This year has delivered many days of “foul weather”, but hopefully not the turkey type, unless it’s on your Thanksgiving table later this month. So far in 2016, we have seen over 36” of rain since April 1st. This is nearly 10” more than the annual average. Not only has Southern Minnesota been stressed by excessive amounts of rainfall, we are trudging through a very stressful time in the agricultural industry. Many farmers have been riding what has felt like a roller coaster this year. With planting, replanting, hail, resistant weeds, commodity pricing, and excess rain, it sure has been an eventful season. Even after all the storms, most of Minnesota is still left with what is being reported as a “record crop”, which is simply remarkable! As this farming season gets wrapped up, most producers are already looking ahead to the next one. The dinner table talk shifts from the old to the new, and producers start making some very important decisions which could impact their future. A few of the decisions being made this time of year are about seed selection and early pay discounts, the impact of fall fertilizer vs. spring fertilizer, grain marketing and carry options, and what seems to be the “Big One” this year – land rent negotiations. As the year comes to an end, there are many things that need to happen and it may seem like a stressful whirlwind. Producers and farm families alike all have times when they may feel hopeless and the numbers just don’t seem to work. This is where your networks and relationships are essential. Open communication with your input suppliers, your bankers, support systems, and friends will prove to be beneficial. Growing up on a small dairy farm, it seemed like my father was constantly working with his bankers and Farm Business Manager to figure out what decisions were best. I learned back then that having a strong network and relationships were very necessary, especially in the agricultural industry. These kinds of networks and relationships can also help discover efficiencies that could benefit your farm. With the technology and complexities in the industry, it’s hard to know everything and what could possibly be missing. Your neighbors, your friends, or someone in your network might have an idea how to help. Each farmer in Minnesota operates just a bit differently, but most have the same objective: to plant and harvest a plentiful crop along with feeding their families. This sounds simple enough, but it’s easier said than done, especially in recent years. Inflation in input pricing, decreases in commodity prices, as well as family living expectations are just a few of the things that complicate the simple objective. Although talking farming is usually a natural thing for most producers, there could be some uncomfortable conversations that will need to happen. There are a few things that producers and farm families can do ahead of time to prepare for the coming year and hopefully avoid some of those uncomfortable situations. Farm families need to talk about cost control, budgeting, and presenting a realistic cash flow projection for the coming year. What will it take financially to get the crop in the field and carry you through until the grain is sold? What are your goals throughout the year as a family and what will it take financially to achieve those goals. Are the goals even achievable under the current situations or will there need to be an adjustment to all expenses, including family living? Another focus point could be on your Working Capital position. Will you be able to meet all of your financial obligations for the coming year or do you need to restructure your debt? These are just a few of the questions that producers are most likely already thinking about. Calculate everything out on paper, see how it looks, and consider changes that might need to be made. Open communication with your banker this time of year is essential and could be a game changer.
By: Rose Wendinger, Asst. Vice President
Article published in the November 2016 issue of River Valley Woman magazine
