Financial management for farm families is unique. Farm income can be irregular and unpredictable. Bills must be paid, livestock fed and crops tended to. Taking care of a family’s needs can bring added stress.
To help farm families cope with problems in these situations, Iowa State University Extension offers Farm Financial Planning, a program providing one-on-one financial support and advice to farmers. The Farm Financial Planning program was initiated in the 1980s in response to the farm crisis. It continues to be available to give Iowans confidence with stressful issues, legal questions and financial concerns.
The program includes a computerized analysis of the farm business using FINPACK software from the Center for Farm Financial Management. FINPACK gives information to make more informed and profitable decisions for the future of a farm business.
Farm Financial Planning is intended for farm families who want a more complete picture of their farm financial situation. It helps take the guesswork out of whether or not a change would increase profitability and improve cash flow. A FINPACK analysis may provide a more in-depth evaluation of the farm business, which many lenders are requiring before they will extend further credit.
Farm Financial Planning helps you evaluate your farm business and determine whether or not a change is desirable. It provides an in-depth plan for the farmer, and the lender can make decisions for the future. The computer analysis looks at profitability, liquidity, solvency and risk-bearing ability. This information is provided for three or more alternative plans at a time. Examples of alternative plans could be addition, expansion or phasing out of a livestock operation, or buying, selling or renting land.
Service available free from Extension
Farm Financial Planning can also help evaluate ways to correct negative cash flow and profitability problems. A trained ISU Extension associate meets with the family to get farm records and discuss results of the FINPACK analysis in confidence and possible effects if changes are made. He or she may introduce other farm and family financial materials or information about outside sources for further help.
The service is available at no charge and is funded by the Agricultural Credit School, a program of ISU Extension and the Iowa Bankers Association. Farm financial associates are part-time ISU Extension employees trained in farm budgeting and financial analysis. They have ag backgrounds and understand farming and its challenges.
For questions and information regarding the Farm Financial Planning program, contact your local ISU Extension farm management specialist. Or contact the Beginning Farmer Center at 877-232-1999.
Another source for Iowans in need of answers to legal, financial, stress, or crisis and disaster questions is available through the Iowa Concern Hotline; call 800-447-1985.
Source: Iowa State University