This fall, many farm leaders are thinking about how the farm’s financials for 2024 are going to shake out. Many farms are experiencing challenges around profit margins. That’s already well-known throughout farm country.

Farm leaders might also wonder (or worry) about their lenders’ thoughts on the situation. If your lender understands the economic cycles of agriculture because they deal mainly with ag clients and – even better – have worked through multiple ag cycles, then they already know the situation.

If your lender is less familiar with the ag world and the various economic cycles that occur in the industry, it will be important to help educate them about that. Consider working with your farm’s market advisors and financial advisors to get your lender up to speed about the cyclical nature of ag commodity prices.

Proactive approach

Regardless of your lender’s familiarity with the ag world, it’s going to be key this fall to be proactive with both your plans and your communication. The first step to doing so will be to get a clear handle on what your farm’s 2024 financial picture looks like. You can work to keep getting a closer idea of final numbers by updating things with your farm’s financial advisor.

Then it’s time for proactive planning. Your lender will want to hear your ideas and your plans for what you’re going to be doing to improve your farm’s financial picture. Prepare for that meeting by setting forth some clear plans about exactly what you are going to be working on to improve revenues and reduce expenses.

Lenders – both with ag backgrounds or non-ag backgrounds – will gain confidence in your leadership ability and your operation’s viability when you show and share your plans. Farm leaders will want to work closely with their farm business advisors to set up feasible plans with achievable goals. Your advisors may even be able to help you practice for your banker meeting or even attend the meeting alongside you.

Strong planning

The goal for you and your lender is ideally to get a strong plan in place that prioritizes the farm’s long-term future success. Your lender wants to have confidence in you as a businessperson with a clear ability and plan for how to steer the operation, even during more turbulent times in the ag economic cycle.

Whether you’ve been through a tougher time in the ag cycle before or if this is your first time leading the farm operation through it, know that your willingness to be proactive and open with your lender goes a long way in their business relationship with you and your operation. Make sure that when you create a plan forward for your operation, that you also commit to carrying it out and seeing the results through.

How are you navigating this market?

Farmers have found that getting some third-party perspective from our market advisors has helped ease their minds. The advisors help farmer clients with planning and execution around marketing decisions and help keep them up to speed on the rapidly-changing grain market situation – and how it impacts their operation.

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. Learn more about our market advisor programs and offerings at www.waterstreetag.com.