What does it take to start farming successfully? Obvious answers include a land base, often rented; machinery; and enough collateral to borrow money and put out a crop. One ag lending association thought outside the box. Leaders within the organization decided beginning farmers also needed financial and farm management training to give them better odds of landing on their feet.

That’s what the Growing Forward program initiated by Farm Credit Mid-America is about. “Our goal is to give them farm-based financial training so that they are better equipped to make decisions and work with their lender,” says Dakota Everts, vice president and coordinator of the Growing Forward program.

Started in 2014, the program is for clients under 35 years old or those with fewer than 10 years of experience in farming, she says.

“Our team members identify people who would be good candidates, and we work with them,” Everts explains. “The first step is a two-day, intensive training program. We offer four of those around our four-state area each year. Every other year, we offer an advanced training session for those who want to dig deeper into financial management for the farm.”

Emphasize the basics

The big goal for the basic training workshop is to acquaint young farmers with three basic financial principles and introduce them to ratios and tools that measure how well they’re doing on each one, Everts says.

“We start with making sure they understand liquidity, which is having enough money and resources to operate in the short term,” she explains. “Next, we discuss solvency, which refers to being in a position to operate and pay bills and debts long term. We want them to understand the importance of an operation remaining solvent over time, and why that is critical for both the producer and lender.”

Finally, the training introduces the concept of debt coverage, Everts says. In simple terms, it’s a measure of profitability. Lenders want to see that your operation can cover debt service and have money left over to invest in the farm operation over the long haul.

“People come to us at all levels of understanding as it relates to working with financial tools,” Everts notes. “We take people where they are and move forward.”

What young farmers say

Kyle and Leah Musselman live in northern Miami County, Ind., with their two young children. They grow corn, soybeans and wheat; custom-finish 4,000 head of hogs at a time; operate a custom-farming operation; and manage a seed sales business. Though they are several years into their operation, they attended Farm Credit’s Growing Forward conference for beginning farmers for the first time this year.

“It was a good refresher course for us,” Kyle says. “We wish we had known about it several years ago. Some of it was review over things Leah and I learned through experience. But we learned new things as well.”

Both Kyle and Leah value the insight into the lending world they gained through the training. “I left with the impression that they really want customers to succeed,” Leah adds. “It also gave us more insight into what lenders look for in borrowers.

“When a lender goes to the effort to develop training to help us succeed, that says a lot about the lender.”