Cash Flow Planning Tools

Cash Flow Planning ToolsPutting together cash flow projections for farm clients can be tedious at times.  What is a reasonable feed expense for dairy operations?  Is the projected cost of production on corn acres in line with peers?  These are a few of the questions lenders and other professionals may ask when putting together projections, especially for new customers.  With that in mind, The Center for Farm Financial Management has put together two different cash flow planning tools.  The Minnesota Price and Cost Summary and the FINPACK Livestock Budget Estimates are two aides FINPACK users may find useful in cash flow planning.  These items and more are found in the FINPACK Knowledge Base.

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Farm Incomes Take Another Dip in 2017

Farm Income Takes a Dip in 2017

Minnesota farmers experienced their fifth consecutive year of low profitability in 2017. The median farm earned $28,551, down slightly from just over $36,000 in 2016.  Declines in farm income were largely driven by low profits and losses for cash crop farms, while livestock farms, in general, had a better year.  With average investment of over $2 million, farms earned a 2.2% return on investment. Across all farm types, almost one-third of farms lost net worth in 2017.

Those are among key findings in the annual farm income analysis conducted by University of Minnesota Extension and Minnesota State in collaboration with the FINPACK Team and the Center for Farm Financial Management (CFFM). The analysis used data from 2,164 participants in the Minnesota State Farm Business Management programs and 104 members of the Southwest Minnesota Farm Business Management Association. Participating producers represent approximately 10 percent of commercial farmers in Minnesota.  CFFM’s work with projects like this provide the benchmarking metrics used in FINPACK.  The full FINBIN report on MN Farm Finances can be accessed here[Read more…]

2018 National School for Experienced Ag Bankers

2018 National School for Experienced Ag BankersThe FINPACK team wants to alert you to an outstanding educational opportunity – the 2018 National School for Experienced Ag Bankers, being held June 25 – 29 at Black Hills State University in Spearfish, SD. CFFM has had a long relationship with this school, our staff is as part of the teaching team, along with a talented group of seasoned ag bankers.

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Why Do Accrual Adjustments Matter?

Why Accrual credit analysis, FINPACK AgricultureCash is king! Every business needs cash to meet its financial obligations. But how much cash a farm generates is not a very good indicator of how the business is performing.  One of the main reasons is cash basis taxation. The right to file taxes based on cash rather than accrual income gives farms tremendous flexibility to manage taxable income. The result is that very high performing farms and farms that are struggling financially often have similar bottom lines on their Schedule F’s. [Read more…]