Risk Management Through Record Keeping
Keeping record of your expenses, income and financial goals as a risk management practice has become increasingly important over the past decade, as the margin on many commodities and farm products continues to shrink. Keeping written documentation on your cost of production, taxes, and cash flows can help Landmark and Verity Business Solutions come up with a farm plan for your operation which can maximize your farm income.
Cost of production is a very important figure, which accounts for the cost of inputs for your crop. Things such as seed, fertilizer, labor, machinery time, and chemicals should be considered. Having an accurate cost of production can be a time-consuming process but it is a priceless tool in knowing how much you need to sell your crop for. Without knowing your cost of production, it can be difficult for loan officers to know your repayment capabilities or your grain marketing specialist to know what price you need for your crop.
Keeping hard copies of yearly financial documents such as your balance sheet, taxes, estimated cash flows, and income statements are priceless when working with an agricultural lender. Having accurate and up-to-date financials allows your loan officer to maximize your operating line of credit and complete your loan application process quickly.
Winter is the perfect time to get your financials in order before planting and growing seasons are here. Having your information ready now will allow you to more easily work with the Landmark and Verity teams on operating lines of credit, crop input pricing and eventually the sale of your grain. Our cooperative is here to help you maximize the potential of your operation and help you accomplish your financial goals.