Protecting margins requires a clear-eyed, warts-and-all look at your farm’s numbers. An honest evaluation of your financial statements will help you make better, more profitable decisions.
Are you looking for that one tool that can help you get the most of every dollar spent on your farm? Well, you won’t find it at the local equipment dealer or sitting in your yard, say two prairie farmers with side hustles as farm management specialists. They say that farmers who want to get serious about growing for profit can access this one tool every time they sit at their office desk or turn on their cellular phones. So, what is this amazing tool? It’s the information found on your farm financial statements.
Darren Bond grows wheat, canola, soybeans and oats near Winnipeg. He’s also a farm management specialist with Manitoba Agriculture. Rob Strilchuk is a CPA and partner with MNP’s Edmonton office and operates a grain farm east of the city. Both know that today’s producers are inundated with huge amounts of economic and geo-political news, much of it confusing and stress-inducing. That’s troublesome. It’s also a distraction and potential liability, say Bond and Strilchuk. They recommend producers absorb information from the larger world but make decisions based on their own farm’s cost of production, cash flow and ability to service debt.
“I am a big proponent of producers making decisions on the cost per bushel sold,” says Bond. He says that once you know your break-even price for a crop like canola, for example, you can start looking for markets that are above that.
Bond knows farmers who were seeding this spring when they got a text alert about a premium-priced canola market. Growers who knew their cost of production jumped on the deal. Those who took time to think about it or run the numbers one more time, lost out. The contract closed before they acted, says Bond.
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