Can Your Farm's Finances Weather A Storm?

Can Your Farm's Finances Weather A Storm?

Pay extra attention to managing your farm's finances during the changing financial climate in 2014.

U.S. corn and soybean producers have enjoyed their best run of returns in history over the last seven years. But like most things that go up, crop prices and returns are likely to decline in the near future. Iowa State University Extension and Outreach farm management specialists remind producers 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.

TOUGHER CHALLENGES AHEAD: An ISU Extension farm management team has developed two educational programs to help producers manage changes in the financial climate of farming. Attending these sessions, you'll learn how to protect your farm's financial bottom line during years of negative returns. One of the new farm financial management programs is called "Deep Water or High Tide" and the other is "Moving Beyond the Basics."

The ISU Extension and Outreach farm management team of Kelvin Leibold, Tim Eggers, Kristen Schulte and Ann Johanns has developed two programs to help producers manage changes in financial climate and learn how to protect their financial bottom line during 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 financial literacy training. Program educators are Leibold, Eggers and Schulte.

Get set for tougher challenges beginning in 2014, especially in corn and soybean production

"The USDA marketing year average for corn in 2012 was $6.89; predictions going forward are showing a price closer to $4.50 or lower," says Kelvin Leibold. "Soybeans show a similar story, going from $14.40 in 2012 to $12.15 and perhaps lower. Producers need to consider where they will be when high prices leave—the next several years certainly don't look as profitable as the last several have been. Grain supplies are up, corn and bean prices are down, and production costs have remained high."

Tim Eggers recommends producers attend these programs to assess their financial health, and he says agri-businesses should encourage their farmer-customers to attend the meetings so farmers can see how a financial analysis applies to their farming operation.

Deep Water or High Tide: This financial program will be offered at three locations in February. Program participants will learn how changes to interest rates and other input costs affect their net farm income, and how to manage these changes.~~~PAGE_BREAK_HERE~~~

The 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 a case study simulation. Extension team leaders will guide participants as they work together through the basics of having a solid financial foundation.

All sites begin at 9:30 a.m. and wrap-up 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 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 will give women the opportunity to evaluate record keeping systems and test-drive accounting software in a classroom setting," said Kristin Schulte. "Knowing the resources available for analyzing your financial position will make you better able to ride periods of low prices and 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 and have been developed through a grant from the North Central Risk Management Education Center and USDA National Institute of Food and Agriculture. Visit the Ag Decision Maker website for further details.

TAGS: Soybean USDA
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