Opportune Time to Review Financial Position

With the crop is in the ground and the growing season progressing, it’s a good time to take a look at your year-to-date numbers and start planning through the rest of the crop season. Here are some of the things to think about:

1. Comparing budget to actual: How did the crop input expenses, fuel, repairs and other outflows compare to what was budgeted? You can do this by taking a simple analysis of your records versus what you had budgeted for each expense. Reviewing family living and other outflow and inflows can also be helpful. And if you are behind on bookkeeping, this is a great time to catch up.

2. Future expenses: Take a look at upcoming expenses and other outflows (such as term loan payments) through the rest of the year. How does it compare to the availability on your operating loans, crop insurance coverage, and expected crop value? How does the actual year-to-date and expected compare with the original budget? Doing this prior to year-end will help reduce stress and surprises, and gives you the ability to sit in the driver’s seat when there are opportunities to build income or expand.

3. Marketing Opportunities: Grain marketing can and should be done year-round. Not only will having grain contracted reduce uncertainty, it is useful for potentially locking-in profits and reducing downside risk. Pricing farm stored grain for winter or spring delivery ahead of time, can also be a healthy process. Stay in contact with your Grain Marketing Advisor for opportunities and strategies.

Opportunity to improve cash flow
With recent decreases in interest rates, it’s a great time to review your balance sheet and its structure. It may make sense to consolidate equipment or real estate loans. With lower interest rates and potentially longer loan amortizations, it’s a unique opportunity to improve cash flows as well as reduce interest expense.

Whether you have questions regarding putting together a cash flow for year-end prior to harvest, assessing a balance sheet for lower rates, reviewing a year-to-date profit and loss statement, or discussing opportunities for expansion, feel free to reach out to your AgQuest Farmward Business Relationship Managers.