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Last Updated: 5/2/2017

Defining Agricultural Production

Agricultural production is a series of activities – the production process – that result in a product that will ultimately be sold at retail.

Agricultural Production Process

The agricultural production process begins when:

  • You purchase or breed a qualifying animal
  • You prepare the soil for planting crops

The process ends when:

  • You place livestock or crops – packaged or unpackaged – into finished goods inventory
  • Your grain is sellable or at a stage that it can be commingled

Note: If a product is not placed into finished goods, the process ends when the last step before loading the product for shipment is complete. Loading or preparing a product for shipping are not part of the production process.

Types of Agricultural Production

Agricultural production includes these activities (when they result in a product that will be sold at retail):

  • Agriculture – cultivating soil; planting, raising, and harvesting crops; rearing, feeding, and managing animals
  • Aquaculture – raising private aquatic animals (fish)
  • Floriculture – growing flowering plants
  • Horticulture – growing fruits, vegetables, and plants
  • Maple syrup harvesting
  • Silviculture – growing and caring for forest trees

Businesses involved in agricultural production include:

  • Breeding operations
  • Farms, including crops and certain animals
  • Greenhouses and nurseries that grow their products to be sold at retail
  • Ranches
  • Tree and sod farms (if products are sold at retail and not installed by the grower)

Agricultural production does not include:

  • Storing or preserving raw materials before the start of the production process
  • Storing, preserving, handling, or moving finished goods
  • Storing or processing agricultural products at co-ops, grain elevators, dairies, or meat packers
  • Raising animals for your own use
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