October 30, 2024
By Jordan Howe
2024 was not the year most growers predicted. In fact, market conditions have created a financially challenging situation for many growers, with declining commodity prices, declining farm income and very little relief on the horizon. These are tough conditions to withstand, but even in a down market, some growers come out ahead. Here are some things to consider as you build your plans for 2025:
Goal setting will help you see the forest from the trees and can offer useful perspective in a down market. If you only focus on the here-and-now, things may look pretty bleak. Pull back a bit to see the big picture. Project even a few years out, and it will be easier to have a positive outlook. Conducting a goal-setting exercise can help you gain this perspective and be better prepared to capitalize when the market shifts.
Goal setting also provides a space to ask yourself tough questions that can define your vision, and the process can help you see steps required to get there. Most young farmers come into the profession with a lot of passion and purpose, but you also need this big-picture view to help move your operation forward.
Sound financial planning leads to financial stability and success over time. When field work is limited after harvest, take time to create a winning financial plan, aligned with your crop plan for next year. Especially when margins are tight, this step will pay dividends.
As part of your overall financial plan, now is the time to commit your 2025 seed and crop nutrition/protection product purchases. In this case, the early bird does get the worm, and the reward for planning ahead on these expenses is putting yourself in the best cost position possible. The best terms, rates and incentives are available to those who register early.
Saving on these purchases will put money back in your pocket, which you can leverage in other, more productive ways. This might include saving for a down payment on a land purchase, upgrading technology and/or equipment to support yield increases, or establishing/enhancing your cash reserves for better contingency planning.
Finally, for younger growers, it’s important to master the basics when it comes to the business side of farming. If you aren’t already in the practice of reviewing your income statements and balance sheets, and tracking your breakeven point, the winter months are an ideal time to review those materials. This will help you access information from past seasons to build a more profitable plan for 2025.
Don’t go it alone when times are tough. Work with people who you trust, who have your best interests at heart, and who can help you stay optimistic about your prospects for success.
Take inventory of your skills, and recognize what areas of your business might benefit from a fresh point of view. Most growers are successful because they have a passion for growing a crop and working the land — but business management, accounting and financial planning are all equally important aspects of a successful operation, which can often benefit from outside perspective.
For example, financial experts can help you build a better understanding of your cash-flow needs and identify opportunities to align payment due dates with your marketing strategy, so you have flexibility to sell when it's financially advantageous and not simply because bills are due.
You also can get support establishing a capital management strategy, which can reveal better ways to use cash, financing offers and a bank operating line of credit.
Spending time on your goals and your finances and engaging with experts in your circle of influence will help you go into 2025 with more confidence in the prospects for raising a profitable crop and guaranteeing your financial success.
Howe is an area manager with Nutrien Financial and oversees operations across the Cornbelt, Western U.S. and Canada. He provides leadership and innovative solutions to help growers increase their buying power and maximize every opportunity for success. Learn more at NutrienFinancial.com.
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