By Gary Sliworsky
Ag rep, Emo
We have almost reached the end of another year and this is your annual reminder about taking year-end farm inventories.
Many businesses take year-end inventories of goods on hand and farm businesses are no exception.
Producers, don’t forget to get inventories on your livestock, home-grown grains and forages, and any purchased feed and supplies you have on hand. It also is handy if you review and update your list of farm machinery and equipment at year-end, recording any purchases and disposals during the year.
As well, it’s a good idea to record the fair market value of your machinery and equipment.
When taking the inventory on your livestock, record the number of animals in each category, such as bulls, cows, bred heifers, feeders, and calves. It also is useful to record the estimated or actual average weights of your feeders and calves.
Be sure to record the market value of each category—and keep the value realistic.
For your home-grown grains, record the number of bushels, imperial tons, or metric tonnes you have of each type, as well as their market values. For your forages and straw, the easiest method may be to record the number of bales and the average bale weight of each type of forage on hand.
The number of imperial tons or metric tonnes then can be calculated.
Record the market value on a per bale, per ton, or per tonne basis (whatever makes the most sense for you).
Inventories for purchased feed and supplies would include hay, grain, pellets, minerals, screenings, concentrate, medicines, fuel, seed, sprays, and twine you purchased during the year but did not use.
If you have trouble trying to determine the value of the feed and supplies at year-end, simply record the price you paid when the feed and supplies originally were purchased and deduct the percentage that you used.
Don’t forget to record cash on hand in the farm account, and any accounts receivable and accounts payable at the end of December.
It also is a good idea to make a list of any debts/loans the farm has, including the operating loan. List each loan with the outstanding balance as of the end of December.
If possible, also record the principal and interest payments due in the coming year.
Recording your inventories and the dollar value of each category will make things a lot easier when it comes time for you or your accountant to do your taxes.
The information is crucial if you want to do a financial analysis of your operation, and is required if you are a partner in a Northern Ontario Heritage Fund project.
Dates to remember
•Dec. 29-30—Large animal clinic dates for Dr. Dan Matyasovszky (call 1-807-475-3837 to book an appointment).
