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How to start thinking about 2022 plans

Getty/iStockphoto Gold colored 2022 sitting over a white calendar on blue financial graph. Horizontal composition with selective focus and copy space. Investment, stock market data and financial planning concept.
Make the shift now into future planning.

If you read the title of this blog and thought, “I’ve been thinking about plans for 2022 for several months already,” then nice work!

However, it’s more likely that with all the work that needs to be done at harvest, good intentions to start 2022 planning can quickly go out the window – and then not return until fall field work is complete, perhaps far into December, or maybe even January.

Most farm leaders probably find themselves in that second group. It can be challenging to start thinking about next year’s crop plans and financial plans when the current year’s harvest is still coming in from the field.

Moving forward

Many farmers feel they need the current crop year’s results in hand – both production-wise and financially – before they can take a good look at plans for the next year. But it’s a key mental pivot to make because you can really lose out on key opportunities if you aren’t looking a little further ahead than most farmers.

For example, sometimes there are opportunities to save money on inputs if you purchase them earlier, such as discounts on seed or fertilizer. The operation can also potentially benefit from a marketing plan that looks further into the future during an earlier timeframe, as well.

Getting into it

Here are a couple ways to shift now toward thinking about your 2022 financial plans.

  • Put on the CEO hat. This can be challenging to do during harvest, but set aside a few hours to take off the “production expert” hat and not think about or do anything related to the current harvest that’s going on. During that time, focus on the business side of your operation. Even though you don’t yet have full results from harvest, start looking at the current key financial metrics of your operation and use them as a springboard to start getting into financial plans for 2022.
  • Do some early scenario planning. You can do this on your own or with your financial advisor. Start creating different scenarios for the 2022 crop year and 2022 marketing plans. Work to consider some of the various ways that the market and ag environment could shift – and how that would impact your operation from a financial standpoint. Doing this now can help you prepare mentally to look ahead and begin making 2022 plans.

Think markets

Make sure to also consider your farm’s marketing plans specifically – and whether you have a marketing plan and strategy in place for your 2022 crop.

Our team of market advisors partner with and bring education around different marketing tools. They help farmer clients with creating plans and with execution around marketing decisions.

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

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

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