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Cash Flow A Serious Issue for Farmers This Fall

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Hart Fledderjohann,

Yield monitors are not the only thing farmers are watching closely this harvest; their cash flow is also a big concern.  With yields coming in sharply lower in some cases, cash flow may be tight for many producers. Hart Fledderjohann, loan officer with Farm Credit Services, says his customers are concerned about when those crop insurance payments are going to be made, “Is it this year or is it going to be next year? They want to know if it will be in time to make payments on next year’s inputs.”  For livestock producers, it is making sure there is enough funds for the higher feed bills they are facing. He said he is recommending his customers meet with bank officials to review balance sheets.

 

He told HAT none of his customers are facing desperate circumstances, but his advice is to communicate with your lender and lock in production costs early so you know what your financial needs are for next year’s crop, “Make sure the working capital is there on your balance sheet, know where your cost of production is at,  and make sure you can make a profit with current grain prices.” He added, if you can lock in a profit, “You won’t go broke making a profit.”

 

The situation is much different for livestock producers. He advises producers and lenders will need to work closely to manage the sharp rise in feed costs that are occurring  for livestock producers, “What we have been advising is that livestock guys come in and talk with us and have their cost of production in line.” He said it is especially vital that livestock producers keep their lenders informed on what the situation is on the operation.

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More financial resources from Farm Credit Services can be found here.dl