a farm in Randolph County and still farm today with my husband. So I've experienced firsthand both the joys and stressors of farm life. Whether you're driving tractors or handling livestock, farming is rewarding but also demanding.
In my youth, the farm was fun and a great learning experience, but it was also a source of many stressors. Many of the stressors I saw that affected my father are the same ones I see my husband and farmer neighbors dealing with today.
That chronic drip, drip, drip of variables we cannot control can often lead to stress and anxiety.
Volatile commodity prices, unpredictable weather, rising input costs and insurance expenses are just a few of the factors that can trigger mental health issues for farmers.
The most important asset on the farm is the farmer. The farm thrives only if the farmer is healthy. We must do all we can to keep our farmers healthy,
The Farm Family Resource Initiative, managed by the SIU School of Medicine's Center for Rural Health and Social Service Development, provides a network of support and resources for farmers and their families. This includes a free, 24/7 confidential helpline (1-833-FARM-SOS) connecting callers to health professionals who specialize in ag-related stress.
both physically and mentally. Although we excel at caring for crops, livestock and equipment, we often neglect our own health.
Recognizing the need for mental health support, the late Senator Scott Bennett helped establish the Farm Family Resource Initiative (FFRI) in 2019. Managed by SIU School of Medicine's Center for Rural Health and Social Service Development, the initiative aims to address and improve farmers' physical and mental health. With guidance from an advisory council of ag industry professionals, FFRI initially launched as a pilot project in six central Illinois counties and has since expanded to all 102 counties, thanks to increased state funding and support from the Illinois Department of Agriculture.
FFRI is working to make a difference in the lives of our farm families. These services are provided at no cost through generous financial support provided by the Illinois Department of Human Services and its Division of Mental Health. Among the services:
Helpline
FFRI provides a network of support and resources for farmers and their families, including a free, 24/7 confidential helpline (1-833-FARM-SOS) connecting callers to health professionals who specialize in ag-related stress. The medical professionals live in Illinois and can relate to the local economy, weather and other daily stressors specific to the region.
Telehealth Counseling Sessions
In addition to text, email and website services, telehealth counseling sessions are available for those in need of additional support. Up to six individual, couple or group sessions are available. All FFRI services are offered at no cost to the farmer or farm family member with the support of grant funding.
The AgriSafe Nurse Scholar Program offers on-demand webinars for rural nurses. Scholarships are funded by Farm Credit Illinois. This program is designed to enhance knowledge of diseases related to agricultural work exposures. These lessons will increase knowledge in prevention, identification and assessment of diseases associated with ag work. Details are at learning.agrisafe. org/nurse-scholar-program.
Wellness in the Fields Podcast
FFRI produces a Wellness in the Fields podcast as a guiding light for the mental health and well-being of farmers and farm families. Each episode delves into a critical topic of mental health, offering practical insights, stories of strength and expert guidance.
“I like to speak on issues I'm either going through personally or things I'm hearing about out in the fields, from people at confer-
ences, from friends and family and people I know,” says host Adrienne DeSutter. A new episode is published the second Tuesday of each month. Find the podcast on Spotify to get updated every time a new episode comes out.
Grief Support Group
FFRI offers an open support group for farmers and farm family members 18 years and older who have lost a loved one. The group meets virtually every month. Support groups provide an opportunity to meet others who understand and are willing to share.
Harvest a Healthier You Webinars
Harvest a Healthier You: Wellness Strategies for Farm Families is a webinar series that addresses topics specific to farm life. Visit siumed.org/farm/ events-and-webinars to view these recorded webinars. Topics have included coping with loss, divorce and depression.
We need to support one another other within the farming community. Agricultural stressors are numerous, so regularly check in on your neighbors. Spread the word about FFRI, and encourage others to seek support when they’re having a rough time—it could save a life.
For more information, visit siumed.org/farm.
Karen Leavitt Stallman, Farm Family Resource Initiative
Farmers excel at caring for all aspects of farming, but they often neglect their own health, both physical and mental.
Does Your Farm Business Plan Need a Refresh?
Here are the top 7 ways financial advisers suggest you update your farm business plan
By Joli A. Hohenstein
Are you still operating status-quo even as the industry changes around you? Are you taking advantage of every opportunity to feed your business as you feed the world?
In today's rapidly evolving agricultural landscape, staying ahead of the cycle is essential for the success and sustainability of any farm business. An updated and thoughtful business plan can help you navigate the complexities of
the industry, manage risks effectively and seize new opportunities.
“Having operating procedures and looking at your farm as a business is critical, especially when margins are negative to thin,” says Thomas Eatherly, principal with Pinion Global. “Evaluate the market around you, instead of assuming you’ll do the same thing with what you have.”
Here are the top seven ways to refresh your farm business plan, ensuring it remains relevant and robust—and so does your farm.
1. Reconcile Your Accounts and Inventory
One of the most fundamental aspects of a solid business plan is financial accuracy. Many farmers create budgets but fail to reconcile their accounts at year-end.
“Everyone does a budget. A very small percentage ties it out at the end of the year,” Eatherly says.
It's crucial to tie out your budget with actual figures to understand your financial performance fully. This should involve:
• Reconciling accounts: Ensure all of your business accounts,
operating loans and inventories are accurate and up to date.
• Meeting with advisers: Set up regular meetings with your board of advisers to review financials and make necessary adjustments.
• Evaluating risk management plan: Book risk management strategies for both the current and upcoming years to protect against uncertainties.
2. Implement Strategic Planning and Automation
Strategic planning involves looking beyond day-to-day
These seven steps will help you better navigate the cyclical nature of the agricultural industry and also find and capitalize on new opportunities for growth and success.
operations to ensure longterm success. Eatherly says one way to achieve this is through automation, which can significantly streamline your back-office processes. “Have a good system in place to save time and labor,” he says. “You’ll be surprised how much of a difference it makes, especially when someone wants a day off or is out of the office unexpectedly.”
Consider the following:
• Automate bill payments and payroll: This saves time and reduces the risk of errors, allowing you to focus on more strategic tasks.
• Systemize operations: Implement systems that save time and labor, ensuring efficiency across your operations.
3. Evaluate Crop Performance and Cash Flow
Understanding the performance of your crops and managing cash flow effectively are vital to maintaining profitability. Take the time to:
• Analyze crop results: Identify which farms and fields performed well and which didn't. This data can inform both future planting and business decisions.
• Project cash flow: Know what your potential cash flow looks like in different scenarios, including sub-par environments, to prepare for any financial shortfalls.
As Eatherly says, “Not knowing whether there’s going to be a profit or loss could lead to poor decision making.”
4. Optimize Land and Resource Management
Effective land and resource management can enhance productivity and profitability. That means regular conversations with landlords and other stakeholders, to determine cost breakout and management. Engage in proactive discussions and initiatives such as:
• Asset improvement: Look at the assets you have and consider how you can make money outside the farm with-
out disturbing the farm. That could mean installing tile, doing custom application or investing in improvements such as grain bins and other systems to increase efficiency.
• Cost-sharing: Discuss cost-sharing opportunities with landlords to reduce expenses. Examples could include ditch and drainage improvements.
• Quarterly reviews: Hold internal discussions at least quarterly to assess land and resource management strategies.
5. Foster Vendor and Stakeholder Relationships
Building strong relationships with vendors and stakeholders can open up new opportunities and improve decision-making. Eatherly says it’s something few think of that can have huge rewards. Ideas to foster these relationships include:
• Regular communication: Meet with equipment providers, grain merchandisers and other vendors often to understand their needs and expectations.
• Explore opportunities: Ask what crops they’re looking for or what equipment they want on trade. That creates a relationship
with your vendors and also helps you create a premium niche. You can examine opportunities and make capital decisions better based on future opportunity.
6. Enhance Accountability and Ownership
Accountability and clear ownership structures are essential for smooth operations, especially in a family-run farm. Ensure:
• Transparent procedures: Create non-negotiable operating procedures to which everyone adheres, fostering a transparent and accountable environment.
• Updated buy-sell agreements: Review and update buy-sell agreements regularly, especially as younger generations become involved in the farm, to avoid conflicts and ensure smooth transitions.
7. Regular Financial and Operational Reviews
Regular reviews of your financial and operational performance help you stay on top of your farm’s business health. Key actions should include:
• Yearly balance sheet evaluation: Compare your balance sheet year-over-year to understand the
farm’s financial health and make informed decisions.
• Understand loan terms: Be clear on the terms of your loans, including collateral, security agreements, maturity dates and interest rates.
• Utilize vendor financing: Consider vendor financing options, which can offer lower interest rates compared to traditional loans.
Updating your farm business plan isn’t just about making incremental changes but about adopting a holistic approach to ensure sustainability and growth. By reconciling accounts, implementing strategic planning and automation, evaluating crop performance, optimizing land management, fostering relationships, enhancing accountability and conducting regular reviews, you can keep your farm business plan relevant and ready to address any change, economic or weather related, that comes your way. These steps will help you better navigate the cyclical nature of the agricultural industry. They will help you find and capitalize on new opportunities for growth and success.
By following these seven steps, you can keep your farm business plan relevant and ready to address any change that comes your way.
Entrepreneurial Needs of Farmers Drive Ag Finance Evolution
By Mace Thornton
The agricultural finance sector continues to evolve with the needs and demands of farmers. Flexibility and tailoring are vital, whether farmers are securing annual operating loans for seed and inputs or financing capital-intensive purchases such as equipment and land. Illinois farmers are discovering many sources and tools at their disposal.
Buck Hill, a member of the ISA Board of Directors from LaSalle County, wears two hats. He’s a soybean farmer and an agricultural financial specialist for Compeer Financial, one of the associations that is part of the Farm Credit system.
According to Hill, as entrepreneurs, Illinois farmers have numerous financial options to consider, such as a wide range of terms, customer-friendly interest rates and the decision
of whether to lease or buy land, equipment and other capital expenses.
Traditional and Retail Financing
Hill says the primary means of securing operating loans still comes through bank financing, which can be set up on an annual basis or as a revolving line of credit.
“Operating loans are still the bread-and-butter
backbone of the agricultural industry,” he says.
As interest rates have increased over the past several years the cost of those operating lines of credit has also increased.
Hill suggests that farmers also check into dealer-provided finance packages for annual production as well as capital expenses.
“There's a range of retail financing through your local seed company or retailers where
financing
Among commercial lenders, flexibility is the name of the game when it comes to working with farmers. However, farmers can also take advantage of options such as leasing and favorable financing rates from dealers and retailers.
they can give you low interest or 0 percent interest to get to Dec. 31,” Hill explains. “That is something I utilize more now in a high-interest rate period than I would have in a 3 percent to 4 percent interest environment."
Hill says leasing has become an option to secure all types of capital resources. As he sits down with customers for “kitchen-table” discussions to review their options, he always makes sure his farmer clients are aware of the large residual payments due at the end of the lease period instead of a large down payment up front.
“You can do building leases, tile leases, fleet leases, to get yourself a fleet of semi-trucks or pickup trucks,” he says. “It’s very flexible when using the leasing option is appropriate."
Balancing Interest Rates and Working Capital
Hill says the major consideration this year is farmers trying to balance the preservation of working capital with the mitigation of higher interest rate risk.
“In the last agricultural cycle coming out of 2012-2013, the one piece working in our favor was the low interest rates,” he says. “But now, with rates at 8 percent to 9 percent, how can we mitigate that? Typically, the first thing is using more cash down payments so that we don't have as much interest accumulating. But having that cash available every time you use those dollars often means having to borrow more on your operating lines of credit."
He said some farmers are using capital lines of credit that renew every five years, which can help stabilize a balance sheet to preserve working capital.
“If a farmer wants to pledge real estate for collateral, we can set up a real estate revolving line of credit that we can have obligated for a 10- to 20-year period,” Hill explains. “This lets people utilize their equity and be flexible with how they want to finance that, how much down payment they want to allocate and be nimble with tight timelines to get those investments done."
Funded by the Illinois Soybean Checkoff
Hill said there are other options, such as an annual loan conversion—a pared-down refinance option.
“With real estate and equipment loans, I am able to, once every 365 days, touch base with my customer and say, 'Rates went from 8 percent down to 6.5 percent. It looks like we can drop your rate a percent and a half, and you can still maintain your fixed rate.’ We can DocuSign that and have it out to them the same day. It's like refinancing your house, except it can be done with a phone call, no title work, no appraisal and no additional financial collection. We're eligible to do that once every 365 days per loan, so if we go through a five-year period where we're dropping a percent a year, and we go back to 3 percent interest rates, we can take advantage of that.”
Outlook for 2024
From his vantage point of farmer and financial professional, Hill thinks the likely financial scenario for farmers in 2024 is that it is a
break-even year or one with “shallow losses.”
"If we can break even or have modest margins, 2024 should be considered a pretty good year,” he said. “We need to be very cautious of what investments are in the best interests of our cash flows."
Owning vs. Leasing Equipment
Owning farm equipment offers several benefits, primarily a sense of ownership. Although the initial down payment can be daunting, purchasing machinery can be more economical over time because of tax advantages such as depreciation and loan interest deductions. The equipment's asset value also enhances a farmer’s balance sheet, aiding in securing additional credit.
Yet high down payments can strain budgets, especially for new or financially constrained farms. Additionally, maintenance
(See Entrepreneurial Needs of Farmers Drive Ag Finance Evolution, page 18)
When deciding between leasing and buying, farmers should always be aware of large residual payments due at the end of the lease period instead of a large down payment up front when purchasing. As a strategy, leasing helps with cash flow and preserves working capital.
Entrepreneurial Needs of Farmers Drive Ag Finance Evolution
(continued from page 17)
responsibilities increase as equipment ages, requiring regular and potentially costly upkeep. Equity of owned equipment can also be a double-edged sword because depreciation of value occurs over time.
Leasing equipment offers a different set of benefits that can be particularly attractive to new or small-scale farmers. The primary advantages are the lower upfront cost and less pressure on cash flow. Leasing allows farmers to allocate resources more effectively across critical areas of their operation, according to Josh Harrison, CEO for AGCO Finance in North America.
"I haven’t really seen a large upswing recently toward leasing on the tractor or combine side,” he says. “There have been peaks and valleys over the last 10 or 15 years, but we are always seeing at least some interest in leasing equipment in general. Customers have expenses or investments outside of equipment, and it frees up some capital there.”
Harrison says tailored equipment financing, whether purchased or leased, is growing in popularity.
“We have financial tools and solutions to really offer flexibility depending on the type of farm and the farmer’s needs,” he says “We have the flexibility of going short-term versus long-term. Short-term gives customers an opportunity to trade equipment more often. We do see leasing, depending on market trends, to be an avenue where customers look, but it also comes down to a farmer asking, ‘How can I get into this machine at an affordable standpoint, given all my
other costs around the farm that I am incurring today?’”
As with new equipment, leased equipment comes with the latest advances in agricultural technology. According to Harrison, farmers who want to stay on the cutting edge of ag tech are likely to “turn their equipment” every three years, and leasing provides a quicker avenue for upgrading to the latest ag tech.
Ben DeWees, Business Development Manager at DLL, works with a number of equipment dealers in Illinois and across the U.S. when farmers are in the market to upgrade their equipment.
Equipment costs can vary widely, depending on size and type, from large four-wheel drive tractors for traditional field work to smaller models for mowing and utility operations, according to DeWees.
“Your typical row-crop tractors in today's market are probably $200,000 and up,” he says. “I’ve come across some close to $700,000,” he says. “It varies quite a bit on what it is, the size and horsepower, and what it’s used for.”
For a moderately sized combine that would be used on a commercial-scale farm, DeWees estimated the basic cost at $500,000 and up for a new machine. When combined with the cost of headers, he says, "You're probably getting close to three-quarters to a million dollars.”
“Every operation is just a little bit different,” he says. “We’ve had some operations that have only done leasing over the last decade and others that have only done retail financing. And then you've got some that switch back and forth depending on the situation. But I haven't seen any strong uptick or demand this year compared to past years. It seems to be pretty in line with where we've been.”
According to DeWees, farmers interested in equipment leasing are usually pursuing a strategy to maximize their cash flow or preserve their working capital. Or,
he explains, sometimes the lease option just allows farmers to acquire newer or larger equipment than they could secure through traditional purchasing.
“It lets them get into some newer, bigger equipment for a little less money,” he said.
Leasing agreements, according to DeWees, can be fully tailored to meet the farmer’s needs, including factors such as the length of the lease that corresponds to warranty terms or timely ag tech upgrades, all the while optimizing cash flow.
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Handling High Interest Rates
Tips to position your farm for the long term
By Joli A. Hohenstein
It’s not breaking news that interest rates are high. But what if we told you interest rates are high, but you can do something better position your farm to weather the cycle?
The Kansas City Fed reports agricultural interest rates on operating loans sit at 8.83 percent as of this writing, not only higher than last year but higher than the long-term average of 8.23 percent. After adjusting for inflation, USDA's Economic Research Service forecasts net farm income to decrease 27.1 percent in 2024 relative to 2023—leaving it 1.7 percent below the 20-year average (2003-2022). Some experts still predict the Federal Reserve could lower interest rates in 2024, but when remains a mystery.
That means smart farming starts not just with precision
technology but also with a new approach to financial management.
Case in point: It used to go without saying that paying down debt should be among your first financial priorities. But in the high-interest-rate climate of 2024, that might not make the most sense—in fact, it could end up costing you more in the long term.
It’s harder than ever to predict what’s coming for any farm, and using all of your cash reserves to pay down or limit debt might leave you in a precarious position. That's particularly true if things get worse before they get better. Financial experts offer three key strategies to help your farm better weather the current high-interest rate cycle.
First, take a hard look at your cash flow. Know exactly what is
coming in via receivables as well as the forecasted payables you’ll have flowing out.
Working capital should play heavily into your plan. Look at your operating expenses from month to month and determine your requirement for working capital. That is the number you should target to have in reserve for the proverbial rainy day.
If you have money markets and short-term investment accounts, this is the time to leverage them. Consider that as excess cash that you can use to keep the farm rolling.
Key questions to ask:
• How much working capital does my farm require for month-to-month operation?
• Do my money markets and short-term investments earn
enough to hold them static?
• Could they work better for me as operating cash?
Next, take a hard look at the amount of debt you are carrying in relation to the value of the grain you are holding for sale.
Equally important as rates is how much debt your farm uses and carries. For example, longer repayment terms might keep payments low, but it’s important to consider the composition of debt on your farm before committing.
Your grain marketing plan should already contain a risk management component, and now is the time to take a closer look and potentially retool that. We’re more than halfway through the year, and much has changed since you made the plan. It might be time to tweak your risk tol-
erance level in accordance with market developments and your own crop projections.
Key questions to ask:
• What does it cost to take grain to market later versus now?
• Does the sell price cover the interest rate I’m paying?
• Could I benefit more by converting that inventory to cash?
Finally, examine your lending options through a new lens. Hard times call for hard decisions. Your trusted lender simply might not be able to give you the most competitive rate, and it might be time to consider alternative lenders.
Alternative ag lenders provide options that many traditional lenders might not be able to offer, such as the flexibility of interest-only payments for debt consolidation. These alternative lenders are sometimes able to customize more than traditional lenders, creating packages based on specific farm needs.
Tap into the insights of your tax adviser, accountant and farm attorney, and ask them for thoughts and strategies. You might be looking to increase your cash flow while keeping ownership. You might be open to outside-the-box agreements where you share profit and loss with the lender. With an alternative lender, many different options are out there. It’s important to consult with a variety of your stakeholders and advisers to ensure you’re examining the offer from all sides, including cash flow, taxes and FSA payment impact.
Key questions to ask:
• Are there other lending resources I could explore?
• Could an alternative lender provide a solution for my farm?
Bottom line: Run your numbers, and know where you stand. Review regularly and keep updating your projections. Above all, keep your mind open and ready for new strategies.
for on-farm
Compared to recent years, the size of higher-interest-rate farm operating loans in 2024 has decreased Credit: Pinion Global
The cost
grain storage has soared since 2022, making it more important to analyze the value of stored grain against the option of paying down or lessening the acquisition of additional debt. Credit: Farm Credit Services of America
Taxes Are Changing Is Your Farm Ready?
By Collin Cisco,
ISA Public Policy Manager
Benjamin Franklin once famously said, "In this world, nothing is certain except death and taxes." This rings especially true for Illinois growers. Although they must
consider planting dates and input costs, they must also navigate a complex and rigorous tax system for their farms, businesses and families. The business aspect of running a farm operation can be as stressful and complicated as any other facet of farming. Just as the weather and markets are
always changing, so too are our state and federal tax codes constantly in flux. One critical issue that all farmers must prepare for is estate taxes and estate planning. Illinois is one of the few states that has a state estate tax, so farm families must be prepared to deal with
both federal and state estate taxes. Estate taxes are paid from the assets of an estate before the remaining assets can be distributed to the heirs. The executor or trustee of the estate is responsible for filing the required tax returns. In the 2023 tax year, the federal estate tax exemption applies to
estates valued over $12.92 million, increasing to $13.61 million in the 2024 tax year. Additionally, the federal estate tax is portable between spouses, allowing them to combine their estates to double the exclusion.
However, Illinois farmers face a different issue: The state's estate tax threshold is just $4 million, and it is not portable between spouses. Given the high value of farmland in Illinois, many family farms quickly reach this threshold. When other assets such as equipment, real estate and retirement funds are included, many Illinois growers far exceed this limit. Unlike the federal estate tax, which taxes only the amount exceeding the threshold, Illinois' estate tax applies to the first dollar of the estate's value once it surpasses the $4 million mark.
Fortunately, in recent years, several bills have been filed in the Illinois State House and Senate to reform the state's estate tax. These proposed changes
include extending the exemption amount to $10 million or more, excluding agricultural land entirely and adding portability to the tax code. Yet any reform inevitably reduces state revenue, and in times of tight budgets, these efforts have been stymied.
On the federal level, one crucial tax issue for Illinois growers is the stepped-up basis provision. This provision is vital for growers and helps keep farms within families. When assets are included in a taxable estate, their value is "stepped up" to the market value at the time of the owner's death. For example, if a farm was bought for $100,000 and is worth $1 million at the time of the owner's death, the new basis is $1 million, effectively erasing $900,000 in capital gains. This provision applies to equipment as well. Eliminating or altering the stepped-up basis would hurt farm families who might need to sell portions of inherited estates, forcing them to pay high capital gains taxes.
Get Paid for
Over the years, multiple proposals have addressed steppedup basis. One proposal aims to eliminate it entirely, which would require farming heirs to pay large capital gains taxes if they sell inherited estate assets. Another proposal suggests taxing the gain in value at the time of death, effectively imposing a second estate tax on farmers.
Another important tax provision growers should understand is the 199A, also known as the qualified business income (QBI) deduction. This deduction allows non-corporate taxpayers to deduct up to 20 percent of their qualified business income, plus up to 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. The 199A deduction can also affect the net operating loss (NOL) of a QBI. When a pass-through business owner realizes an NOL in a QBI, the deduction is $0 for that tax year. The NOL may be carried forward to the next year
A SWOF enrolled farmer planting soybeans into a cereal rye cover crop in northern Illinois
and treated as a negative QBI that is then subtracted from any positive QBI for the year. These issues are ever evolving and fluid. At the state level, many proposals aim to initiate conversations on estate tax reform. Many legislators believe that the $4 million threshold is too low, affecting not just farmers but many residents and business owners throughout the state. On the federal level, the Tax Cuts and Jobs Act, signed into law by former President Donald Trump in 2017, encompassed steppedup basis, 199A and many other important provisions. It is set to expire in 2025. This provides the Illinois Soybean Growers a great opportunity to begin conversations with our congressional delegation and state legislators. We must remain actively engaged in advocating for tax relief for family farms and businesses. In times where margins are slim, we cannot afford to add undue burdens on our growers.
Through the soy checkoff, U.S. soybean farmers are investing in new production practices to continuously improve their sustainability while protecting the air, water and soil for generations to come.
Illinois Soybean Association Announces Statewide Town Halls for Illinois Farmers
Last year, the Illinois Soybean Association (ISA) successfully hosted five town halls across Illinois, from the southernmost regions to the northern areas. This summer, ISA is excited to continue the effort by organizing another five town halls across Illinois, in collaboration with county Farm Bureau offices. These events will take place in:
1. Bloomington at the ISA Office on Aug. 5
2. Quincy at the Adams County Farm Bureau Office on Aug. 14
3. Sparta at the Sparta Community Center on Aug. 19
4. Freeport at the Stephenson County Farm Bureau Office on Aug. 21
5. Joliet at the Will County Farm Bureau Office on Aug. 29
These town halls will give our Government Relations Team the chance to keep you updated on the latest policy developments at both the federal and state levels. By sharing updates on recent policy changes and looking into the future, ISA ensures you're informed about factors that will impact your everyday life. Key topics on the agenda include:
• Eminent Domain and Pipelines
• Ethanol/Biofuels Market
• ESA/EPA Herbicide and Pesticide Regulations
These events are more than just informational sessions – they are your chance to voice your concerns and thoughts as we head into the
2025 Legislative Year. Issues such as herbicide and pesticide regulations, policies affecting market trends in the biofuels space and eminent domain and pipelines will directly impact your farming operation and profitability.
Our commitment to addressing the unique needs of each Illinois soybean grower is reflected in the geographical distribution of these town halls. By attending the town hall closest to you, you can discuss opportunities and challenges specific to your area.
Participating in these events is not just about hearing updates on policy; it’s about making your voice heard. As a group, we're stronger when we share our concerns and priorities. ISA can use your feedback to better educate legislators about what truly matters to Illinois farmers.
We encourage all Illinois growers to actively participate in these town halls. ISA will continue to host these events town halls each year to ensure every area of the state receives the necessary support. Through informed dialogue and proactive engagement, you can help drive positive change in Illinois agriculture.
If you are interested in attending, please RSVP to Matt Johnston by texting or calling 309-846-4598. We look forward to seeing you there!
Meet Representative Mary Miller
As a family farmer, I understand the challenges faced by those who work tirelessly to feed and fuel our nation. Growing input costs, higher diesel prices and inflation are making farming harder. Passing on the farming tradition to my children and teaching my grandkids the value of hard work on the farm is something my husband and I hold dear.
It is my great honor to represent my fellow farmers and the agriculture industry on the House Agriculture Committee in the U.S. House of Representatives. I’m pleased the committee recently passed a five-year Farm Bill that promotes trade, supports crop insurance and protects the farm safety net.
Over the past year and a half, I have had multiple Farm Bill round tables and had the chance to talk with many farmers across the district about their priorities for the 2024 Farm Bill. I have been very grateful to receive your feedback on the current programs and am pleased that many of our priorities made it in the bill. This includes maintaining a robust crop insurance program and increasing funding for the Market Access Program (MAP) and Foreign Market Development (FMD).
The House Farm Bill also supports producers by increasing reference prices, strengthening rural broadband, funding the modernization of agriculture research facilities, and improving standing disaster programs and access for livestock. I am excited about provisions in the energy title requiring the Administration to study the impacts of solar panel installations on prime farmland. This study, which incorporates concepts from my bill, the Preserving America’s Farmland Act, includes estimating the loss of agricultural production from solar panel installations.
I am very concerned with America’s prime farmland being covered with solar panel installations. Food security is national security, and if we cover our prime soil with solar panels, we will become dependent on our adversaries to feed American families.
As a soybean farmer myself, I also know how important biofuels and bio-based markets are
for our products. That is why I was happy the Farm Bill included the reauthorization and improvements to the BioPreferred Program, which encourages the purchase and use of bio-based products, and affirms sustainable aviation fuel as an advanced biofuel. Biofuels not only provide a critical market for our crops but increase America’s energy independence and strengthen our national security.
I am committed to continuing through the Farm Bill process and swiftly passing a bill out of the House that prioritizes protecting family farms.
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