How To Survive The Changing Farm Financial Climate In 2014

How To Survive The Changing Farm Financial Climate In 2014

Iowa farmers are urged to attend upcoming ISU Extension meetings to learn how to cope with the pending financial squeeze.

An Iowa State University Extension and Outreach farm management team has developed two new programs to help producers manage changes now occurring in the financial climate of farming. By attending these upcoming sessions, farmers can learn how to protect their farm's financial bottom line during years of negative returns—such as 2014 is already shaping up to be.

TWO NEW PROGRAMS: ISU Extension has developed two new educational programs to help farmers manage changes occurring in the financial climate of farming. With crop prices already dropping lower and cost of production remaining high, profit margins have tightened and may disappear this year. By attending these meetings, you'll learn how to protect your farm business in years of negative returns. One program is a day-long look at the impact of changes to farm finances; the other program is a multi-session of financial literacy training.

"U.S. corn and soybean producers have enjoyed their best run of returns in history over the last seven years," notes ISU Extension program specialist Ann Johanns, who works with the farm management team. "But like most things that go up, crop prices and returns have declined as we are entering 2014 and they are likely to decline more in the near future." ISU Extension farm management specialists remind farmers that agricultural returns tend to be cyclical in nature, and a few years of good returns are followed by a few years of negative returns.

The ISU Extension farm management team of Kelvin Leibold, Tim Eggers, Kristen Schulte and Ann Johanns has developed the two programs to help producers manage adverse changes. One program is a day-long look at the impact of changes to farm finances; the other program is a multi-session financial literacy training. Program educators are Leibold, Eggers and Schulte.

"The USDA marketing year average for corn in 2012 was $6.89; predictions going forward are showing a price closer to $4.50," says Kelvin Leibold. "Soybeans show a similar story, going from $14.40 in 2012 to $12.15 per bushel. And are likely headed lower in 2014. Producers need to consider where their farming operation will stand financially when high prices leave."

Tim Eggers recommends farmers attend these programs to assess their farm's financial health. Likewise, agri-businesses should send their farmer-customers to these meetings so they can see how a financial analysis applies to their farming operation.

Deep Water or High Tide—this is a program where you attend for only one day

A one-day program. This financial management program where you attend for only one day will be offered at three locations in February in Iowa. Program participants will learn how changes in interest rates and other input costs affect their net farm income, and how to manage these changes.~~~PAGE_BREAK_HERE~~~

This program consists of a day engaged in the game of farm finances. Participants will gain a greater knowledge of a true-to-life financial picture by taking part in the case study simulation. Extension team leaders will guide participants as they work together through the basics of having a solid financial foundation.

At all sites for this program, the meeting begins at 9:30 a.m. and wrap-ups at 3:30 p.m. Registration is $25 at all locations. To register, contact the county extension office for the preferred location listed below.

Cresco, Northeast Iowa Community College—Monday, Feb. 24

Contact: Howard County Extension Office, 563-547-3001

Iowa Falls, ECC Agriculture & Renewable Energy Center—Tuesday, Feb. 25

Contact: Hardin County Extension Office, 641-648-4850

Shenandoah, Iowa Western Community College—Thursday, Feb. 27

Contact: Page County Extension Office, 712-542-5171

Moving Beyond the Basics—this is a multi-session program giving you an opportunity to learn even more about farm financial management

A multi-session program. If you choose this program, called Moving Beyond the Basics, you would attend for more than one day. This multi-session program focuses on financial literacy and takes learning to a deeper level. Moving Beyond the Basics is modeled after the nationwide Annie's Project for Farm and Ranch Women. "This program gives you the opportunity to evaluate record keeping systems and test-drive accounting software in a classroom setting," says ISU's Kristin Schulte. "Knowing the resources available for analyzing your financial position will make you better able to ride through the periods of low prices and decreased farm income."

Cass County Extension Office, Atlantic

Monday evenings; Jan. 27– Feb. 17; 6 - 9 p.m.

Contact: Kate Olsen at 712-243-1132 or Tim Eggers at 712-303-7781

Chickasaw County Extension Office, New Hampton

Tuesday evenings; Jan. 28 – Feb. 18; 6 - 9 p.m.

Contact: Danielle Day at 641-394-2174 or Kristen Schulte at 563-547-3001

Hardin County Extension Office, Iowa Falls

Wednesday evenings; March 5 – March 26; 6 - 9 p.m.

Contact: Kelvin Leibold at 641-648-4850

Deep Water or High Tide and Moving Beyond the Basics are being offered at various locations in Ohio and Iowa this winter. The programs have been developed through a grant from the North Central Risk Management Education Center and USDA's National Institute of Food and Agriculture. Visit the ISU Ag Decision Maker website for further details.

TAGS: Soybean USDA
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