Harvest is a unique time of year. We’re bringing in the results of our entire previous year’s work and discovering exactly how all of our decisions played out. But it’s also the beginning of the 2019 crop year already – in terms of planning and preparation.
In the busy-ness of the season, we might not feel we have a clear handle on what the farm’s overall financial situation looks like. But that’s a key component to know going into the next crop year since decisions are already being made that will impact it. Getting this financial information pinned down must be a priority.
Often, a farmer will come to meet with our advisors and have a certain picture in their mind of what they think their farm’s financial scenario will look like. They might even have some anxiety around it or believe their situation isn’t favorable.
After digging further into the numbers with their advisors and discovering what their farm’s financial picture truly looks like, they often find some relief because they know the real situation. Even if things aren’t ideal, it can help to reduce anxiety simply by viewing and understanding the real scenario. Often, the reality isn’t nearly as bad as the farmer had thought or imagined.
The farmer and their advisors work to go deep into the numbers to uncover insight about what’s going on within the operation. This is key to find out what the financials are saying about what’s going on in the farm business – where things are going well and where some changes might help.
The next step to continue reducing anxiety and worry is creating clear plans using the farm’s actual numbers, plus getting good financial projections in place. Since decisions are already being made for the 2019 crop, the farm’s actual numbers and budgets can help light the way.
Knowing actual reality is key – and it must be done in a detailed way. It’s best not to simply repeat what was done last year or make a guess about how it will fit into your plans. Having detailed financial information to help when making decisions about the next crop year – and beyond – is always a smart choice.
Do you know what your farm’s numbers look like going into next year? Do you have a detailed, accrual-based financial analysis for 2019 crop year decision-making? How would that information help with decisions you’re currently making for 2019?
Working to reduce as much uncertainty as possible around the farm’s financial scenario for the next year is the farm leader’s job in the late fall and winter. It can be helpful to work on that with a trusted advisor, so you can make the best decisions possible for your business.
The opinions of the author are not necessarily those of Farm Futures or Farm Progress.