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The goal of many agricultural families is to pass their farm or ranch to their children and/or grandchildren. The income from the farm or ranch, however, is often not high enough to support two or more families. And, because most agricultural family’s wealth is represented almost entirely by the value of their farm or ranch, the parents aren’t able to rely on income from other assets. 

One option for these families is to sell a portion of their land to fund the parent’s retirement. Many, however, don’t like this option. This is why it is important to have other investments to draw income from.

Qualified retirement plans such as IRAs, SEPs, Simple IRAs and 401(k)s offer significant tax-advantages and are smart ways to accumulate money for retirement. Annual contribution limits vary depending on the type of plan. The current annual contribution limit for IRAs is $5,500 if you are under age 50 and $6,500 if you are age 50 or older.  If you are married and only one spouse works, you can still contribute the maximum amount for each person under a Spousal IRA. To contribute this amount, you must have at least $11,000 or $13,000 of earned income, depending on your age.

The annual contributions for SEPs, Simple IRA and 401(k) are much higher. 

A 401(k) has a maximum annual contribution limit of $53,000 if you are under age 50 and $59,000 if you are age 50 or older. Contributions to these plans are based upon income. For those families with no employees, a Solo 401(k) is a great option because it offers a high contribution limit without the costs associated with a traditional 401(k) plan. Solo 401(k)s also offer a Roth component.

Selecting the right type of retirement plan is very important.  What is more important is selecting the right investments for those plans. 

In my experience, most agricultural families’ investment experience is limited to land and livestock. I commonly speak with families that have a net worth of several million dollars with little to no money in a qualified retirement plan.

Agricultural families tend to be conservative investors. Many invest in Certificates of Deposits (CDs) because of the safety they feel it provides.  While CDs don’t expose you to market risk, they expose you to inflation risk – the risk of your investments not outpacing the rate of inflation. Outpacing the rising cost of living is a goal for most investors.

By investing in bank CDs, you are essentially trying to protect yourself from default risk. Default risk is the risk that a company or individual will not be able to make the required payments on the money they owe you. Because of the Federal Deposit Insurance Corporation (FDIC) insurance protection offered by banks, people feel they do not have to worry about their money if the bank goes broke.

The FDIC is a U.S. government corporation that operates as an independent agency. As of January 2016, FDIC provides deposit insurance guaranteeing the safety of a depositor’s accounts in member banks up to $250,000 for each deposit ownership category in each insured bank. Although the FDIC is chartered by Congress, they do not receive any federal funding. Banks pay insurance premiums to the FDIC.  If a bank goes bankrupt, they file a claim with the FDIC.

If you’re concerned about protecting your money from default risk, a potentially better option is to invest in bonds issued by the U.S. federal government. The U.S. federal government doesn’t just insure your money. Rather, it guarantees it. The guarantee printed on each bond issued by the government is a “full faith and credit obligation” of the government of the United States of America.

The U.S. government has the highest credit rating in the world and has never defaulted on an interest or principal payment. You might say, therefore, that it is the issuer of the world’s safest investments. So, if you desire a safe investment, instead of a bank CD, consider investments backed by the full faith and credit of the U.S. federal government.

In our next article, we will compare investing in CDs to a mix of stock and bond mutual funds. 

Chris Nolt is the owner of Solid Rock Wealth Management, Inc. and Solid Rock Realty Advisors, LLC, sister companies dedicated to working with families around the country who are selling a farm or ranch and transitioning into retirement. 

To order a copy of Chris’s new book: Financial Strategies For Selling A Farm Or Ranch, visit or call Chris at 800-517-1031. For more information, visit and

Unmanned aerial vehicles (UAVs), often called drones, are a hot topic in the agricultural industry. Drones, fitted with a wide range of camera and lens types, have the potential to revolutionize business as usual by bringing detailed, timely and unique crop data to the producer.

Some producers already use UAVs fitted with cameras to check distant watering sites, track their livestock and check for pests, crop deficiencies, field moisture levels or document crop failures. The sky is truly the limit for aerial technology.

What is a drone?

In Federal Aviation Administration (FAA) terminology, an unmanned aircraft system (UAS) – generally equivalent to a drone or UAV – is an aircraft without a human pilot onboard. Either an operator on the ground controls it, or it is auto-piloted by an onboard computer system. The FAA sets specific regulations regarding the weight of aircraft and camera, plus rules governing the on-ground pilot’s maneuvers and locations. Note that the FAA requires operators flying for work-related purposes to obtain a certificate to fly a UAV.

Two basic types of UAVs are commercially available to the producer, either fixed-wing, such as a small airplane, or multi-rotor, like a quadcopter. Fixed-wing UAVs have longer flight times and bigger payload capacities but are usually more expensive. Multi-rotor types generally have shorter flight times, lighter payloads, are more maneuverable and are generally less expensive.

Aerial imagery

For many agricultural uses, the utility is not the drone itself but the aerial photographs it can provide. Aerial imagery is a powerful tool allowing producers to see patterns that aren’t visible from the ground, at the time and place of their choosing.

Cameras mounted on a drone can be fitted with special lenses that see things the human eye can’t. Using multispectral and hyper-spectral lenses, cameras can capture data in infrared, ultraviolet and very narrow visible light bands. Videos, single photos and multi-spectral images such as near infrared or thermal – or combinations of these – are all possible.

Many plants show signs of stress and growth in bands that are invisible to the naked eye, while others show signs of growth in very narrow visible light bands, so the special lenses provide information that is otherwise difficult to get. A producer can obtain evidence of water stress, chlorophyll production or photosynthesis, weed distribution, nutrient deficiencies and disease hot spots.

A camera connected to a GPS system can take “geo-tagged” images referenced to specific field locations. This allows for comparing images taken at different times as the growing season progresses.

As with any technology, cost and complexity vary greatly. Special lenses that capture non-visible light add to the price. And because of the large amounts of data collected, more complex systems require special software designed to analyze and process the raw data before they can provide usable images. Most set-ups come with the necessary software, for an additional cost.

Some might ask, “Why not just use satellite imagery?”

UAVs have several clear advantages over satellites. First, a typical satellite image resolution of 50 feet is quite coarse compared to UAV images. That means everything within a 50-foot by 50-foot area is represented by one pixel or one color. Conversely, the area represented by one pixel in a UAV image can be on the order of a few inches. UAV images can monitor individual plants if needed.

Additional advantages of UAVs include being able to fly them according to the producer’s timetable, not the satellite’s passing, and avoiding atmospheric interference such as cloud cover, which often affects satellite imagery.

Will one work for you?

To summarize, the advantages of UAVs are clear – they can fly according to your own timing and weather, record the precise level of detail you need and allow you to track a host of pertinent crop data. They provide an opportunity to make management decisions immediately and with precision that is well below the width of a seeder or sprayer. This approach, often called precision agriculture or “data-driven” agriculture, offers significant cost-saving benefits.

However, many questions must be answered as you determine whether a UAV system is right for you. How many acres do you need to photograph in a day? How often? What types of imagery would be best for your operation? What kind of resolution will your management decisions require?

Your answers will determine what type of equipment will be needed and whether purchasing or outsourcing is more cost-effective. Producers often have enough going on that many might want to outsource this task.

There are commercial options for UAV services. However, when considering outsourcing, keep in mind that some amount of agronomic expertise is still likely needed for interpreting the information collected.

For Markus Braaten, Certified Crop Adviser based in Kalispell, Mont., the crux of the matter is this – what questions do you want to answer with aerial imagery, and is UAV technology the best way to answer those questions? Consider how you would expect to use this technology and what value it would bring to you as a producer. You will need to determine whether its benefits would justify the cost.

UAVs are an emerging technology in the agricultural industry. Their use is not yet commonplace and issues of privacy have been raised regarding detailed aerial imagery.

Discussion continues on what is acceptable use and how UAVs fit into a producer’s toolbox. Like any new technology, UAVs will continue to get easier and cheaper to use and more prevalent in the industry. Their impact in the agricultural sector will very likely grow.

If you would like to discuss the pros and cons of UAVs for your business, seek out a reliable resource such as a Certified Crop Adviser in your area.

For more information on certified crop advisers, or to find one near you, go to


By Wyoming Governor Matt Mead

I have often shared my grandfather’s advice, “Where you find a blade of grass leave two.” These words, to me, embody the farmer, the rancher – all those engaged in ag. Ag producers value the land, animals – wild and domestic – crops and open space. Wyoming is a place where for generations we have worked to leave two blades of grass for one. Cowboys, cowgirls and the Code of the West were born in ag and today represent Wyoming values in all industries. Ag has been integral to Wyoming since before statehood and, more than 125 years later, is Wyoming’s third largest industry. It is a main supporter of the number one and two industries – energy and tourism. Wyoming ag is standing strong as Wyoming is strong.  Here I will address a few of the many things important to ag and all of Wyoming. 

Wyoming has established itself as a leader of the nation. We have earned Standard and Poor’s highest credit rating, AAA, four years running. We are the state with the Best Return on Investment for Taxpayers (2014), the Lowest State and Local Tax Burden in the Country (2014) and the Second Highest Increase in Gross Domestic Product (2013), among other accolades. I talk about these things, not to brag, but because they mean things are going well and people in Wyoming are doing well. These are indicators of our success historically and today. We are in a good place. There are challenges, to be sure, and we continue to be vigilant and to lead the way as we work on them. 

Last year the EPA proposed new rules defining Waters of the United States. These proposed rules have sweeping negative implications for Wyoming and for ag. Wyoming has taken the lead in challenging these rules and in educating the public and policy makers on their excessive reach. We saw success when the EPA withdrew the interpretive rule redefining agricultural exemptions. The balance of the rule proposal contains onerous provisions and extends the authority of the federal government into areas of state primacy.  

Wyoming, after nearly three decades, successfully delisted the wolf. Wyoming’s plan provided for 10 breeding pairs and 100 individual wolves in the state and an additional five breeding pairs and 50 individual wolves in Yellowstone National Park. The plan worked. The wolf continued to be recovered, and reasonable controls – Wyoming controls – were in place. When the delisting was challenged in court, the judge found the wolf was recovered and that Wyoming’s management was effective but still overturned the delisting. We are fighting this decision on multiple fronts, but it is clear that the Endangered Species Act is broken. We need to work on the Act, as we continue to work on delisting grizzly bears and ensure that there is no need to list the sage grouse. We should recognize that these species thrive in great part because of ag and, without ag, the challenge would be a greater one – perhaps insurmountable. Wyoming’s fight against federal overreach will not stop.

This year I introduced my water strategy. Something like this – a state water strategy – had not been done before. Water is tied to everything we do in this state. It’s tied to everything we have done, and it’s tied to everything we are going to do in the future. The strategy was developed over the last year, with wide public input. It is a good strategy and has 10 initiatives including a "10 in 10" proposal – 10 small reservoir projects in 10 years. The time to protect Wyoming water is now. The proposed budget contains more than $46 million for water construction and rehab projects. Water development is an ongoing effort.There are also other infrastructure projects in my supplemental budget. I believe my budget recommendations, many of which are in the budget that is before the Legislature as I write this, are conservative. The supplemental budget will keep operating costs relatively flat and most appropriations are not recurring. 

These are exciting times, and this is just a glimpse of issues and topics of interest to ag producers. But every essay has its end, and I end by reiterating that Wyoming is strong. I wish you green grass, healthy calves, abundant crops and good prices in 2015.

The United States country of origin labeling (COOL) for beef was implemented in 2009.  While opponents to such consumer transparency issues have claimed that COOL was supported by those U.S. cattle producers wishing to restrict trade, I can tell you that was never the intent and the facts simply don’t support this propagandist tactic.

From 2005-09 the Canadian cowherd declined by 18 percent, from around 5.4 million cows to 4.3 million cows. Interestingly, from 2010-14, after COOL implementation, there has only been a minimal contraction of one to two percent annually. 

While I’m not saying COOL had anything to do with these herd stabilizations, what an interesting coincidence

What has been really impressive is to look at the volume of live cattle and beef imports from Canada as a percentage of the Canadian cowherd. One would have thought that as the Canadian cowherd was shrinking, the percent of product for export after domestic use in Canada would have dropped. However, it appears the U.S. is taking a larger and larger share of Canadian production – both cattle and beef – as a percentage of their cowherd, with 2013 and 2014 representing the highest at somewhere around 55 to 57 percent and that’s figuring a 100 percent calf crop.

When you look at Mexico, it is basically the same. The Mexican cowherd began a steep decline in 1994 when Mexico had about 13 million beef cows. The cowherd shrank to 10 million in 2002 and 6.7 million in 2007. Interestingly, about the time COOL was implemented in 2008-09, those numbers started leveling off, and in 2011-12 reached 7 million head. Numbers then fell again to 6.7 million in 2013 and 6.8 million in 2014 following a severe drought.  

Interestingly, even though Mexican cow numbers had dropped, three of the five top cattle import years since 2005 came after COOL was implemented. And yes, they had a drought, but one of those years was 2014. Amazingly all this has happened at a time when the Mexican government initiated programs to add more USDA-approved packing plants and rapidly worked to expand cattle feeding in Mexico to capture more value for the economy.  

Under these programs, beef exports have increased to the U.S. now making Mexico the fourth largest exporter of beef to the U.S. In fact, we saw live animal equivalents of Mexican beef imports rise from 60,000 in 2008 to about 400,000 in 2014. When you add it all up, five of the top six years of cattle and beef equivalent have come since COOL was implemented. 

If Canada and Mexico were truly being discriminated against, as determined by the WTO panel ruling, we should be taking less of their production, not more. However, a common theme through their market reports is that a strong U.S. market has been driving these exports to the U.S.  2014 will be the second highest year for cattle imports from Mexico and Canada into the U.S. and with the smallest cowherds on record.  That’s pretty amazing and certainly does not support claims of discrimination.

On another note, with increased liberalization of U.S. health protocols on bovine spongiform encephalopathy (BSE) and foot-and-mouth disease (FMD) to South American countries and the European Union and increased free trade agreements on the horizon, one can only expect increased imports into the U.S. 

This only makes it more important that U.S. producers have the tools necessary to move from commodity markets to more value-based markets with consumers, and COOL will be critical in allowing both U.S. cattle producers and U.S. consumers to differentiate their beef, as we have already done in many foreign markets. As one looks out on the horizon, one of the highest values consumers will be placing on the food they purchase in the future is “how and where it is produced.”

Leo McDonnell ranches in Columbus, Mont. and Rhame, N.D. He also sits on various industry association boards