Knowing your numbers is key to achieving and maintaining the profitability of any farm operation. Whether you’re struggling to make ends meet, or simply looking to improve or do something differently, Iowa State University Extension has an experienced group of farm business associates and specialists who can help.

The Farm Financial Planning Program with ISU Extension offers producers one-on-one financial counseling, a computerized analysis of the farm business, and referrals to other Extension programs and outside services that may be useful.

Mark Olsen, one of six trained associates who help administer the program across the state, says more than half of the referrals he gets are farmers who are struggling financially, especially in this time of tight profit margins. Olsen, who covers the northwest region of Iowa, also helps farmers who just want to get a better financial picture of their farm or are maybe looking to expand their farming operation, or perhaps downsize for retirement.

Take guesswork out of decisions

Whatever the situation, Olsen and the other associates try to meet clients where they’re at: oftentimes at the kitchen table. “What I have them do is put together some financial paperwork, a balance sheet as current as they can have one, and we also take a look at taxes and recent tax filings,” Olsen says.

The associates help farmers take an in-depth look at where they’re at, where they want to be in the future, and what they need to do to get there. Sometimes the answers aren’t easy and require another person to help uncover solutions.

“A lot of times, we’re talking about alternative scenarios in an existing farming operation, adding or subtracting animals or crops, or whatever it may be,” Olsen says. “The goal is to find the ‘money makers’ and the ‘money takers’ in the farming operation.”

Charles Brown, ISU Extension farm management specialist in southeast Iowa, says one of the tools he and his colleagues offer is a FINPACK analysis, a program developed by the University of Minnesota, and widely recognized by farm managers and ag lenders. Through FINPACK, the ISU associates can provide farmers with a realistic, comprehensive look at their overall farm business, including such things as profitability, liquidity, solvency and risk-bearing ability.

Lenders requiring in-depth analysis

Brown has been using FINPACK personally since 1984, and for the past six years through his position in ISU Extension, working with and advising farmers. He says the important thing is for farmers to start early with the analysis of their farming operation, so they have time to put a financial plan in place and make changes. “It usually isn’t just one big thing they need to do that’s going to fix everything on a farm,” Brown notes. “It’s lots of little things.”

ISU’s Farm Financial Planning program is for anyone who wants to understand a complete picture of their farm financial situation. “It helps take the guesswork out of whether or not a change would increase profitability and improve your cash flow,” Brown says. “A FINPACK analysis may provide a more in-depth evaluation of the farm business, which many lenders are now requiring before they will extend further credit.”

Better financial planning helps

Olsen and Brown both say they enjoy helping farmers save their farming operations, but even more so, just helping their farming clients be successful is rewarding. “What I enjoy is when I can get a financial plan together for a client and a lot of the stress comes off of them, and they find that they can continue farming,” Olsen says.

Farmers can locate an ISU Farm Financial Planning Program associate in their area by contacting their ISU Extension and Outreach county office, or by visiting the Ag Decision Maker website or the Farm Financial Planning Program website. Olsen can be reached at 712-660-1597 or [email protected]. Brown can be reached at 641-673-5841 or [email protected].

Source: ISU, which is responsible for information provided and is wholly owned by the source. Informa Business Media and its subsidiaries aren’t responsible for any content in this information asset.