“Evaluating your farm business and determining whether or not a change is desirable is an essential part of any farm management plan,” said Duffy. “The farm financial planning program helps farmers and farm families evaluate their situation. Some want to analyze their current operation as to its profitability, liquidity and risk bearing ability; others are looking at areas where improvements can be beneficial to their operation.”
ISU Extension farm management associates conduct the farm financial planning program in a one-on-one counseling setting using a computerized model to evaluate the changes. In addition to the analysis, they often provide referrals to other sources of information that might be available to the family. The program is currently funded by a grant from CF Industries which covers the time and travel of the associates running the analysis.
Ralph Mayer is one of the 12 Iowa farm management associates. “I begin by talking to the farmer, or farm family, to get a general idea what they are looking for from the analysis, as that will impact the information we need to run it.”
Mayer says that most frequently farmers want to evaluate a change to the operation – that might be renting an additional farm, buying a farm or changing a crop or livestock enterprise. At the conclusion of the conversation, Mayer asks the farmer to supply the basic information needed to run the analysis – financial and production information for the operation and information about any potential changes. “Having this information is extremely critical because the more detailed and accurate that information is, the more meaningful and useful the analysis will be.”
FINPAK, the computer analysis used by the program, provides in-depth information about the farm, evaluates it as it currently exists and gives information as to the financial impact that a change may have going forward. This “third party” point of view was exactly what Mary Clare and Anne Sweeney needed when they contacted ISU Extension for an analysis last winter.
The Sweeney sisters, fourth generation Dubuque County farmers, manage and work on the family farm with some help from their three brothers. “This computer assessment has helped us make better financial decisions, especially regarding our dilemma and uncertainty about whether to continue raising livestock or rent our entire farm,” said Mary Clare Sweeney in an email to Duffy. “The clear and concise printouts presented the financial ramifications of each of our options; we can now make much more realistic decisions.”
Sweeney was also impressed with the dedication of her farm associate, Charles Morine, when he traveled through bad weather and at a distance to conduct the program’s services. “Chuck explained the program very clearly and left no doubt in our minds as to the benefit of the analysis,” she continued. “He was able to answer related financial questions and direct us to other resources available in our area. We are very grateful for the help we received.”
To learn more about the program, visit the farm financial planning Web site www.extension.iastate.edu/farmanalysis.
Michael Duffy, Economics, 515-294-6160, firstname.lastname@example.org
Willy Klein, Extension Communications and External Relations, 515-294-0662, email@example.com