Does the Rain Have Your Farm Bogged Down?

Walt Moore, UGA SBDC Valdosta State University

When a storm head is building in the distance, a farmer can have an array of emotions. There are some years when the emotions are of gratitude, relief, and appreciation as the rain settles the dust and nurtures the thirsty crops. There are also years, like 2018, where the storm in the distance brought emotions of anxiety, hopelessness, and despair for farmers.

Just like life, farming has its ups and downs, and the key to longevity in the industry is having a plan to help guide the operation through the maze. Weather, unfortunately, is a variable the farmer cannot control, but a having a farm plan will definitely help guide the variables you can control and give direction for the farm operation.

A farm plan should focus on both short-term and long-term goals while creating a road map for the farmer to reach the objectives and goals for the farm. Without a plan, it is very easy for a farmer to overspend in the good years or expand their operation too quickly, leaving financial burdens too hard to overcome during the rough years. Working through the farm plan process allows the farmer to plan for both good and bad years and to have contingency plans in place. Analyzing both potential cost and revenue allows the farmer to create a more accurate budget for the farm and personal spending.

The plan will also help the farmer obtain funding, if needed, for land or equipment. The plan will give a clear illustration of the operations of the farm to a prospective financial institution. Among other items, the plan should include cash flow projections to help the farmer better understand their cash position on a month-to-month basis.

Many farmers focus on planting and harvesting while disregarding cash flow, yet sufficient cash flow is vital for the farm to be able to pay obligations and survive. A farmer would not drive a tractor without a steering wheel simply because they would not have control over their direction.  Farming without a plan is sort of like driving without a steering wheel.

The University of Georgia’s Small Business Development Center (SBDC) can help farmers put together a plan. We provide one-on-one confidential consulting at no cost to help guide the farmer through the process of farm planning. Our agribusiness team understands the life of a farmer and the hard work it takes from planting to harvesting.

It is easy to get caught up in the day-to-day commotion of farming and to disregard the essential steps of planning. We can help! Along with farm planning, we can assist the farmer with budgeting and record keeping, helping create cash flow projections for strategic planning and lender negotiations, and assisting with personnel management and labor issues. Reach out to your local SBDC office and get in touch with an agribusiness consultant who will help your farm reach its full potential.


Leave a comment

Your email address will not be published. Required fields are marked *