00:00 You know what? I'm gonna go ahead and throw it out there most Farm people love production. They love production. They love 00:06 talking about bushels and pounds and gallons and they love production. You know what they'd always like talking about money, but 00:12 it's very important because agriculture is a business and so specifically we're talking about the fact that in the year 2022. We had Record Bar income record 00:21 farming coming 2022. Now what? Welcome to extremeags cutting the curved podcast where you get a guaranteed 00:31 return on investment of your time as we cut your learning curve with the information. You can apply to your farming operation immediately extreme AG, 00:40 we've already made the mistakes so you don't have to managing. Your Farm's Water Resources is a critical component to a successful and 00:49 sustainable farming operation Advanced Drainage Systems helps Farmers, just like you increase their yields up to 30% with their 00:58 technologically advanced Water Management products visit ads pipe.com to see 01:04 how they can keep your business flowing. Now here's your host Damien Mason. Well greetings and welcome to a very useful episode of 01:15 Extreme Ice cutting the curve. We are talking about Finance. It's 2023. We're recording this in the New Year. We're looking back at what happened last 01:24 year what we think can happen moving forward and more importantly how you can protect your money ship. Let's face it. You 01:30 work really hard you do a lot of the right things you tune into extreme act to figure out how to get more bushels more pounds more all that 01:36 stuff. Now, let's figure out a way to keep it. Let's figure out how to do the right thing. We got Ben Hansen. He is 01:42 Kelly Garrett's accountant and Iowa his accounting firm is a handsome and gross and we've got Kelly Garrett. One of the original five founders of is it Hansen gross? Anyway, 01:51 I don't know but what's your first time Roasting Company? It's gross and Company. Your name's been gross and 01:57 I like cancer and grow stuff. I think you don't want to consider. It's a marketing thing. All right, we got Kelly Garrett when the original founders of extreme AG. Okay. We had a really big year 02:06 last year successful farming. I've got it right here in my hands. If you're watching this. I'm holding up a copy farm income jumps 14% to a record high. The numbers 02:15 were looking pretty good starting at about summer. We were a little scared in the spring by summer things were looking pretty good and 02:21 then all of a sudden by late summer early fall, we're like, hey, this is gonna be a good one. 02:27 22 biggest year on record for farming come 160.5 billion dollars now. We also know that we are an inflationary 02:36 period everything else costs more. We're going to address the cost side. We're gonna address the revenue Side Kelly in a nutshell. Tell me about 2022. It was a big year for you, 02:45 right? Absolutely Big Year, you know you're gross income tremendously high with the yields that we had which were just a bit subpar. We're 02:52 dry. But you know seven dollar corn this year. We sold corn on a basis contract in September netted out about eight dollars and 03:01 35 cents an acre, you know, 200 bushel corn. That's obviously sixteen hundred dollars an acre right there. That isn't what 03:07 the on-farm income average obviously, but the biggest numbers we've dealt with ever. Biggest numbers you dealt with ever and I remember I talked to my farm guy 03:16 that rents my acres and I said these numbers look really big. This was last spring. He said sure they are and he says maybe we're just 03:22 we're just exchanging bigger amounts of dollars. I'm writing more checks for big stuff, but I'm also getting bigger checks in that 03:28 kind of is true. But you made more money than you spent on a comparative basis while inputs were up with yields being what they were you 03:37 still made more. In other words. It wasn't all. Obviously it was not only eroded away by increased input cost right? 03:44 Absolutely. It's not all net. But but the net does go up. It's supposed to we hope it does. 03:52 Give me a picture looking at your farm client been 2022. Grain Farmers made money livestock could 04:01 be a little bit tighter depending on where we're talking about. My understanding is the tree nut people still took it in the 04:07 shorts because that was an issue like but that's not anybody. That's probably in in the midwest. We're talking about like almonds and whatnot tree fruit 04:13 had a little bit of a problem some specialty crops. We don't grow many of those in Iowa in general broad acre agriculture. 04:19 Hugely profitable 2022. Yes. Yeah, absolutely, you know as you just look at twenty twenty twenty twenty one twenty two 04:29 now twenty three you just you know, you started selling your 2020 one crop it, you know, four dollars your 2022 crop at 04:38 you know, five dollars probably and you know, you're 2023 crop you're probably starting to sell it at six dollars a bushel. So when you have you know, good prices with good 04:47 yields. It's kind of crazy what you end up with gross revenue per acre. 04:52 All right. So what's this mean rolling into the 2023 season Kelly? We already are seeing that numbers are going to be probably pretty 04:59 good, but maybe not as good as they were in 2022. What's your expectation? And what adjustments are you making? 05:05 well, I actually think that the numbers could be as good in 23 not you know, like Ben talked about we're selling six dollar corn and things like that right now 05:14 where we have the ability Market was down, you know fairly bad today 10 to 15 cents, you know, 05:20 that's not always exciting but You know, maybe the yields won't be depressed this year. Like they 23 yields might be back to aphs and you've got the ability 05:30 to sell this corn at the end of the day. Your gross dollars could be the same. You know, that's something to be aware of I I 05:36 expect I expect I'm optimistic. I expect growing season to be back to proven yields where this year. I was about 91% So I feel like my production 05:45 was nine percent low if my production goes back to what my hundred percent expectation is and we have six dollar coins to the seven dollar corn. I believe gross 05:54 dollars per acre can be the same. We we have maybe the person, you know, we have a lot of listeners from all over the country and it's important for them to think about your yields were off a 06:03 little bit. You still are having record amounts of you know, amazing income but it's because prices were good. You marketed correctly. 06:09 You being you know, the extreme act guy you put the right nutrients in the right water to everything but you still the fact that we got really warm and 06:18 really dry for part of summer because you're just far enough West Starting somewhere in Illinois and then going west we started to 06:25 have the dry problem. That's what your product. Yeah, it was dry. And we were 9% below average. You 06:31 know, my average proven yield is like 215 and our corn made 200. It's like 90 and a half, you know and the last few years. We've been experiencing 225 to 06:40 235 bushel corn. That's what I would tell you my expectation is and this year, you know again yields are a little depressed but Market 06:50 made up for it now six dollar corn is nothing nothing to sneeze that or let pass by and if we go back to that 230 bushel scenario, 06:59 the gross dollars per acre still look very very attractive. Ben your your AG clients did well, 07:07 we always hear stories or were used to the farm guy is at the equipment dealership on New Year's Eve day with his checkbook 07:16 trying to get a half million or a million dollars worth of money off. This books by buying a piece of equipment did that 07:22 really happen? Does it really happen? Did any of your clients actually do something like that? Oh, yeah. I called me on New Year's Eve and just ask if you could write a check for something and 07:31 I said absolutely you can write a check for something but it comes down to whether it's actually deductible or not. You know prepayments are 07:40 supposed to be fixed and determinable. So you truly know what you're buying. Um, you know, he was gonna write a 07:46 check for a machine shed. And you know, it's not really deductible unless you know that machine shed to standing that day and ready for you. So, um, 07:55 yeah, we had a lot of people that want to go to the equipment dealer and try to check but you know Unfortunately they can 08:01 find the equipment that they wanted so Oh, yeah, they weren't prepaid their way to where we thought was a reasonable tax bracket and you know 08:10 bought the equipment. Hopefully this coming year. Do you ever have them where you say? You know what just just pay me just pay me and I'll just take your money ever do 08:20 that. Absolutely. We'll allow people to prepay their next 20 years of accounting fees. There's a thing. 08:28 Sometimes expense been when things get fat in a Countryside, you know, they get a little sloppy. So you hear these stories like okay. I got a 08:37 little sloppy. Well, we had a big year. I bought a boat and then you go to these Farm conference and I say you can't go around doing that because next year to your smell things are 08:46 gonna get bad and you went and bought that Person certainly in the United States of America if you give them a bonus they go and buy stuff what's wrong with 08:55 what's wrong with Farmers doing that? You know, they say the well, you're you're worse decisions are made during the best of times, you know, 09:03 it comes down to you know, what are you actually need what you know, what's what's your cost of living right and have you get that but answer me 09:12 this Ben I get that but if the person if you have a person that works in town and they have their job in their cubicle and you give them a $20,000 Christmas bonus 09:21 and they run out and buy a wave runner. Nobody says you stupid idiot. You should have continued to live like a popper you got no right buying a wave runner you work 09:30 in a cubicle in town. I mean I'm being sincere, but I also I hear this and I I guess what's the happy medium? 09:37 Yeah, well, what's kind of interesting about that scenario is that that person in town may have went and bought away from her but then they got to 09:46 the dealership and they decided rather than paying cash for it. They wanted to finance it. 09:51 So all the sudden they have some payments in the future and then they went and bought something else as well because they still had the cash 09:57 in their pocket. So, you know from a farmer perspective, you know, you have to make a good 10:03 decision of does it make sense to finance this thing and you know buy your way out of taxes, but not use that cash to 10:12 go towards that equipment which is what you bought your way out of taxes, right? 10:16 So then you have all this excess funds and you know, what? What do you do with it, right? Okay, I was actually what you do with it. But before do I get back this 10:26 other thing used farm machinery has actually been worth more a year or two down the road then it was last year. How did you 10:35 tell it? How could you tell one of your clients? Hey, it's a really bad idea to go and buy that use piece of equipment when 10:41 the reality is they get money off their books and it's worth more two years from now. So it's an investment. That's all so depreciable 10:47 that also goes up and I get to take it off of my taxes right now when I had a fat Year. Tell me why I wouldn't or shouldn't do that. 10:54 So that's interesting because most of the things you're talking about are, you know something that's you know, maybe five seven ten years old but not 11:03 brand new stuff. Um some of the brand new stuff there was an example of a sale here this year. That's something sold for 50,000 combines 11:12 for $50,000 more than what it was purchased for in the spring. I think that's a rarity. This is you know, definitely times that 11:21 we haven't necessarily seen before so, you know historically speaking, you know equipment has new equipment has not appreciated on 11:30 a year to year basis. Would you agree Kelly? I would agree. This is unforeseen territory that we're in. 11:37 And so I think back to your question Damien. It's not that I I could technically tell you that it's not a good decision. But you 11:46 know, this is not You know something that has historically repeated itself year over year over year the people that did that 11:54 three years ago. Yeah, it was a good idea. But then when they go to trade that they got to pay new equipment Price Right, which that's inflated as well. 12:03 Now here's the thing and I I said on all the sessions where they say. It's the silliest thing to do go and get a half million dollars 12:09 off your books by buying equipment at the end of the year. If you don't necessarily need it, and I guess well, if it saves you, 12:15 you know, 25% of half. It could save you $125,000 of taxes. You can make a lot of mistakes if you're saving $125,000 on taxes. 12:24 So I guess correct me on why we're in it's a right idea when it's wrong when it's right. So so that's a something we pray. 12:33 I at least preached to my clients quite a bit is you know, should your depreciation that you take on that piece of equipment match the 12:42 amount of debt that you have incurred, right? So the what happened in you know, 2012 2013 is 12:51 that we had some really good times really good not great yields, but really good prices people made a lot of money and what 13:00 they did is they went out and bought their way out of taxes, but they finance it. Oh and they financed it that appreciated it 13:09 all in one year solve their tax problems still had cash and their pocket and they went bought a lake house, which is all fine. But then 13:18 the following year they had to you know, that tax problems and they had to service their dad. And so a lot of people made it through those times some 13:27 people did it, but it puts you in a position. Mentioned that you weren't able to make ends meet right and you you cause yourself a strain on 13:37 your cash flow. So typically I try to preach to people that if we're planning on deducting it all in one year. Let's try to pay for 13:46 it or at least let's you know find a good use for that cash and understand that you know, we are going to have have enough cash in the 13:55 future to service that Debt Service. It takes a little bit of experience. You know, we got a lot of different ages of people listening and pay attention to what we're doing here to extreme Ag and 14:04 I used to make the joke to my Farmer buddy you have times if you run your own business where you're owed a 14:10 hundred thousand dollars. It's just blowing in the wind. You're like, yeah. Okay. I'm over 100,000 and you got another time 14:16 in your business like like there's 1400 dollars that you're owed and you're looking for it. You know, it's like you like what where is it? Hey, is that if you check the 14:25 mail, is that check here yet? Like it's only 14 hours like Isn't that kind of what we're talking about here is that you 14:31 you know when things are fat you're like, okay. I got this money to blow and then there's gonna come a time. So do you find yourself? Sometimes a little bit like being the 14:41 Shall I say somewhere between the parent or The Three Little Pigs story that you're always teaching somebody about remember what tomorrow can bring. 14:48 Yeah to some extent, you know because you really you don't know what you know, the following year will will bring and you know, how am I supposed to tell you 14:57 how to spend your profits from this this last year? That's the difficult part right? You have a really really good year. What are you 15:04 playing on doing with that money? Are you gonna roll it back into your operation, you know reduce your line of credit all 15:10 the sudden that looks like a really good idea because you know, people are paying seven eight nine percent on their line of credits. 15:16 That's a great return on your money, right? I guess is that what you're I want to hear your advice on what you're saying to do and and you're saying 15:25 listener. It's not about 2020 anymore that's in the books. But 2023 according to Kelly's gonna be a good year. Do you anticipate having to manage the 15:34 money and these tax things Kelly in 23 as vigorously as you did in 2022 based on what you said you think the 2023 is gonna 15:43 be every business 22 Yes, I think it could be as good if we Market correctly and of course, you know, we have to raise a good crop but I believe that we will and you 15:51 know, but that's what that's what we have been for. You know, we we had a meeting here a week or two ago. And we 15:57 we planned for 22 and what we're looking at in 23 because it it's kind of a moving scale or a moving 16:03 Target where You know one year isn't just gonna fix it all we we try to balance between the two or even three years. You know, I we're talking about bringing my sons into the 16:13 operation more to try to spread out the tax hit things like that. We do different things business-wise to try to accommodate these large numbers. Okay. So 16:22 we're going to talk about exactly what Ben's advice is and what is and what Kelly is doing and we're gonna find out if he's actually listening and adhering to what you tell him to do Ben before I 16:31 do that. I want to remind you dear listener. Well, we got Kelly on the phone here. I was in Kelly's office like October of 16:37 2021. I think it was it's been a while ago and he said something pretty smart. He said that his whole entire objective in the year 2022 was about stress mitigation reducing stress 16:47 on his plants. He said Damian, here's the thing if I take a big huge plate of food and put in front of a great athlete like Mike Evans 16:53 who's like back in this training days. He's a great Athletes Training. I give him a huge plate of food, but he's banged up. He's injured. He's still he can't 16:59 uptake all that nutrition. So we're really just wasting nutrition. He says now apply that to 17:04 The field I'm putting out a bunch of nutritional kinds of fertility, but also I got crops that are banged up. They're injured. They're ill. 17:12 I'm wasting nutrition. So he says I think we got to work on stress mitigation first. So Kelly applies agerson's accomplished Max and Furrow for stress mitigation 17:21 to maximize his yield agerson. One of our business partners here at extreme AG has a product called accomplished Max. It's an infraro treatment 17:27 that he use you can use in other ways. He used it info for stress mitigation to maximize yield. If you want healthier plants, if you 17:33 want your plans to be able to uptake all the nutrition that you're putting out there and that big old plate just think of our buddy Evans and 17:39 think of what Kelly told us use accomplished Max exclusively available from your nutrient AG Solutions dealer. 17:46 I hope Evans appreciates my little ability there to we you know, bring him into this because I want him to know and feel the love. All right, answer 17:55 me this. What are your recommendations in 2023 assuming the the numbers are going to be what we think they are Ben. Hey first 18:04 off. You can't tell this farmer who we don't know yet. Well, we know we just had record 2019 was amazing with the government payments 2020 had 18:16 some record numbers because we threw 51 billion dollars of covid relief money at agriculture 2021 and 2022. The commodity prices were good. 18:25 And the yields were pretty darn good even though they were a little off and Kelly situation. We're now in like year five. We're heading 18:31 into year five of things being good. You're four year five of things being really good. What are you telling people? My advice is that you should manage your business whether things 18:40 are really really good or really really bad because ultimately down the road, you know, you pay more attention 18:46 when things are really really bad. You should continue to pay attention when things are really really good and and to 18:52 not let those things you're find yourself that you you become very very successful, right, you know, so I guess during really good times. Well, yeah, does 19:01 it make sense to buy some extra product for my top? Well, what's Roi on them doesn't make sense. So what are you going to 19:09 gain by doing that rather than just sign in the check and saying well, we'll just throw throw everything up the dart at the wall kind of like the stock market in 2021. You could 19:18 have done really really well in 2020 2021 at the stock market, but if you weren't paying attention, you lose it all in 2022. So that is 19:27 you know, the advice that we're given to people is that you manage your business as if you know, 19:33 you're you're not gonna see your your next day. Um, you know, I guess not not to run scared and you have to adapt and change but pay attention to the details 19:42 understand your break evens understand your cost of of living what you have to have to continue to operate to continue to live and try 19:52 to make the best decisions you can you know with what's in front of you by the way. It's always you're so defensive. I wrote in one 20:01 of my business book that you should never take long-term business advice. 20:06 On entrepreneurial business that is from your accountant or your Banker or your attorney because all they are programmed do 20:12 is play defense. You just painted the gluteus picture that like, we're all gonna die Chicken Little 20:18 over here is the Chicken Little Kelly because you know what? I don't think it's as bad. He just you're gonna pretend you're 20:24 never gonna make another dollar and Baton hatches. I'm like, I'm just looking for you know, let's do the right thing and he's out here tell me it's armaged. 20:33 He's used the most people not listening. So he's got a really dial it back to try to scare him into the correct space. Okay? 20:40 So are you listening to what he says because you talked about what you're doing with some of your adjustments and we don't need to count your money. But I think part of what we do here extreme AG 20:49 is we're pretty open book about how we can help others water water a few things you're doing to make sure that you don't have all 20:55 these good years go to tax obligation instead go into protecting Garrett Land and Cattle. 21:02 Well, first of all, it seems like we never stop expanding so I you know, 21:08 I've always got plenty of depreciation, but I don't feel like we're buying things at the end of the year just to you know have that 21:14 that quick depreciation but it seems like we're in a constant state of expansion and you know, and that is always been going on. But the last 21:23 thing we're doing, you know, my sons are all coming of age. Now, they're between 1922 and 23. We're starting to bring them into the operation 21:29 because then you've got more Social Security numbers to spread the tax head out on basically, I guess is that how you would explain it Ben and 21:35 you know, I mean, we're bringing them in an operation splitting it up instead of all of it being in my name. I we're putting in their name and sharing in the wealth and sharing 21:44 the operation and and I I feel that's the correct thing to do to teach them at a young age going forward how to handle it and and let them have some skin 21:53 in the game some ownership and reward their efforts then. Yeah, you know you we try to manage, you know tax brackets 22:02 to the extent we can and when you can, you know spread out. Possible income among, you know, five people instead of 22:10 two and you try to take advantage of that 24% bracket or even the 22% bracket. You can bring about a million a million 22:19 two dollars worth it. Million and two hundred thousand dollars through the system on after tax basis. That's not on a really 22:27 high rate. So when you're having an early good years, you know, let's pay some pay some income tax. Let's do it wisely. Let's make sure we we 22:36 do it wisely to extent where we're paying federal and state tax and not necessarily Social Security Medicare tax. We try to do anything we can 22:45 to structure a lot of our Farmers to not have to pay that Social Security Medicare tax. Wait a minute. Now, I'm a self employed guy and my account 22:54 tells me that a lot of my tax bill is going to Social Security. Why is that wrong? 23:00 You know, so for the most part for you, you are earning all of your income off of your name. And your and what's your performing on 23:09 a daily basis? Which IRS says that? Hey, you're just like a W-2 worker to some extent all your income is generated off, you know you performing Services 23:18 the difference between you and a farmer is that, you know, a lot of times the farmer May own land which he generates income off 23:27 of and if he's not structured correctly. He's paying tax on all of that income. Even it could be land rent if it was in a separate 23:37 entity. That's not subject. He's paying tax and all that income that subject to Social Security Medicare tax. Now if you restructure he could 23:46 potentially paint still be paying tax all that income but a portion of it would be exempt from Social Security Medicare understood 23:56 Crop inputs are going up Machinery expense. My understanding is we went up like 24% last year. What does this do to the equation? I don't care who goes first on 24:06 this. Maybe Kelly should I know you can lock in some inputs. The point is there's the thing about taxes, but there's also thing about not getting screwed and not overpaying for your inputs because 24:15 at the end of the day you'd rather pay tax. This is something most Farmers never do by the way, Ben you'd rather pay taxes, then then 24:21 be broke. I think still there's some Farmers that would maybe just rather be broke than pay taxes. Am I right about that man? That's true. We really try to preach economics to 24:30 our clients if we can, you know, make good business decisions and then let us handle the taxes for you. 24:36 But yeah, there's there's plenty of people out there that they say they can't afford to retire because you know, they're number 24:42 one business partner is Uncle Sam and Uncle Sam will take about half that when they do retire if that's absolutely no fun. So we try to we try to structure and plan 24:51 to get people out of that problem. Kelly inputs. Um, we maybe dodged they were up in 2022, but we maybe dodged a 25:00 bullet and some of these AG companies. Let's face it looked around and said we can pass on some price increases that's 25:06 happening in 2023 how you navigating that to make sure that you remain profitable? You know that's has a lot to do with extreme AG 25:14 rather than buying a lot of dry fertility, you know a lot lot of dry P&K or things like that. We're looking more at the stress mitigation the 25:23 plant Health pieces. We're trying to keep our budget the same and figure out how to improve soil health 25:29 and figure out how to use foliar applications to to keep the yields where they're at or even improve them and we're learning more learning more 25:38 about the soil learning more about mother nature and how she works to maybe get away from some of that high price Drive fertility, you know, 25:47 a lot of times when I speak about a carbon Market, I will say I think the average farmer feels like farming sustainably 25:53 has to come with a yield hit and because of extreme Ag and the things I've learned I don't believe that that's true and I believe that I can keep my budget in check, 26:02 you know within reason it's it's still gonna have to go up but I believe I can keep my budget in check within reason using some of these more Progressive practices. 26:11 To keep costs low and I still have an expectation of a higher yield. You are going to be paying more for inputs period And so as 26:22 everybody else I mean so is everybody else. There's nothing like some way that you know that you're getting it for, you know, half off 26:28 or something. No, but you can what about the things like paying beforehand is that usually a good idea? I mean, like could you 26:37 gotten money off his books for prepaying for seed? Is that something? Oh, yeah, Ben. What do you preach to your people about those 26:43 kinds of things? Your prepaying's fine. There's not a problem with that at all. So you do have a 26:51 cost of funds there, right? You know just people are borrowing money now for your prepaids versus you 26:57 know in the past him. Well, maybe they're not borrowing money for it. But there's no problem with that really in a 27:03 lot of times, you know to the extent you can to say someone doesn't need to prepay for something but it still 27:09 makes sense for them to prepay to get their discounts. We encourage them to do it and then we'll find a different way to generate income 27:15 to get them back to the number that we wanted them to be at. So it's so take advantage of the economics is what we try to preach been so speaking 27:24 of taking advantage of Economics. What's your I keep we keep saying preach. I mean, I'm not sure I want to be when your clients if you preach to 27:30 me it gets a little much. Okay. So let's just say advice. What are you advice right now? 27:35 Give me some at what give me a couple three pieces of advice you're giving your clients in 2023 that are different than a few years ago. Because if 27:41 it's always the same old stuff, you know, I took management 200 accounting at Purdue fifo lifo filo. That's first and last 27:50 out. Nobody ever does that I made that up and I just made that up. That's a little counting humor for you. All right. Anyway, would you would you 27:59 tell me something that's beyond the normal 20 30 50 years old advice about, you know normal stuff or anything. That's specifically you're 28:08 saying and 2023. you know, that's a It's a tough question because I think our clients in general since they came on board. We 28:20 try to manage their taxes and their help demands their business to the best that we actually can. So whether it's you know structuring them correctly. I'm 28:30 helping them, you know analyze whether a purchase of a land deal is good whether they should put their wife on payroll if they 28:39 should pay their kids a lot of times those decisions. We've we've been making those decisions and helping 28:45 make them those decisions since they got here. So yeah, so it's nice not you know, you're gonna say it's tough this year. But okay, let's talk about something that's different this year. I just 28:55 got a thing from my bank if I want to use operating money. It's eight percent right now or eight and a half percent. It was four percent a 29:01 year ago. There has to be some advice there, whatever you tell people. Yeah. So, you know stretch out your payables as long as you can to collect 29:10 your caches cookies you can right so we don't Market. People's grain Forum, but you know truly to help him understand that there's a cost to carry that grain, right 29:19 if you want to wait until July to sell your grain. Um, you can absolutely do that. But if you have a line of credit, it's costing you, you know, seven percent annually or roughly three 29:29 and a half percent until you know summer to get that grain. So understanding that there's a cost to carry they're never used to be, you know, 29:38 even from a tax perspective, you know paying your taxes on on March 1st, rather than before the the end of the year, you know, that made him made 29:47 some sense, you know, the we had a few things that we had a lot of our clients prepay their taxes. But yeah, those 29:53 are just little things there stretch out your payables manage your line of credit and just pay attention to to what you have in your bank account. Make sure you're 30:02 not paying your bank more than you should be. What's different about 2023 than even just a couple years ago Kelly? 30:10 The interest rate, you know, the one thing that Ben and I have talked about along with my banker Jake Jared Creed marketing consultant, you know, I with these 30:20 large large incomes the bigger net income. I always wanted to pay my land down and they have advised me not to do that. You know, a lot of that land is locked in that 4% interest. 30:30 Now, as you said you're at eight, I think my interest rate on my operating right now seven. So instead of paying that land down we're just trying to keep as much cash around 30:39 as possible instead of using the line of credit the line of credit gets pretty large all the time. It seems 30:45 like but this year I feel that we're gonna be able to pay almost all the you know, we'll we'll be able to deal in 23 30:51 and mostly cash which they're there's a real nice investment there that's in your case eight percent. So the thing that is different is don't pay 31:00 ahead on your land and stress that that's by the way. No that's that's where it's a little challenging because it takes discipline. Am I right then you hey, don't use that seven to 31:09 eight percent operating. line sit on cash and if it's a big enough number you can get some interest on that in the meantime right until he's the money starts going out the door and then 31:21 When you're sitting there, you got a pretty big chunk of money. And then that's let's go back to that Waverunner, you know, 31:27 it starts getting nice here in April and he says why don't I buy a whole Waverunner for the whole family and then you're 31:33 saying no remember we kept that cash back and didn't pay down land because the land is that fixed long term. It's a there's a lot discipline involved there been are 31:42 you a disciplinarian with your clients? Yeah, it takes a lot of discipline to have money sitting in your bank account and not to 31:50 pay down your long-term fixed debt, right? Um, but if you're in the growth mode to know that there's an opportunity down the road to pay cash for 32:00 something rather than having to borrow for it. There's a ton of value in that. Yeah. Oh we try 32:06 to make you know help people understand, you know, what's their spread? Right? So what are they? What's that? What 32:12 are they borrowing? Yeah fix versus what they can get on their money in the bank right now. And so 32:18 you have a lot of people that might be, you know fixed at four percent. They might be able to go get four percent on their money. That's it 32:24 in the bank. So their true cost of funds is zero. Yeah. And that's all right biggest mistake. You see been Hanson biggest mistake. You see 32:34 maybe it's been throughout your whole career, but maybe it's the last two years biggest accounting or money mistake because we are 32:40 gonna we think we have a good 2023. We had a good 2022. We had a good 2021 2020 was good. Mostly because 51 billion dollars of federal money was throwing it 32:49 again. We're in probably you're number four or five of things being pretty good nag. What mistaker you seeing in this good environment? 32:56 You I would I you know at first I was going to say the biggest, you know, just accounting and tax mistake that I can recall 33:05 even over. My history is so a beginning farmer which isn't probably most of your guys's clientele, um than having, you know, 33:14 not hiring a good account right off the bat um, and you know having a big net operating loss in their first year and then trying to work their way out of 33:23 it. Um, that's a big mistake in my opinion just not having good professional advice. I think that's something I tell Kelly would tell you too is that he's built 33:32 a team of you know, very good marketers. I would say hopefully, you know good accountants. Um good agronomists that 33:41 have all helped to guide them down the path to you know, he can focus on growing his crop and manages business is it true that accounts play 33:50 too much defense and enough offense for their entrepreneurial clients. I mean I accused you of that. I won't know if you see 33:56 it as being an accurate accusation. It depends who you have. I would say that you want to a business partner rather than someone that's gonna 34:06 slow you down all the time, but I would say that people do call your account. You know, the woman right the people that'll 34:12 say well hold on a second. Let's make sure that this makes sense. But sometimes you just got to do it, right? No so 34:18 doesn't make sense to buy, you know, $6,000 Farm ground, you know, four four five years ago people have said no, but now it looks like it's a pretty good 34:27 investment. Right? So you do have to take some risk and I feel like there's plenty of accountants out there that are are taught to say, you know, no no and I 34:36 hate to be that person but sometimes like I said during during the best of times the worst decisions are made. I hope that's not now. I hope people have learned from you 34:45 know, previous years. Everyone says, we're living in the 80s, right? I think the times are different. There's much healthier balance sheets 34:54 and they're used to be I would agree with that. That's a subject for another day. Is this the new 1980s and when we get New mic we can have you come back we'll talk about is this the new 80s and 35:03 I'll tell you the reasons. It's not. Hey Kelly Garrett on the way out the door here. I call this episode record farm income 2022. 35:09 Now what so now what? Going forward tell what is your thoughts or recommendations or advice or observations in 35:19 moving forward now what? My recommendation is to make as much money as possible what Ben and Brad always tell me is not to let the 35:27 the tax Tail Wag the income dog or something like that. They're like, you know, don't don't let the Tail Wag the Dog and and you're you're income 35:36 go get it go do the best you can do make as much money as possible hire a good accountant and let them take care of it. And that's what that's what 35:45 we do with Ben and Brad, you know, and I just I don't really worry about the taxes every we come in, you know, like you 35:51 said, it's been good for several years in a role. We're rolling this income we're doing things and and we continually come 35:57 up with another plan to to not have to pay a tremendous amount of taxes and to be responsible with it. So my advice is is 36:06 to have a good accounting system have a good team and I do feel like I have one. Yeah, and that's good nice. And by the way, I joke 36:12 about Farm people. I am been around in my whole life, but it was two years ago when things started getting really good in 2021, and I said you guys have amazing yields and these prices are holding 36:21 up like Didn't think they were going to and then some of the old more backward mentality Farm types it. Well, yeah, we're gonna 36:27 make a lot of money. There's got to pay taxes and oh my God, it's I've been hearing this wall. Yeah, we're making all kinds of money. There's got to pay some taxes. Like well that's 36:36 beats the hell out of not making any money and not having any taxes. So anyway, his name is Ben Hansen and give me the name of the firm again because I miss I 36:45 misspoke. It's it's gross and Company. Growth and Company. Yep, you know that we're in Dunlap, but I'd like if your name was 36:54 in there because you're the only face of the company that I know. So I'd like you to go ahead and offer a name change to the firm and and 37:00 call it Hanson and gross. You should be first Damon, you'll appreciate this. You know me being the accountant that 37:07 I am then I'd have to change all of our letterhead all of our signage all of our emails. You know, why those 37:13 Farmers wouldn't want to go around making money just have to pay taxes wouldn't want my name to be on the front of 37:19 it didn't Ebenezer Scrooge you have this problem. He kept Marley's name out there for seven years anyway. 37:25 Little Christmas reference there been Kelly Garrett. Thanks for being here record farm income 2022. Now what question 37:31 mark that's what we told this episode. We hope this gives you some guidance and we want you to have a very prosperous 2023 to help 37:37 you be prosperous tune in to all the great stuff. We're offering here at extreme AG. You know, what we give you Financial to give you business most 37:43 important we give you ways to enhance new practices and use new products on your farm to help you make bigger yields and thereby bigger profits. That's what 37:52 we're all about. Thanks. Share this with somebody you think that can learn something from it. If you are not a paying member you can go ahead and for 750 37:58 dollars great investment deductible expense. I might add can get you behind the paywall where you'll get also exclusive content 38:04 and exclusive access to the extreme act guys see us at commodity Classic this year with our friends at Natures also see us at the Louisville farm 38:13 machinery show, February 14th. I'm Damian Mason. Thanks for being here till next time. This is extremags cutting the Curve. 38:21 That's a wrap for this episode of cutting the curve, but there's plenty more check out extremead.farm where 38:28 you can find past episodes instructional videos and articles to help you squeeze more profit out of your farm cutting. The curve is 38:37 brought to you by Advanced Drainage Systems the leader in agriculture Water Management Solutions.