Cashflow Planning and creating projections for farm clients can be tedious.
How do I create the best cashflow planning for my farm clients?
What is a reasonable feed expense for dairy operations?
Is the projected cost of production on corn acres in line with peers?
These are just a couple of the questions lenders and other professionals may ask when creating projections, especially for new customers.
The FINPACK Team and the Center for Farm Financial Management have put together some cash flow planning resources. Here are three aides FINPACK users may find useful in cash flow planning:
Minnesota Price and Cost Summary
FINPACK Livestock Budget Estimates
These items and more are found in the FINPACK Knowledge Base.
Minnesota Price and Cost Summary
This document includes prices received last year and over the last three years for major crop and livestock enterprises. Also included is the cost of production for each commodity last year and over the last three years. These prices and costs are suggested as guides for planning based on historical costs and returns for Minnesota farms* included in the FINBIN Farm Financial Database.
FINPACK Livestock Budget Estimates
These budgets are intended to provide guidelines for developing FINPACK livestock plans. They are based on actual costs and returns of Minnesota farm producers* included in the FINBIN Farm Financial database in 2020. If available, farms are sorted into low/medium/high profit groups to show the range of results. The revenues included in these budgets are based on actual revenues for 2020. Be sure to consider any needed adjustments for future prices.
FINPACK Labor Hour Estimates
Labor hours in the budgets are used in FINPACK for long-range planning (FINLRB) and for monthly cash flow projections with budgets (FINFLO). Labor hours are used in long-range planning (FINLRB) to compare the labor requirements of alternative plans. Monthly cash flow projections with budgets (FINFLO) use labor hours with the cost of production calculations. Here, labor hours from the budgets are used as the default for allocating related operating expenses to the particular crop and livestock enterprises in the plan. This approach streamlines data entry in the FINFLO plan.
Summary
These resources can help with cashflow planning in FINPACK. FINBIN was utilized to prepare these resources and can be used to look at other crop or livestock enterprises as needed for cash flow planning. These and other timely resources are found in the FINPACK Knowledge Base.
* Farms included in both of these tools participate in the MN State Farm Business Management program or the University of Minnesota's Southwest Minnesota Farm Business Management Association. No attempt was made to predict future costs or prices; these are actual costs and returns reported for 2020 for these farms.
Pauline Van Nurden is currently the Associate Director for the FINPACK Team. She has been with the team since 2017 as an Economist.
Prior to joining the FINPACK Team, she worked as a lender. This provides her valuable industry experience and knowledge in her work with FINPACK. Pauline holds a Master’s Degree in Agricultural Education and Bachelor’s Degree in Applied Economics, both from the University of Minnesota.