Protecting Farm Profits During a Pandemic Starts with Knowing Where You Stand
As planting has wrapped up in most areas, we are all thinking forward — but many questions still remain regarding the rest of the growing season. The biggest one you’re likely facing is:
“How will this pandemic affect our farm in the long run, including our farm profits?”
Granular recently hosted the first roundtable in its COVID-19 series to provide answers. The discussion was moderated by Vance Crowe and featured two guest panelists: Nate Franzen, president of the ag banking division of First National Bank in South Dakota, and David Widmar, ag economist with Agricultural Economic Insights. More than 700 farmers registered to hear the experts tackle ag profitability in a pandemic and provide actionable tips.
Start with What You Can Control
Digging right into the questions around future profit or loss potential Nate shared, “There are a lot of things to be concerned about in the ag economy today — lots of negative signals and volatility. We have to control what’s controllable. Look at your balance sheet and do whatever you can to position yourself best.” (Listen here as Nate goes into detail about what to look at on your balance sheet, including working capital and interest rate risk.)
As you think about how you can protect your profits, David stressed the importance of knowing where your farm financials stand as of today. “If you know where you are, it will help you get your mind around the uncertainty.”
Not only will having a budget help you know for certain where your farm financials stand, it will also help you evaluate how to move forward. “Small, ongoing course adjustments can really help you out as you move through the year. Don’t wait until November or December to update your records or make decisions. Producers should update their marketing plans based on the new realities,” said David.
Nate shared in that sentiment, “You need a fluid budget for your farm and you need to track your actual performance to your budget month to month. Those that track actual performance to a budget make better, more timely decisions and end the year in a much better position. It’s about singles not home runs.”
Establish or Update Your Budget
While many farmers maintain farm records and budgets on a frequent basis, the experts agreed that now is the best time to update and be meticulous about running numbers.
It can start with a simple Excel spreadsheet, or tools from Granular that organize the data from your farm to help simplify operational decisions. The experts agree that now is the time to put the effort into organizing and updating farm financials.
Granular is committed to providing the tools to help farmers track their farm operations during these challenging times. If you’re looking for a tool to track your production and financial metrics, and track your budget to actuals, visit granular.ag or reach out to us at 888-435-4726.
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