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PAGE 16. THE CITIZEN, WEDNESDAY, JANUARY 3, 1996
OMAFRA price guide available
By Brian Hall
Business Management Advisor
Clinton Field Office
Ontario Ministry of Agriculture,
Food and Rural Affairs farm
inventory price guide is now
available. The guide provides
beginning and ending crop prices
for purposes of valuing inventory at
year end.
Taking an accurate inventory at
year end is the building block to
producing an accurate set of
financial statements. The table
below lists the year end values.
You may wish to use local prices if
these differ substantially.
Ending $
Crop Per Tonne
Oats $125.00
Barley $145.00
Soybeans $330.00
Shelled Corn $160.00
Mixed Grains $135.00
Feed Wheat $145.00
Hay (depending on quality) $70.00
Straw $50.00 to $90.00
Corn Silage $60.00
Haylage $20.00
Grainlage $30.00
Financial statements are the
cornerstone to checking the
financial health of the farm
business and to planning for
tomorrow. Farm failures today are
as much a result of mismanagement
of financial resources as they are of
problems in the barn or field.
Weathering the storms in
agriculture due to unforeseen costs
or prices requires • planning,
monitoring the business and a
willingness to make the changes
necessary to put things back in
order.
The most successful water
quality improvement program in
the 50-year history of the Ausable-
Bayfield Conservation Authority
will end on March 31. The
province's decision to terminate the
Clean Up Rural Beaches Program
(CURB) came shortly after the
Nov. 29 Ontario Economic
Statement.
No new applications for the
CURB Program will be accepted.
Individuals who have already
received approval for a project to
be completed under the CURB
Program must complete their
project, have it site inspected and
approved by the local Conservation
Authority, and show adequate
proof of payment, by March 31.
However, to allow for process-
The basic framework for gaining
an understanding of the financial
health of any business is to
examine three cornerstones: the
ability to generate and retain profit,
the ability to remain feasible, and
the ability to withstand risk. No
business can survive if one of these
cornerstones are removed. How do
we measure these?
Profitability is the bottom line for
a business - not in terms of net cash
income reported to Revenue
Canada, but net accrual income
which reflects changes in
inventory, payablcs and
receivables. Profitability also
requires a business to retain these
profits. Out of profits, capital
purchases, principal payments and
owners' withdrawals are made. If a
business is to grow, these
withdrawals must be less than net
accrual income.
It is often said that the key to
profitability is cash flow manage-
ment. Many farms now prepare a
statement, called the Statement of
Change in Financial Position,
which shows where the cash came
from in a year and where it went.
Much can be learned about a
business by looking at this
statement over the past several
years.
Feasibility means the ability to
actually carry out a plan, or cash
flow it. A farm could be profitable
but unable to meet its debt
commitments or other costs on
time. Profit is the long run bottom
line, but cash-on-hand (financial
feasibility) is essential for day-to-
day survival. Building a new barn
or buying land may be profitable in
ing, the ABCA recommends that
all the above work be completed as
soon as possible. About 200 people
have had their projects approved,
but have not yet completed the
projects.
Besides financial grant incen-
tives, the CURB Program has also
developed and supported demon-
stration projects and research for
innovative and alternative
procedures to remediate non-point
source pollution. Two Ministry of
the Environment/Energy staff will
be retained in the Science and
Technology Branch in Toronto to
provide leadership and expertise in
rural non-point source pollution
assessment and remediation
through continued scientific study
and applied research, technical
the long run, but cash flowing the
project over the Nextseveral years
is critical. The opposite also exists
when you can cashflow a project,
but is not profitable and damages
the business in the long run.
Risk is the ultimate test for a
business. I have heard some
farmers admit that their role as
farm managers is risk management.
It is paramount to fully understand
the industry you are in, the
direction it is going, and the
amount of risk that is present in
your operation and what risk level
is acceptable.
One leading farm economist
suggests using the 5-5-3 sensitivity
rule; a farm must be able to handle
a five per cent drop in farm
revenue, five per cent rise in farm
expenses and three per cent rise in
variable interest.
These three cornerstones of a
farm business can be looked at by
starting with a set of financial
statements to monitor the health of
the farm, be able to react to change,
and opportunities. After all, even if
financial analysis is not your
strength, the bottom line for most
farms is improving the amount of
money returned to the owner(s).
The changing nature of
agriculture in the years ahead will
reward those who begin to use and
understand improved financial
reports and how to use them unless,
of course, you have more luck than
most.
Talk to your financial advisor or
OMAFRA advisor if you need help
on where to begin and how to
better understand the financial side
of farming.
guidance, and field support to the
rural residents of Ontario.
"Since 1991, over 600 water
quality improvement projects have
been funded through CURB in the
ABCA watersheds. Repairing faulty
domestic and milkhouse septic
systems, as well as eliminating
livestock access to watercourses
and barnyard runoff have all had a
positive effect on our local water
quality," said Doug Hocking, the
program's co-ordinator.
Water quality remains the most
important environmental issue
according to the ABCA's Conser-
vation Strategy. The Authority will
now be looking for alternate
funding to meet the demand of
local residents for water quality
technical information, monitoring
and innovative solutions.
By Sarah McLellan
On Saturday, Dec. 30 the
Cranbrook 4-H club held the
second of four meetings on "The
Power of Produce".
The meeting began with Kerry
Blake leading in the reciting of the
4-H pledge. Next they completed
the roll calls.
The next job was to choose a
name for this club. By secret ballot,
the name ''Kitchen Kuties"
(submitted by Stacey Bowles) was
chosen. Members then moved on to
By Brian Hall
Business Management Advisor
Clinton Field Office
The Advance Payment Program
provides an opportunity for pro-
ducers to manage their operating
costs and reduce interest costs.
Advances are available on spring
grains, canola, corn, soys, apples
and spelt. Shelled corn, high
moisture corn and crib corn stored
at an elevator or on the farm are
eligible.
Advances are provided to
farmers who wish to store crop for
future sale or livestock feed. The
advance is repaid as the crop is sold
or fed. The first $50,000 of the
advance is interest free, and the
remaining amount up to a
maximum amount of $250,000 is at
prime plus 1/4 per cent. -
Advance payment rates are as
follows: spring grains, $55/$60 per
--tonne; canola, $150 per tonne; spelt
(with chaff removed), $145 per
tonne; corn, $72 per tonne;
soybeans, $150 per tonne; apples
(fresh commercial sales), $70 per
bin; apples (Spy peeler apples), $60
per bin.
The apples, spelt, canola and
spring grains programs are
administered by the Agricultural
Commodity Corporation (519) 766-
0544. The Ontario Corn Producers'
Association (519) 837-9144
administers the Corn Advance
Program and the Ontario Soybean
Growers' Marketing Board (519)
352-7730 looks after the Soybean
Program. Applications and
information are available at your
local Ontario Ministry of
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the recipes they would be making.
They are: Fruit Muesli, Minestrone
soup, Tea Biscuits, Quick Tomato
Sauce and Apple Crisp.
While the recipes were cooking,
they played a multiple choice quiz
game. Team A won with 81 points
while Team B had 66 points.
After the game, they ate the
dishes they had prepared and said
the 4-H motto.
The next meeting will be on
Thursday, Jan. 4 at 1:30 p.m. at the
Grey Twp. shed.
Agriculture, Food and Rural
Affairs office, the organizations
named above or the elevators.
The application forms provide
the program details and the
administration fees that have to be
considered. Deadline for applying
for a soybean advance is Dec. 31
and Feb. 28 for all of the other
crops.
Prov. cancels CURB program
MNR wins baiting contract
Payment Prog. in place
The Ontario Ministry of Natural
Resources has been awarded a two-
year contract to drop 2.5 million
baits over more than 100,000
square kilometres to help in the
fight against coyote and fox rabies
in Texas. Texas will pay all MNR
expenses including salaries.
"I am very pleased that MNR has
been awarded this contract," said
Natural Resources Minister Chris
Hodgson. "This is further proof of
Ontario's worldwide reputation for
excellence in rabies research and
technology."
The contract begins Jan. 2. Last
February two MNR Twin Otter
aircraft were used in the
experimental fight against coyote
rabies in the state. An estimated
800,000 rabies baits were dropped
over an area of more than 31,000
square kilometres in less than two
weeks.
The plan this year is to expand
the coyote rabies bait drop zone to
include the area baited last
February, and to drop grey fox
rabies bait in another part of the
state.
During the experimental drop last
February, MNR air service staff
flew and maintained the two
aircraft, while MNR rabies research
staff trained their Texas
counterparts in the use of the
Ontario-designed bait dropping
equipment. The Ontario team
included a Queen's University
computer specialist who provided
navigational data to ensure precise
coverage of the target areas.
This year's expanded MNR
mission to Texas includes crews for
three Twin, Otters, five rabies
research staff, and the Queen's
University computer specialist.
They will work every day for one
month to complete the project.
Ontario is well on the way to
eliminating fox rabies in the
province. The fox rabies control
project, started in 1989, is expected
to eliminate the disease in Ontario
by the year 2001.
This fall MNR dropped 1.8
million fox rabies vaccine baits in
southern Ontario. In addition, the
ministry provided aircraft, baiting
machines and staff for similar,
smaller-scale, bait-dropping
projects in areas of New York State
and Quebec which border Ontario.
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