Farm Futures logo

It’s the last call to create financial plans for ‘22.

Darren Frye, CEO

February 14, 2022

3 Min Read
2-23DecisionTime-iStock-Getty Images-903548438-800.jpg
Getty Images

When it comes to making financial plans and projections for the upcoming year, I’ve found that most farmers tend to land in a couple different camps. In thinking about financial plans for their farm business, there are some farmers who work on creating plans for the upcoming year during the winter, but then don’t really update the numbers as things change and adjustments are needed.

Other farmers take a very different view. They focus primarily on the reality that the numbers will change and keep changing throughout the crop year. Their conclusion is that there’s no point in creating plans and projections for the year because things will change and the plans won’t be useful at that point – so they don’t plan.

Still others create plans in the winter – and then update and adjust the plans whenever something changes that impacts the numbers. They use their plans all year long to help with financial decisions that must be made. They are able to view the impact of different decisions more easily because they can plug in different scenarios into those updated projections.

Who gets the most?

I think the third type of farmer I described here is the one who is getting the most out of their plans. It’s true that both types who engage in planning do still both benefit from going through the planning process itself and the issues it helps leaders think through.

Related:Mind your biscuits — and bake better ones

However, the third type goes a bit further and actually updates and uses the information throughout the crop year. Doing so gives them solid financial information about their operation that they can use when it comes time to make decisions – even in the heart of the growing season.

The key is taking the mindset that projections are flexible – and to look at different scenarios for the year. Working to build in as much flexibility into the plans as possible helps to keep the plan relevant. It makes it much less fragile or dependent on everything going one certain way.

Becoming flexible

Thinking through a number of different scenarios also helps keep our brains flexible and prepared – because we’ve already considered a variety of ways that the upcoming year might possibly go. That can really help once a farm leader is inside of the growing season and needing to pivot or make new decisions once additional information arises or circumstances change.

This winter, where are you at now in terms of financial projections and plans for your farm business? On a scale of 0 to 10, with 0 being “I have no plans started at all” – to 10 being “My projections are ready and I’m planning to adjust and use them throughout the growing season,” where do you currently stand?

Related:Fertilizer prices, weather dominate Kansas Commodity Classic

I encourage you to take the opportunity yet this winter to get some solid financial projections made for your operation – that you can use all year long. For some help with getting started, get in touch with our advisors. Their experience working with farmers can help in getting the necessary numbers in place.

Markets in mind

Grain marketing is another area of the farm operation where it’s key to have forward-looking plans in place – and your financial projections can help with these plans, too!

Our market advisors partner with and bring education around different marketing tools. They also help farmer clients with planning and execution around marketing decisions.

Get a free two-week trial of our marketing information service (MarketView Basic). Your free trial includes regular audio and video updates, technical analysis, recommendations and more. Or learn more about our market advisor programs and offerings at

The opinions of the author are not necessarily those of Farm Futures or Farm Progress. 

Read more about:


About the Author(s)

Darren Frye

CEO, Water Street Solutions

Darren Frye grew up on an innovative, integrated Illinois farm. He began trading commodities in 1982 and started his first business in 1987, specializing in fertilizer distribution and crop consulting. In 1994 he started a consulting business, Water Street Solutions to help Midwest farmers become more successful through financial analysis, crop insurance, marketing consulting and legacy planning. The mission of Finance First is to get you to look at spreadsheets and see opportunity, to see your business for what it can be, and to help you build your agricultural legacy.

Visit Water Street Solutions

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like