As farmers navigate their financial state and investment decisions, they often have numerous questions. Whether they are new to farming or transitioning into a farm, they face challenges in gathering the necessary information.
Katie Wantoch, UW-Extension Farm Management Outreach Specialist says the first step is to assess the historical performance of the farm. Farmers should consider what financial tools and also analysis methods are available to help them obtain the data they need.
“In the realm of farming and agriculture, there is a wealth of information available on the internet,” says Wantoch. “However, it can be overwhelming and not always tailored to specific farming needs. Thankfully, the Farm Financial Standards Council (FFSC) provides standards as well as benchmarks for farmers to compare themselves to.”
While lenders are familiar with these standards, farmers can also benefit from using them to assess their financial performance.
Accurate record-keeping is crucial for farm financials, especially when transitioning from one generation to another. Keeping track of various records, such as weather patterns and crop-specific expenses, is essential. However, the most critical aspect is maintaining precise financial records.
“Farmers should know their cost of production for each crop. This enables them to make informed decisions about marketing and profitability,” explains Wantoch. “By analyzing cost of production data over multiple years, farmers can determine which crops are generating profits and which may require transition.”
To empower farmers with the skills to manage their farm finances effectively, the Farm Pulse management course was developed. This comprehensive course educates farmers, managers, and ranchers on farm financial management principles. These include understanding financial statements, ratios, and historical farm performance. The course provides practical examples and guides farmers on how to analyze and interpret the numbers. Additionally, it helps farmers understand the information lenders require and empowering them to make informed credit decisions.
Wantoch says, “farmers seeking to work effectively with their lenders should prioritize understanding the credit they are requesting, why they need it, and the details of the loan documents they are signing. The farm pulse management course addresses these aspects. It provides farmers with the necessary information to engage in meaningful conversations with lenders.”
The course is designed for a wide range of individuals, including ag professionals, credit analysts, beginning farmers, and experienced farmers looking to enhance their financial management skills. The course offers a non-credit certificate upon completion. This certificate may be beneficial for reimbursement purposes or to demonstrate knowledge and commitment to financial management.
To sign up for the Farm Pulse management course or learn more about it, interested individuals can visit their website.
