Did you know each American farmer feeds more than 144 people? Ag producers provide safe, abundant and affordable products to consumers across the globe.
In celebration of National Ag Day and Week, Busey provides financial tips to the next generation of farmers. Unlike established farmers, young and beginning farmers may need to learn the basics of creating business relationships and what goes into making financial decisions.
There are a number of challenges facing today’s young producers. We’re here to help navigate the financial ones,” says Dean Kyburz, Senior Vice President & Farm Manager for Busey Ag Services. “We want to make financial decisions easier so farmers can focus on the farm.”
When speaking to a banker, young and beginning farmers should keep the following in mind:
1. Sweat the small stuff Keeping accurate and detailed records encourages both short-term and long-term financial planning. Not only does it help you stay organized and make better management decisions, it makes it easier for your lender to assess your financial situation.
2. Develop a business and marketing plan. You will work smarter and improve your odds when you focus and organize your goals.
3. Evaluate your capital investments for profitability and payback. Keeping track of how long it will take to generate enough cash flows from a capital investment to justify the investment will help you make better financial decisions for the future.
4. Know your costs. When you consider your cost of living and expenditures, including depreciation and family living, you’ll have a better understanding of your overall financial situation. Your local banker can provide guidelines to monitor your financial ratios.
5. Decide on what type of operation you want to run. New farmers should either be very efficient, low-cost producers or should add value that someone else will pay for.
6. Consider supplementing your operation with off-farm income until your operation is large enough to employ you profitably full-time.
7. Think about renting farm equipment or custom hiring instead of purchasing.
8. Shop around. Getting price quotes on supplies such as feed, fertilizer and fuel can uncover lower cost sources. Your research might get you a discount from a local, preferred supplier that gives excellent service. Make sure product quality is part of your evaluation.
9. Ask your banker about how to get access to state and federal credit enhancement programs. Some banks also offer special benefits for first-time schedule F tax filers.
10. When in doubt, ask for help and guidance from someone you trust—an experienced farmer, a trusted adviser or your local banker. You don’t have to make these important financial decisions alone.
At Busey, our experienced professionals can help manage the unique challenges you face whether you need a loan for production expenses or to purchase land and equipment. For the resources you need to maximize your efforts, call us today at 1.800.67Busey.
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