I know this is how a lot of farmers are feeling right now. Why am I hearing SO much about equity right now?! No doubt equity has always been an important factor in assessing the financial condition of a farm operation, but with commodity prices making cash flow tight - equity could be the saving grace. When cash flow and ability to … [Read more...]
How to make it through 2017
We are all very aware that 2017 will require some planning to make it through. The current price environment is making everyone take a hard second and third look at their current operation. In talking with farmers the question that I have been getting the most (or hearing the most as many have been asking multiple people) is " How are we going to … [Read more...]
The Most Expensive Sentence You Can Say
When you think about expensive, what exactly do you think about? Some think about a house, car, or possibly jewelry. Did a sentence ever cross your mind? I've heard tell of this "so called" most expensive sentence you can speak for some time now. What is that sentence? Simple - "I have always done it this way." How is that sentence expensive? … [Read more...]
Real Talk – Shortages
Do you see a shortage on the horizon? It gets to a certain point of the year when you can really see how your crop is going to turn out. You will start running all the numbers in your head to determine how much revenue the farm will produce this year. If you have some doubts of whether you will be able to make all debt payments or pay your … [Read more...]
Strategies to G.R.O.W.
Working Sharper? Agricultural Wealth Strategies To G.R.O.W. There is a story that tells of two lumber jacks in a race to cut down the most trees in a day. Both had the same style ax, the same amount of time and the same opportunity. However,they approached the work very differently. The first man never took a break. He chopped relentlessly all … [Read more...]
How Sensitive is Your Ag. Portfolio?
I have written several articles concerning how risky a farmer’s operation is. However; they are not the only ones who should be contemplating their level of risk. If farmers begin to fail for a variety of different reasons, what will your loan portfolio look like? What percentage of your portfolio would then be considered troubled or downgraded … [Read more...]
Land Rich, Cash Poor
Are you land rich and cash poor? Well, I promise you are by far not the only one! Many farmers find themselves in this situation often. Farmers are known for having healthy net worth with often more than 90% of their assets being farmland. Farmers often pour all of their excess cash into improving the land, making debt payments on the land, and … [Read more...]
Structuring for Success
Structuring the farm operation properly is one of the most important things any farmer can do. You want to know why? Think about this. What happens if the tractor hits a school bus? What name or entity is the equipment owned by? Who will get sued? Can they get to the personal assets? What if something happens to you, will your family know what … [Read more...]
Everybody Has a Plan
“Everybody has a plan until they get punched in the mouth.” This famous quote from Mike Tyson is ringing very true for the current climate in row crop farming. Everybody has a plan about how they will pull their operation through this current “low price storm” that is hitting the market. The questions to be asked are - “How exact is the plan?” and … [Read more...]
Agricultural Financial Statements
Why does your banker want an updated financial statement all the time? Why is it so important? Well a financial statement tells your banker an overview of your overall financial condition. In order for a lender to continue to extend credit, they have to be confident in your ability to repay your debts. If filled out correctly a financial statement … [Read more...]
