Farmers Putting Pencil To Paper As We Look Back At One Year And Ahead To Another
Farmers Putting Pencil To Paper As We Look Back At One Year And Ahead To Another
January 05, 2022Steve Schwaller
(Lakefield, Mn.)– Area farmers are busy putting the pencil to paper as we look back on one year and look ahead to another. Jim Nesseth of Extended Ag Services it’s a good time for producers to be meeting with ag lenders. But before you do that, he says it’s important to put together a balance sheet first…
“It’s going to be important that you kind of get accounts receivable, you know that’s anybody that owes you some money that they wanted to pay after the first of the year. If you do have some accounts payable, listing those and the money owed to who, the dollar amount, and then there are a lot of pre-paid expenses occurred this year because of quite bit of income so make sure you list all that, both crops and livestock, and then get an accurate grain and livestock inventory. That will really help. And then I think it’s important to review your list of farm machinery. You know that always changes. Buildings and facilities and capital assets. Just make sure you’re up to date on that. And then I think one of the interesting things this year, Steve, will be if you added any land or long term assets, make sure you list them, but then you might want to adjust some asset values as necessary. I think you really want to work closely with your ag lender on that, but there’s no question land values, machinery values, they’ve all gone up and appreciated quite a bit this year and so I think it’s whatever you’re comfortable with and your lender is comfortable with is what you value that.”
Nesseth says it’s also important to include any other loans you might have, and to put together a preliminary budget for the upcoming year. He says that should include a cash flow analysis and a grain and livestock marketing plan…
“You know these markets are pretty crazy right now again and so, you know, there’s a chance to lock in some profits and but they may go higher. You’re just going to have to kind of do a little bit of time, I think, you know, to catch some of these good prices. The other thing you’ll want to provide to your lender is your planned crop and livestock production for the year.”
Nesseth says you should also include information on rented farm land, input costs and anticipated crop insurance coverage for the upcoming growing season.
