Take time to know where current prosperity originated

Some farms have had a couple of tough years with weather not co-operating. For many, and for a second year in a row, average-type yields have been achieved with very little in the way of moisture. I think it is testament to advances in farmers’ abilities to grow a crop. But there are a different […] Read more

‘Theft of time’ can damage farm’s financial performance

I had an interesting discussion a couple of weeks ago with someone who works in a large not-for-profit organization. The management team in the organization had just finished working through a planning session. Part of the focus of the session was on roles, responsibilities, work plans and desired outcomes. It was pretty typical: who has […] Read more

Applying sound management practices during tough times helps ensure that financial challenges are as short-lived as possible.  |  Getty images

It’s important to get on top of financial difficulties early

When you’re a farmer, it doesn’t take long to slip into financial difficulty. Management decisions in the 1980s, 1990s and into the early 2000s — especially around debt — helped contribute to degrees of financial hardship. The problems were often compounded by factors outside a farmer’s control, including low commodity prices, high interest rates and […] Read more

Human resource management is now vital to successful farms.  |  Getty images

Leadership role increasingly important on today’s farms

There are aspects of managing farms today that didn’t appear on the radar screen in years past. One such aspect is human resource management. It wasn’t that long ago when the broader function of managing human resources on a farm did not warrant a lot of attention. This has changed. Even for more modest operations, […] Read more

Farm families are increasingly less comfortable with a six-month gap in their attention to business management.  |  File photo

Timing of focus on farm business management evolving

The landscape of farm business management continues to evolve and I think for the right reasons. Years past, it was extremely rare to have a July meeting with families about managing their businesses. There was a pattern of the work we did with farm families: November to mid-April — It was a busy time with […] Read more

Be aware of transition within transition for succession

When people talk about succession planning, they’re really talking about transitioning the ownership and management of the farm to the next generation. The transition of ownership will be to the next generation who will be actively farming and often, to siblings (or cousins) who aren’t … who own assets or shares but who won’t be […] Read more

Financial efficiency in multiple entity farm structures

The article I submitted last month discussed financial efficiency, which is defined as the ability of a farm business to use its resources (inputs) efficiently. There are three groupings of financial efficiency, in which expenses are categorized to yield margins and ratios: production expenses (fertilizer, chemical, seed, crop insurance, feed, veterinarian) operating expenses (fuel, repairs […] Read more

Measuring financial performance starts with budgeting

Analyzing and managing financial performance can be both simple and complex, depending on what you’re trying to understand about it. In it’s most simple terms, financial performance can be defined as sustained positive cash flow. Positive cash flow comes from the profit being generated by the farm business, and that’s where the complexity comes in. […] Read more

Gross margin efficiency benchmarks are important tool

Financial ratios can be useful tools to analyze farm business performance. A great example of this is gross margin efficiency. Expressed as a ratio, gross margin efficiency measures how efficiently a farm uses specific, productive inputs. To demonstrate, the calculation looks like this: gross margin divided by gross revenue equals gross margin ratio. Gross margin […] Read more

Make sure you are getting the best use out of your time

Here’s somewhat of a rhetorical question: what are you doing right now? And then a follow-on question: what should you be doing right now? The second question warrants some discussion. A farm business requires a considerable investment in capital — assets such as land, buildings, equipment, livestock and quota. However, an investment is also required […] Read more