Reading Time: 4 minutes These are difficult days for farmers — but also a time to look at what you can do differently. “If you’re not a top performer, you’re likely not consistently profitable, you’re going to be susceptible to those market fluctuations, and you’re probably unable to consistently invest in your business,” said Connie Adam, associate partner at […] Read more
When times get tough, toughing it out may not be the answer
Some farmers are way more profitable than others — so do what they do, says farm finance expert
Are you prepared to deal with tougher times on your farm?
Know your current ratio, honestly estimate your gross revenue, and be ready to talk to your lender, says adviser
Reading Time: 3 minutes Managing your financial risk is a little like skinny-dipping — you’ve got to protect your assets, and that’s hard to do when you’re not covered. “When the tide goes out, everybody can see who’s swimming naked,” said MNP agricultural tax specialist Rob Strilchuk (quoting Warren Buffett). “We had a lot of good years, but when […] Read more
How a business plan helps get ‘cash flow rolling’
It’s easy to get sidetracked when starting a new venture so you need a plan to follow the money, says adviser
Reading Time: < 1 minute A written business plan is key to the long-term success of any business, especially a new venture. “Putting the plan to paper will show you how much startup cash you’ll need in order to generate income,” said new venture specialist Jan Warren. “If you don’t know the startup costs of your venture, you can easily […] Read more
Worried about federal tax changes? There’s an alternative, say experts
Federal Liberal bid to close ‘loopholes’ will increase taxes on most farm corporations, but there’s a way to avoid that hit
Reading Time: 3 minutes Proposed federal tax changes aimed at ‘income sprinkling’ and other tax reduction measures used by corporations — including those owned by farmers — have ignited a storm of controversy. But there are “a lot of other tax strategies” that farmers can use, say financial planning experts. In July, federal finance officials announced proposed changes to […] Read more
With interest rates on the rise, is it time to lock in?
Variable rates have been a winner for decades, but a fixed rate is an option worth considering
Reading Time: 2 minutes Is it time to lock into a fixed long-term mortgage? “Since 1975, the majority of the time the variable interest rate has been the better option and has saved producers money,” said provincial farm financial specialist Rick Dehod. However, the Bank of Canada recently increased its prime rate by a quarter of a percentage point […] Read more
Can your farm operation withstand ‘lean years?’
Debt-fuelled expansion during good times can put a farm at risk when times get tough
Reading Time: 2 minutes Solvency is one of the key measures when it comes to gauging financial management of a farm. “Financial risk can be broken down into three main financial management parameters — solvency, liquidity, and profitability,” said provincial farm finance specialist Rick Dehod. “Once the measure within each of these three financial parameters has been assessed, the […] Read more
Online tool gives snapshot of farm’s fiscal health
Analyzer uses eight numbers from the year-end balance sheet to quickly produce 11 key financial ratios linked to industry benchmarks
Reading Time: 2 minutes To help producers be aware of the ratios for their farm businesses, Alberta Agriculture and Forestry has a decision-making tool called the ABA Simple Farm Ratio Analyzer. Start with your year-end net worth statement (the balance sheet for 2016), which is also your opening net worth statement for 2017, said farm finance specialist Rick Dehod. […] Read more
Six habits of highly resilient farmers
In 2010 David Gray, a development officer with the Department of Agriculture and Food, Western Australia (DAFWA), did a small study of four farms that were consistently more profitable and better at dealing with climate change. He found six common characteristics within these resilient farms.
Farm debt at record highs — but top lender not worried
While FCC says most farmers can handle their debt load, financial expert Merle Good says some are ‘robbing Peter to pay Paul’
Reading Time: 4 minutes Farm debt has hit a record high, bringing back some unpleasant memories of the 1980s debt crisis. But we’re not there yet, said farm business expert Merle Good. “In 1980, we had huge inflation and huge interest rates,” said Good, a longtime tax specialist with the provincial government who now runs a private consulting business.[...]
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It’s time to slip back into the office and review cash flow
It’s a long time until harvest revenue flows, so you need to manage your cash wisely over the summer
Reading Time: 2 minutes Now that cattle are being put out to pasture and old-crop inventory is known, it’s important to review your cash flow projections and your marketing plans, says a provincial farm financial specialist. “Cash flow projections are critical, especially in the summer months,” said Rick Dehod. “There isn’t much revenue coming in until harvest, but the[...]
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