Preparing for the New Year in Agriculture

It’s That Time of Year

The beginning of a new year presents a great opportunity for producers to spend time financially preparing for the upcoming year. There are many decisions to make and deadlines to meet, which can all prove to be daunting at times. See below for five strategic planning methods that can be put in place to help guide financials decisions now and throughout the remainder of year. 

1. Prepare a Balance Sheet: The Balance Sheet report reflects an individual’s Assets, Liabilities, and Equity at any point in time. Assets reflect what an individual owns, Liabilities reflect what an individual owes, and Equity reflects the net worth of the individual. This reports looks at an individual’s whole financial picture and can be beneficial in tracking how the operation changes from year to year.

2. Create a Cash Flow: The cash flow report reflects the income and expenses a producer expects to incur in the coming year. Preparing this report can present a great opportunity to get a handle on input costs, talk with your local seed, chemical, or fertilizer representative, and take a look at how the futures market is looking for grain and livestock prices.

3. Breakeven Analysis: A breakeven analysis report provides a deeper dive into a producer’s cash flow by breaking income and expenses down to a per unit basis. This can be per acre, per head, or by various other applicable units. This report allows a producer to understand what a specific expense is costing them on a per unit basis, and can also help them understand what a profitable selling point is based on the operations expenses.

4. Marketing Strategy: A marketing strategy can also be a helpful tool to put in place. There are various ways this can be handled, whether that be through referring to your breakeven analysis metrics or visiting with a trusted Marketing Advisor.

5. Crop / Livestock Insurance: Another resource available to producers is crop or livestock insurance. There are many options available with this resource, so visiting with your local Agent and determining what is most suitable for your operation can be beneficial as well. The deadline for crop insurance sign up is March 15, 2024.

Success Bank offers both experienced loan officers and crop insurance agents to help you with your needs for 2024. Stop by or call today at (641) 664-2006 to setup a time to create your balance sheet, cash flow or obtain crop insurance quotes.