Determining if your farm made money would be easier if you produced just one product. With just one product, say canola or broiler chickens, the total of the sales for the year minus the expenses would be the profit. However, most farmers have multiple enterprises — crops, livestock and sidelines — that all contribute revenue. […] Read more
Author Archives
Farm business decisions a continuum of priorities
Mixing family and farm business can be tricky
Family can be a wonderful thing. When I ask farm families to list what they value most, “family” usually makes the top three, if not the top. However, mixing family and business can be tricky. It can be a strength and a weakness. The strength is the support family can give individuals and the business […] Read more
Managing working capital key to successful operation
Cash is King, as the saying goes, and it is certainly true in farming. Working capital is the “cash” a farm has to finance its operations. It is usually thought of in terms of being the amount of money that the farm has available to finance operations for the next year. The calculation is, working […] Read more
Downsizing rarely desirable, but plan can improve outcome
There are farm management challenges that are just plain difficult to work through successfully. The challenges can be complex and involve several areas of management. One of the most difficult things I do in helping farm families pertains to downsizing. It is not that difficult on the face of it: give up rented land, sell […] Read more
An up-to-date will is important in succession planning
Procastination, preparation and planning: that was the title of the afternoon seminar on succession planning I just attended. The event, hosted by Manitoba Canola Growers, was well attended, but then there usually is pretty good attendance at an event focused on succession. There are lots of things that farm families have to think about and […] Read more
When is it time to go in a different direction?
Farm families should keep three things in alignment when managing the business: business direction, financial performance and management structure. This is nothing new because these functions have affected farms for decades. What is new is the importance of more proactively understanding them and monitoring their alignment as the farm moves through its business and personal […] Read more
Employees will tell you if you are a leader or a boss
This past year wasn’t an easy one for a lot of reasons. That’s the common theme in talking to farmers. Sure, some areas fared better than others, but many dealt with a long and drawn out harvest. The fact that there is still crop that hasn’t been harvested sums it up. A farm I had […] Read more
Analyzing margins of net profit can be eye-opening
There’s a saying that you can’t go broke making a profit. True enough — or is it? My September column looked at averages of financial performance. How many years out of 10 would you consider to be “winners” and how many would be “losers?” The remaining years are in the grey zone: not so good […] Read more
Restructuring debt for cash flow
Farming can be frustrating and at times unforgiving, especially when dealing with unfavourable weather. It becomes worse when the adverse weather, like too much rain during harvest, goes on and on. With higher input costs and lower commodity prices, it doesn’t take long before yield and quality loss begin to affect financial performance. Cash flow […] Read more
Determining past performance helps with future planning
When assessing plans for the future of your farm, it often helps to test them against past performance. Would a change in operation enhance your average performance? But what is average? A major league baseball player with a .300 or better batting average is considered to be achieving superior hitting performance. That’s a successful at-bat […] Read more
