Your Profit

Agriculture.com Staff 03/17/2009 @ 12:56pm

The problems on Wall Street have spilled over to main street, and farm-related businesses and farmers are not immune to the global recession.

This recession has dropped the value of U.S. publicly traded stock values by over $7 trillion dollars and wiped out over $2 trillion in home real estate values. Right now, so much of what we read about in the financial markets is difficult to comprehend.

We are going through unprecedented turmoil in the global stock and commodity markets. I have had customers get hit financially by the problems on Wall Street, and odds are your interest bills will be higher in the future as the market prices in more risk on all business and real estate loans.

In the business of farming, you cannot control this market turbulence. However, you can change the way you manage your grain marketing and financial decisions to reduce risk. Following are seven steps I suggest you take to bulletproof your farm.

The problems on Wall Street have spilled over to main street, and farm-related businesses and farmers are not immune to the global recession.

  1. Assess where you are each week
    You probably dread the annual review at the bank where you go through your cash flow and show your operating profit (or loss). If all has gone well, you decide how much debt to pay off or if you should purchase some new equipment in the next year. With the corn market changing by 70¢ per bushel per week and the soybean market swinging in a $2.00 price range each month, once a year is not enough! For your own piece of mind, get your finances set up on a spreadsheet and look where you are each week.

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