Scott Parker, Regional Vice President

Scott Parker is regional vice president, Ohio for Farm Credit Mid-America.

More from this author: Summer Is Prime Time For Financial Planning

Farmers, Are You Planning for Mid-Season Growth?


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Mid-season means opportunities for growth—both on and off the field.

06.06.17    |    Planning
Financial planning usually takes place in December and January, after crops are sold and a year-end balance sheet can be reviewed. However, as the weeks go by, farmers know more and more about what their financial situation looks like including potential yield and market prices. For this reason, mid-season is an important time to reassess the original plan and pivot as needed to protect or bolster your bottom line.

A few growth strategies we encourage farmers to undertake during this time of year:

Revisit your marketing plan and don’t be afraid to take a profit. If you haven’t considered contracting 2017 crops, now is the time to look at your breakeven price for various yields and begin locking in a profit if possible. Don’t be afraid to sell at a profitable price, even if you think it may go higher. We experienced this firsthand last summer in our territory.

Around June, there was a drought scare in Ohio, and corn jumped to more than $4 per bushel. While my crop looked okay, it could have easily produced very low yields. I was hesitant to contract corn for delivery because I was unsure I’d have the bushels to fulfill that contract. But because I had crop insurance, I was guaranteed a certain bushel amount based on my annual production history. I could rely on this whether it was in the form of physical grain or a check from the insurance company to purchase bushels to fulfill the contracts.

Crop Insurance

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Understanding your crop insurance guarantees is essential, as well. And by meeting with your crop insurance specialist you can better understand the guaranteed bushel amount you’ll receive.

Identify ways to increase farm income, outside of harvesting crops. It’s important to know your annual cost of living, especially if your family’s main source of income is the farm. If your breakeven does not comfortably cover family living expenses, you need to find a long-term plan to fulfill that financial need.

Many farmers have a solid foundation of assets that can produce income outside of corn, beans and wheat. If your breakeven is tight, look for other income sources, such as renting an empty barn, custom harvesting or even getting an off-farm job. If your operation adequately covers your living expenses but your goal is to grow the operation, you will most likely need to take on more debt. Family living costs won’t disappear, so finding another source to replace those costs will help position your operation for future growth.

Finally, keep your partners and advisers updated throughout the summer. In these times of tight margins, it’s important to keep an open dialogue with your lender, marketing specialist, agronomist and any other advisers. Don’t be afraid to seek a second opinion or additional information from key resources that you trust. Don’t just stick to your January plan because it’s already complete. Revisiting the above strategies mid-season can set your operation up for stronger growth and long-term success.



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