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Being ready is more than half the battle when it comes to these aspects.

Darren Frye, CEO

December 7, 2020

3 Min Read
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As farms continue to shift toward wrapping up the 2020 crop year and looking toward 2021, I believe it’s a good time for leaders to begin thinking about opportunities that could potentially come in the new year.

While it’s true that it’s impossible to predict exactly what those opportunities will be, it’s a smart idea to think and plan ahead in some of the areas where they might arise. That way, when a real-life opportunity presents itself, you’ll be more ready to evaluate it quickly and act when necessary.

Know your goals

The first step – before considering any of these potential opportunities – is knowing what your priorities and goals are for your operation in 2021 – and beyond. This means taking time to evaluate your farm’s current financial statements and meet with your lenders to get a snapshot of the operation’s financial status.

Then you can do some realistic planning for major capital projects as goals for 2021 and in the upcoming five years or so. What equipment will need to be replaced? Are there buildings in need of repairs or expansion? Will you need to add any on-farm storage in the coming years? Those are a few things to consider.

Three areas to watch

With goals for upcoming capital projects in mind, you can think about these three areas for potential opportunities as we move into 2021.

Related:Farm business planning: Tool for the times

  1. Land. This is always an area of potential opportunity for farms that want to grow, but it could become more feasible for some as operations review 2020 financials. Buying land or bidding for cash rent is something to be aware of as we move into 2021 if farm growth is part of your goals. You’ll need to be able to quickly determine whether a purchase price or cash rent bid is feasible for your operation. Having the right financial information about your farm business at the right time can make the difference between being able to seize a land opportunity – or miss out on the right piece of land altogether.

  2. Your business. When it comes to your farm operation, there can be opportunities – other than growth in terms of acres – to grow the business. It takes a willingness to learn and be on the lookout for things like unmet needs or problems that others are encountering – and being creative about how to create a way to solve those problems. If you are looking for alternative ways to grow your operation and add revenue, consider how you can offer solutions to other farms or consumers.

  3. Markets. The grain markets seem to be entering a whole new era of price volatility – and volatility can mean opportunity, if you have a plan and are ready to act. But constantly watching the market and trying to digest all the information that’s out there can be tough when you need to be spending most of your time paying attention to leading your operation. You can get a partner to prepare for opportunity in the 2021 market and beyond. Start by learning more about the marketing solutions our advisors can help you implement for your farm.

Related:3 traits for post-COVID farm business success

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

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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

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