2019 FINPACK Lenders Conference

2019 FINPACK Lenders Conference in Minneapolis, MN - December 11 and 12, 2019

Registration is now open for the 2019 FINPACK Lenders Conference. The conference will take place at the Radisson Blu Mall of America in Bloomington, MN on December 11 and 12, 2019. Cost is $345 per person. Pre-registration is required by November 29, 2019.

To register, go to z.umn.edu/2019FPLendersConf

or

Register Now

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Prevented Plant Cash Flow Projections

Challenging production years lead to abnormally high levels of prevented plant acres.  When this occurs, many revisit cash flow projections completed earlier in the year to consider the impact of prevented plant acres, including the addition of cover crop plantings.  The following provides recommendations and considerations when working through cash flow projection updates for prevented plantings.

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Mid-Year Monitoring

Cash Flow Monitoring WorksheetSomehow, we are already halfway through the year.  Periodic monitoring of projections that worked earlier this year may prevent surprises or problems later.  Now is a great time to use the cash flow monitoring worksheet to review how the monthly cash flow projection you completed compares to what has actually happened.  This tool is available for both of the monthly projection versions, with or without budgets.  Generating the cash flow monitoring worksheet is done in the cash flow plan that you wish to monitor.  Using this feature allows for timely monitoring of customer progress during the year.  And, if needed, adjustments to the cash flow plan can be made based on the actual data received.   [Read more…]

Recent FINPACK Update Features

New FINPACK Features 2019

By:  Kevin Hamilton and Taylor Engquist

FINPACK version 5.10.6 was recently released. New features included in the update are the ability to import or export balance sheet details and a financial scorecard addition to cash flow projections (FINFLO). These features have been added at the request of our users and we hope will be useful to all. Let’s take a closer look at these new features.

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MN Crop Land Rental Rates Continue Downward Trend

Over the last five years, the average land rental rates across Minnesota have declined by twelve percent. This includes a one year decline from 2017 to 2018 of 1.6%. This information is based on weighted average data from the FINBIN farm financial database. The Cropland Rental Rates publication has recently been updated and includes detailed information for each Minnesota county over the last five years.

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Save the Date: 2019 FINPACK Lender’s Conference

We are excited to announce that the 2019 FINPACK Lender’s Conference will be held on December 11 and 12 at the Radisson Blu Mall of America in Bloomington, Minnesota.

Details

Visit the conference website for details, registration information, and a full agenda closer to the event. Registration will be available starting Aug. 1.

Dr. David Kohl will be back, along with a full lineup of speakers including an overview of this year’s FINPACK update. We look forward to seeing you there!

The Impact of 5%

Each year as you work with customers you encourage them to set goals.  Undoubtedly, some of these goals revolve around financial management.  Within your credit analysis review, you are looking at the past financial performance of the individual farm or business operation.  In this process, you likely look at their individual trend performance and may also benchmark this against their peers.  Hopefully, the customer has also taken the time to evaluate their financial position and talks to you as their lender about the business goals they’ve set.  These may be things like, “Reduce fertilizer costs”, “Improve marketing”, “Improve yields”, “Improve profit margins”, etc. 

Have you ever considered with your customers the impact these relatively small changes actually have on the business?  I suggest challenging businesses to work to improve their margin management by 5%.  It may seem like a simple task, improving gross income and decreasing operating expenses by 5%.  But, this 5% improvement can have a significant impact on a business in any given year.  And then, think of the impact over the customer’s career!

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Dairy Revenue Protection as a strategy to stabilize dairy revenue

Dairy Margin Coverage

Dairy Revenue Protection (RP) is a new tool available to dairy producers which can be used in conjunction with the Dairy Margin Coverage (DMC) program.  RP provides protection against an unexpected decline in revenue (price and/or yield) on the milk produced from dairy cows on a quarterly basis. There are five choices a farmer must decide on when enrolling in Dairy RP: 1) method to value milk (class or component), 2) Amount of quarterly milk to cover, 3) Coverage level for revenue guarantee, 4) Protection Factor, and 5) which quarterly contracts to purchase.

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Credit Decision Scorecards

Every now and again there’s a FINPACK tool available we, the FINPACK Team, suspect is underutilized.  That may be because it doesn’t fit the bank’s analysis needs or maybe it’s because the tool is out of sight and out of mind (and if only given a chance, users would fall in love with it). We feel the latter may be true for Credit Decision Scorecards available in the Credit Analysis section of the FINPACK file navigator.

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2018 FINBIN Report on MN Farm Finances

Minnesota farmers continued to struggle with low prices and low profitability. Median net income was $26,055 in 2018, down 8%. After adjusting for inflation, Minnesota farms earned the lowest median farm income of the 23 years included in FINBIN. The economic pain was widespread; median incomes were $31,000 or lower for all of Minnesota’s major commodity farms; crop, dairy, pork and beef producers. Not every operation struggled though. Across all farms, the farms earning the highest net incomes, those in the top 20%, earned an average of $184,000. Those in the lower 20% lost almost ($72,000).  View the 2018 FINBIN Report on Minnesota Farm Finances to learn more about the financial health of the state’s agriculture industry.

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