It’s often difficult during the busy growing season for farmers to complete all the jobs on their to-do lists. Some office-related tasks, such as financial management, are easy to postpone. However, given narrow profit margins, market volatility and the impact of weather, it is increasingly important that farmers take time to work through a summer […] Read more
Stories by Terry Betker, PAg
Farmers must learn to calculate cost of production – Perspectives on Management
The idea of cost of production is certainly nothing new to farmers. However, given the price cycles of inventory and inputs recently, there seems to be increased interest about cost of production in the industry. Helping farmers gain a better understanding of what their cost of production is and how it should factor into management […] Read more
Business strategy drives decision making – Perspectives on Management
Two neighbouring farms with the same enterprise, size and weather will typically report different financial outcomes, one performing better than the other. The only variable is the difference in management decisions. If sustained, similar financial results for the farms will have short- and long-term implications. Short-term effects could include whether the farm can obtain money […] Read more
Business model process helps outline goals and strategy – Perspectives on Management
People can more easily relate to each other when they work in the same industry and share comparable experiences. Most businesses within the same industry tend to have similar business models. The business model spells out how a company makes money by specifying where it is positioned in the value chain. For years, modelling principles […] Read more
Credit availability for your farm: how secure is your capital? – Perspectives on Management
Farming is capital intensive, but managing cash flow can be a challenge, especially in sectors dominated by seasonal operations and irregular sales. Farm businesses typically use debt to finance a significant portion of their capital needs. However, concerns are rising as America’s credit crisis starts to affect other countries, including Canada. The issue was originally […] Read more
Who’s evaluating your management performance? – Perspectives on Management
When asked what they value about farming, many farmers say they like being their own boss. In the past, good production management was a crucial part of that role, but today being the boss means more than being an above average producer. A successful farm is now equally dependant on other management functions, such as […] Read more
How to assess counterparty risk – Perspectives on Management
Counterparty risk is the risk to each person in a deal that the other party will not live up to its contractual obligations. There are two types of counterparty risk. The risk of default where there is a question of whether payment will be received or the delivery will be made (default risk). The contract […] Read more
Risk management critical in modern farming – Perspectives on Management
Risk can be defined as an uncertain event that will have a positive or negative effect on business objectives. Most people are averse to risk because they see only the threatening side and ignore the potential opportunities. A basic assumption in business is that investment leads to profit and that there should be a positive […] Read more
Access to capital is changing for farmers – Perspectives on Management
Access to capital has never been a problem for farms with good track records. However, the way farms are capitalized and where that capital comes from may be changing. When asked recently to rank the top risks they think they will face in the next 18 months, leading farmers listed access to capital as fourth. […] Read more
