Do’s
- Complete a production and financial management analysis of your business for 2019. Determine strengths, but most importantly, areas for improvement that result in an immediate response and improvement in cash
- Complete a profitability and cash flow
- Partial budget of the expected impacts of any changes made to improve the
- Whole farm budgets of expected cash inflows and outflows along with
- Meet with your lender and share your financial management analysis and cash flow projections.Communicate with your lender often and provide periodic updates regarding your financial
- Continually review and update cash projections and partial Cash flow management is the key to surviving difficult economic times.
- If you have past due balances, meet with suppliers to develop payment
- Effectively utilize farm produced feeds, especially
- Test all farm-grown forages and feed for nutrient availability. Evaluate the most cost effective commodities to purchase when feeding balanced rations, especially to early lactation cows. Focus on the goal of minimizing loss, not minimizing
- Treat disease outbreaks, such as mastitis, before they become
- Be an astute purchaser of inputs. Check more than once source for
- Examine family living to see if expenses can be
- Maintain minimal inventory; cull unprofitable cows, buy feed as needed. If you have extra dairy replacements, consider selling them. When selling animals, remember to consult your tax preparer concerning associated tax
- Sell nonessential capital items, including machinery and equipment; that is not needed to operate the business. Consider selling land not essential to the business, including timber. Remember to consult your tax preparer concerning tax liabilities of a sale and your lender for any restrictions associated with selling
- Examine debt for possible benefits of restructuring or alternative
- Perform tasks in a timely fashion, yet get enough Sleep deprivation can interfere with task performance and judgement.
- Consider off-farm work by all family
- Communicate current financial situation often with management and team/family members. Seek and welcome their suggestions and involve them in key financial
- Forward contract inputs such as feed, fuel, and other supplies if you can lock in a profit.
- Monitor the financial health of those who purchase your farm They may also be under severe financial pressure in this economic period.
- Seek management advice and analysis assistance early from Cooperative Extension, consultants, FarmNet, and
- Seek personal counseling and advice from close friends, clergy, FarmNet, medical professionals, and
- Routinely test manure for nutrient content. Employ modern soil testing technology to minimize purchased crop
- Evaluate risk management tools such as crop insurance, dairy margin coverage, and dairy revenue protection insurance in order to minimize production and price
- Evaluate business arrangements with other farms that have potential to reduce
- Adopt new technologies, such as variable rate seeding, only after careful study for impact on costs and
- Obtain price quotes from multiple suppliers for inputs such as feed, fuel, and other
Don’ts
- Make decisions that will cause the problem to be worse in a week, month, or year down the road.
- Continue the same practices simply because you’ve always done it that
- Neglect needed accounting tasks because there isn’t time right
- Utilize farm produced feeds so rapidly that they are used up without a replacement
- Reduce purchased feed just to save
- Purchase products that promise to be a cure-all, unless you have hard data and experiences of others to
- Make capital investments to reduce tax liability or because “it is a good ”
- Borrow money unless the cash income to the farm is reasonably expected to increase in order to provide for
- Neglect the details; cleaning and maintaining equipment, communicating with and managing labor, detecting heats,
- Use alcohol to excess. Alcohol and other drugs can make a tough situation even
- Assume a management strategy that worked for one farm will be effective on yours.
Source: Cornell
