While there is much information surrounding COVID-19 with regard to mental and physical health, one University of Missouri agriculture economist says there is a need to look at the financial health of agriculture operations.
Focus on what you can control, advises Joe Horner, MU ag economist. He offers a few simple tips that may provide direction when analyzing farm finances:
Preserve cash to meet cash flow needs. Apply for unemployment if need be. Know your options if an off-farm worker carrying the family’s health care plan is laid off. Know your credit lines. You may need them.
Add liquidity. Survive to thrive later. Use the Small Business Administration’s Paycheck Protection Program, available through your lender. PPP is open to farmers, and the application is simple. Funding is limited, so do not wait until it is too late.
Anticipate markets chaos. Processing plants may shut down temporarily to sanitize if workers test positive for the virus. Stay flexible on market timing.
Succession planning. Make sure your business can run without you. Do the legal paperwork to make clear who is second in charge to write checks, sign papers and make decisions.
Financial programs available
Rob Russell, MU Extension labor and workforce development director, recommends reviewing these programs that may help businesses and workers during these challenging times:
Paycheck Protection Program. This program is a loan for up to two times the average monthly payroll costs from the past year, plus 25% for additional expenses. These loans cover payroll expenses for eight weeks after the receipt of the loan, as well as select additional expenses. This loan is available through private lenders and can be forgiven under certain conditions.
Economic Injury Disaster Loans. These are open to small agribusinesses but not farms. These loans are available through the SBA.
Unemployment insurance. The waiting period for traditional unemployment benefits is waived. Workers who previously did not qualify for unemployment, such as independent contractors and self-employed people, may qualify for relief under the Pandemic Unemployment Assistance program. People who are out of work because of the pandemic will need to apply for benefits to determine their eligibility.
Care for your farm
Now, more than ever, farmers and agribusiness people need to protect their personal health to ensure the financial health of their operations, Horner says.
He recommends maintaining a physical separation of at least 6 feet to prevent the spread of the coronavirus on the farm. Divide workers and family members into teams that do not mix.
Also, keep what Horner calls a “closed herd” of people on the farm. Discourage on-site visitors and deliveries. Minimize face-to-face meetings. Disinfect shared areas and equipment.
Statistics show fewer cases of coronavirus in rural Missouri than in urban areas currently. However, farmers should assume that it could strike their operation either directly or indirectly. “Plan for sickness and expect disruptions,” Horner says.