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Corn+Soybean Digest

When Farm Management Gets Tough

Some are calling in certified ag consultants Producers trying to determine the best future course for their farm businesses have a new source of assistance: the accredited agricultural consultant (AAC). That's a recent professional designation of the American Society of Farm Managers and Rural Appraisers (ASFMRA).

"We can counsel producers on business structure and operation, financial matters, transfer of the business from one generation to the next, and on human relations," points out Bill Holstine of Hertz Farm Management, Nevada, IA.

"A certified agricultural consultant can be an unbiased, unemotional source of business expertise," adds Fred Hepler of the Westchester Group, Champaign, IL. "This is especially important in these difficult economic times when emotion and fear can run high among family members."

Holstine (515-382-6596) and Hepler (217-352-6154) were among the first ASFMRA members to earn the AAC designation. Their counseling has covered a variety of situations.

"One of my consultations was with an operation that farmed 2,800 acres and fed sizable numbers of cattle and hogs," Holstine reports. "They wanted an outside opinion on where to expand - land, cattle or hogs. We used various projections to help them work through that question. In other cases we've worked with producers on long-term planning," says Holstine. "That includes a mission statement, setting of goals and a plan of action to achieve the goals."

Holstine also has worked with operations that were experiencing communication breakdowns among family members.

"This can be a problem when two or more families are involved in operation of the farm. It also can occur when some family members are away from the farm," he notes. "Not everybody has the same objectives or interests. They want an outside person with a knowledge of agriculture who can help them create a plan agreeable to all parties."

Holstine has consulted with producers going through divorce. "That really changes the alternatives," he says. "An unbiased outside party can minimize the damage."

Westchester's Hepler recently consulted with a three-generation family situation (irrigated corn and soybeans) looking for financial guidance. The father was ready to retire, the son and his wife were operating the business, and their son was considering coming in. The family was trying to decide whether to expand, maintain present size, reduce size or even to invest their assets outside of agriculture.

Their decision was complicated by a land buyer's offer of a premium for their ground.

"I made a user-friendly computer financial model that showed them the various alternatives and the likely results of each alternative," says Hepler. "The model was designed for their specific conditions. I set it up on their computer so they could then review the alternatives and make the decisions."

Hepler has worked with farmers on such questions as: - Should I sell assets and pay down debts during these tough times?

- Should I hire some services rather than buy the equipment myself?

- If I have extra cash, is this the time to expand?

"Some farmers, in trying to reduce costs, have asked whether they should become their own fertilizer and chemical dealers," Hepler reports. "They figure they can sell fertilizer and chemicals to a few neighbors at a modest markup in order to pay for the needed additional equipment. Their aim is not to make money from fertilizer and chemical sales, but to reduce costs on those major inputs."

The ag consultants also work with agribusinesses as they strive to make changes that keep them competitive.

The cost of a certified consultant's services varies with the individual's background and experience. But fees are similar to those of other professionals, such as accountants and attorneys.

For the names of accredited ag consultants in your area, call ASFMRA at 303-758-3513.

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