Do's and Don'ts When Facing Financial Difficulty

David Balbian, Area Dairy Specialist
Central New York Dairy and Field Crops

August 1, 2016

  • Complete a production and financial management analysis of your business for 2015. Determine strengths, but most importantly, areas for improvement with immediate response and improvement in cash flow.
  • Complete a profitability and cash flow projection/partial budget of the expected impacts of any changes made to improve the business.
  • Meet with your lender and share your financial management analysis and cash flow projections. Communicate with your lender often and provide periodic updates regarding your financial situation. 
  • Cash flow management is the key to surviving difficult economic times. Continually review and update cash projections and partial budgets.
  • Meet with suppliers to develop payment arrangements.
  • Effectively utilize farm produced feeds, especially forages.
  • Feed balanced rations, especially to early lactation cows.
  • Treat disease outbreaks, such as mastitis, before they become worse.
  • Be an astute purchaser of inputs.
  • Examine family living to see if expenses can be reduced.
  • Maintain a low inventory; cull unprofitable cows, buy feed as needed.
  • Sell nonessential capital items, including machinery and equipment that is not needed to operate the business. Also consider selling land not essential to the business, including possible timber sales. Remember to consult your tax preparer concerning tax liabilities of a sale.
  • Examine debt for possible benefits of restructuring, or alternative financing.
  • Perform tasks in a timely fashion, yet get enough rest. Sleep deprivation can interfere with performing task and judgment.
  • Consider off-farm work by all family members.
  • Communicate current financial situation often with management team/family members. Seek and welcome their suggestions and involve them in key financial decisions. 
  • Adopt new technologies only after careful study.
  • Monitor the financial health of those who purchase your farm products. They are also under severe financial pressure in this economic period.
  • Seek management advice and analysis assistance early from Cooperative Extension, consultants, FarmNet, and others.
  • Seek personal counseling and advice from close friends, clergy, FarmNet and others.

  • Make decisions that will make the problem worse in a week, month, or six months down the road. 
  • Continue the same practices because "I've always done it that way."
  • Neglect needed accounting tasks because there isn't time right now.
  • Use farm produced feeds so rapidly that they are used up without a replacement plan.
  • Reduce purchased feed just to save money.
  • Purchase products that promise to be a cure-all, unless you have hard data and experiences of others to confirm.
  • Make capital investments to reduce tax liability or because "it's a good buy."
  • Borrow money unless the profitability of the farm is reasonably expected to increase in order to provide for repayment. 
  • Neglect the details; cleaning and maintaining equipment, communicating with and managing labor, detecting heats, etc.
  • Use alcohol to excess. Alcohol and other drugs can make a tough situation seem worse.









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Cash Rent and Custom Harvest Survey

To date, there is limited information available about rental rates and fees for crop harvesting.  Farms can use this valuable information for their farm business planning to help improve decision making and profitability. 

The data that is collected, and the subsequent reports/findings/resources will be helpful for all of us to answer that call of "What's the average rental rate in my area?" and "How much do people charge to combine oats?"

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2. Connect with more local customers. In the past year the farm directory had 8,300 visits from New York consumers. Farm profiles get as many as 25 views per month from potential local customers. We also spotlight MeatSuite farms on social media and bring attention and purchases to farms through highlights and giveaways.

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Farmers can visit to create a free farm profile. You must list at least one product for your farm's profile to go live. You'll also have access to Cornell's free Meat Price Calculator, a helpful tool for pricing your meat to make a profit.

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