Set Yourself Up for Success
by Planning Ahead
Spring has now sprung, which means planning is in full swing for this year’s growing season. However, for long-term success, it is becoming more imminent to think even further into the future. 2018 and beyond will come quickly, and it is projected to be much more difficult to survive in this ever changing market. Corn prices could be partly at fault due to the fluctuation. In fact, the prices are more likely to range between $3 to $4 instead of $3 to $8. This drastic change could mean smaller profits, even for average yields.
We’ll see many farmers adjusting their cash rents, not to mention their land values. Long term, lower commodity prices are not sustainable. Banks or lenders will tire of helping out farmers. So what are you supposed to do? It’s imperative that steps be taken to preserve and protect your bottom line. In fact, many farmers are doing just that; thinking ahead to protect their future.
To start, try to reduce input costs. Additionally, it definitely helps to have nice, solid yields. Plus, if you don’t have crop insurance, really consider getting some. It could be your saving grace. Basically, the bottom line here is to check and check again. Is there anywhere you can make changes that will help with finances? For example, check input costs, cash flow, possibly even lifestyle changes.
Think About Risks
In order to be successful, you must acknowledge all the possible risks. Could it be possible that your farm is subject to higher interest rates? 2017 brings uncertainty about whether the Federal Reserve will raise interest rates or not. Be wary, and know that this is a possibility. On the other hand, some think interest rate hikes depend on whether the economy surges.
Lastly, keep your ears to the ground and modify practices as it becomes necessary. Strategically planning for 2018 is going to be difficult, especially after the eventful presidential election. Do yourself a favor and look for any potential changes to the tax code.