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Ortonville, Minnesota
March 30, 2010     The Ortonville Independent
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March 30, 2010

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BIG STONE COUNTY PHEASANTS FOREVER CHAPTER #43 held another successful banquet on Saturday, Mar. 27 at Sioux Historic Pavilion. Chapter members are pictured above. Seated in front is Chapter President Dave McMahon. Second row from left to right are Roger Hynnek, Curt Vacek, Doug Adelman, Redgey Rademacher, Greg Peterson and Steve Strei. Back row left to right are Bud Hennen, Travis Issendorf, Don Sykora, Darren Wille, Eric Lovgren, Lynn Lovgren, Mark Muenchow and Lon Moen. Not pictured are Doug Eastman and Charles Nieson. To borrow or not to borrow? People use debt to finance any num- ber of purchases, and borrowing money for a worthwhile purchase,is not always a bad idea. However, some buys are worth financing over time and others are not. The Minnesota Society of CPAs (MNCPA)explains how to make the right choice. Consider the costs The most important thing to re- member when going into debt is that you are paying for the privilege of bor- rowing that money over time. A bank, department store or finance company will charge you interest, which you have to pay in addition to your repay- ment of the basic loan amount. And that interest charge can be pretty hefty, particularly if you only pay the mini- mum payment each month. For exam- ple, say you buy a $1,000 television with a credit card that charges 18 peT- cent interest and you pay only a mini- mum $10 balance on every bill. Not only will it take you 10 years, or 120 payments, to get rid of that debt, it will also cost you. $799 in interest. In other words, the amount of interest you are paying could nearly buy you another TV. Let's say you paid more "than the minimum each month, and instead send in $75. In that case, it would take you 15 months to pay off the balance, at an interest charge of $124. That's a much lower interest.rate, but it's still money you could have put to better use elsewhere. With a small discretionary purchase like a new TV--something you don't really need-- always consider whether the interest charges are. worth it or whether it would be better to save your money for a few months and buy the item for cash when you have it. In most cases, you'll probably find that spending cash is the best answer. Evaluate the benefits Sometimes borrowing may be a good idea, such as when'the value of what you're buying is likely to rise over time. The best example, of course, is a home purchase. Although the real es- tate market has been in turmoil in re- cent months, ff you plan to own a home for more than five years there's usually a good chance that the property will maintain or increase its value, depend- inc on many factors that should be con- sidered when you make a purchase, such as location and the condition of the home. There are usually tax advan- tages to home ownership, such as the opportunity to deduct mo/tgage inter- est charges and state and local taxes on your federal tax return. There are als0 costs to home ownership, of course, in- cluding property taxes and mainte- nance expenses. But what sets home ownership apart is the chance to bene- fit from the appreciation in the prop- erty's value over time. For that reason, a carefully considered and affordable home purchase probably is worth bor- rowing for. Look to the long term Financing your education is also considered a valid reason for going into debt, but even in'this situation it's im- portant to analyze the pros and cons. For example, you may be able to get a quality education, and good career prospects at a public university, and save yourself the high price of a fa- mous private school. If you're thinking of going to graduate school, take a re- alistic look at how much the move will benefit your career over time before you ante up the tuition costs and lose out on potential earnings while you're in school. Education is usually a great investment, and one worth borrowing to finance, but be sure you're making the best use of your money. Minnesota farm to school, a grOwing sucess story Small and mid-size farmers, Whose products have been largely absent from America's lunch trays, are now offering Minnesota children fresh; less-processed choices, and a chance to learn where their food is grown. It's called the Farm-To- School program, and it is 15 months old. JoAnne Berkenkamp, program director for local foods at the Institute for Agriculture and Trade Policy, says the program has taken off. "I have to say, when you look at the number of participating school districts more-than doubling, I think that tells you there's real interest here." A recent survey showed nearly 100 Minnesota school districts par- ticipating in the program, serving more than half-a-million school chil- dren across the state. Three-quarters of those school districts expect to expand their Farm-To-School activi- ties in the upcoming year. Berkenkamp says the most popu- lar locally grown food item is the apple, but that's far from the only locally grown food item school chil- dren are being served. "Other common items include things like potatoes, peppers, winter squash, sweet corn, and tomatoes." Both the local school districts and local farmers are rallying behind the program, because they see the poten- tial to help our smaller farmers stay on the land, producing healthy foods. Farm-To-Shool is popular on the farm and in the schools, according to Berkenkamp. "Schools are having a good experi- ence with this, they're getting good feedback from their students and from the parents, and they want to see this grow and be successful." Berkenkamp says the growth potential for the Farm-To-School pro- gram is enormous, because it can work in different kinds of environ- ments and with different kinds of farmers. More information is available at and Farm Management Minute Getting the Job Done by Dave Marr Riverland Community College Farm Business Management Keeping costs of production down is critical to successful crop and livestock operations. The producer often has little control over the total amount produced and has limited control of the price re.ceived for the commodity, but the producer can control the cost of production. However, keeping production costs low is difficult. The Riverland Farm Business Management .2008 annual report points out the importance of cost of production to profitab!lity. When we look at the detailed expenses of 486 corn producing farms in southeastern Minnesota in 2008, we see that the lowest profit grouping of 20 percent of those farms had higher costs in almost every category when compared to the average and high profit groups. This is true on a per acre and per bushel basis. The same is true of soybean prQduction and, to a lesser I exterit, alfalfa production The trend is the same in liv.estock production. For example, lower profit dairy herds spend almost as much to support low producing cows as higher profit herds spend to support high producing cows. Why does it cost more in seed, fertilizer, chemicals, crop insurance, rent and all the other inputs to raise a smaller crop? Why does it cost almost as.much to support a low producing cow as it does to support a high producing cow? To answer these questions, we first realize that every producer starts from a different place. The corn producer who has high costs this season may be building the fertility of depleted soils or attempting to control a long neglected weed problem. Experimenting with new genetics or working with a new landlord can also be expensive. Higher input costs may not instantly result in greater yields. We know that some land is never going to be as productive as ottier land. Yet, some producers will pay too I much for poor land and pay too much to try to make it productive. In the same way, we know that it costs a certain amount to maintain an animal and provide for its growth. Costs beyond that minimum should be contributing to profit or future profit. Sometimes, livestock are not as productive as they could be because of genetics, poor feed or poor facilities. Pouring money on these problems will mcrease costs, but may never increase production. No producer likes to spend any more than it takes to get a particular job done. When the cost of getting a job done becomes excessive,.the producer has to decide whether to continue production under those circumstances and continue to take a loss, modify the cost structure to make it profitable, or abandon the enterprise entirely. For information on evaluating your costs, contact a farm management instructor near you at Welcome Ho00me Tro o s! We're Glad TO u re Here! MinnwestBank 21 Southeast Second Street, RO. Box 128 1:], Ortonville, MN 56278 IP.  (320) 839-2568 Fc