Measuring the success of a farm is not limited to yields, prices

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Farming is a business, although it is also a way of life for many farmers.

The “off season” of winter meetings is a time to reflect, recharge, and look to the future. Many farmers enjoy the production side of farming, driving the tractor and being in the fields, barn or workshop. The planning, financial and business side of the job is equally important which someone on the farm has to do with the same zeal.

Measuring the success of an agricultural enterprise is not limited to knowing yields or prices. This involves managing cash flow, getting a line of credit, completing an income statement and balance sheet, and at this time of year, calculating taxes. Higher costs, inflation, interest rates and the supply chain situation mean lots of analysis to project expected income and expenses. 2022 will be a year of careful analytics that will inform the farmer on how to optimize a decision to rent, buy, sell, rent or other important cash flow decisions.

Careful analysis begins with writing a strategic business plan for the farm and the “big three” financial statements: income statement, balance sheet and cash flow statement. Fortunately, lenders need these statements to assess the farm’s potential profitability.

The University of Minnesota has an AgPlan which can be a great free, online tool for customizing a business plan. This plan has five business plan templates that can be created, saved, downloaded, printed, shared and edited by the farmer. Each template contains valuable tips and resources for each section of the business plan to help create the plan.

A farmer combines wheat in this field off Stewart Rd. in Raisinville Township.

New for 2022 is a crop insurance option for farmers considering getting rid of nitrogen. This new option is called the Post Application Coverage Rider (PACE) which is an additional coverage option to the underlying crop insurance policy for corn nitrogen applications during v3 growth stages. -v10. This option provides insurance if the sidedress request cannot be made. Payments will be based on approved yields, hedge share, hedge level and final loss factor. PACE is available to farmers in southeast Michigan, including Monroe, Wayne, Washtenaw and Lenawee counties.

MSU’s Christy Sprague and Kurt Steinke will be two of six speakers for MSU IPM’s “Agronomy Day” program February 8 in Milan. They will brief farmers on weed control strategies and fertility recommendations, in light of very limited supplies of herbicides and fertilizers. MSU’s 2022 Field Crop Weed Control Guide and an all-new 2022 Field Crop Insect Control Guide will be distributed to attendees. The deadline for registration is February 3. The cost is $35 and reservations can be made by calling 269-467-5511. The program will take place at the Immaculate Conception Parish Family Center, 21 Ann St., Milan 48160.

One of the hot topics at the Great Lakes Crops Summit this week was farming, hackers and ransomware. Some recommendations included:

  • Have data backup, including a 3-2-1 approach. This involved making three backups, two of which were on-site and the third completely off-site of the farming business.
  • Printing documents, such as a contact record and inventory. Printed documents take longer, but cannot be hacked and can save the business if all electronic data is lost.
  • Train all IT operators and include part of cybersecurity.
  • Communicate with employees, customers, or others about any hack and ransom demands. Designate a single person to do the communication so that a precise and careful message is transmitted.
  • Ask your insurance agent about a cyber insurance policy or endorsement.
  • Everyone needs antivirus software. There are military and civilian personnel in other countries whose only job is to hack into company computers and make financial demands.
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