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How to Plan Financially for a Successful Growing Season

This article first appeared in Lancaster Farming and Delmarva Farmer print newspapers. Be sure to look for it in your print copy!

The days are getting longer and the weather will soon be warmer, allowing farmers along the East Coast to begin spring planting. As the cold temperatures taper off over the next few weeks, we encourage you to take a look at your operation’s finances. Once planting starts, you won’t have much time to worry about your balance sheets, budget, or contracts.

1. Know where your finances stand.

Knowing where you stand financially can be the key to making profitable decisions. One of the most important ways to know where your finances stand is to balance your books and update your balance sheet. You will specifically want to take a look at your assets (what you own) and your liabilities (what you owe).

2. Update your budget and business plan every year.

Updating your budget and business plan each year will help you avoid any surprises in the future. Many farmers only look at variable expenses when budgeting, but often more than half of your expenses are fixed. If you choose to grow new crops or buy new equipment, your input and output costs will change and need to be reflected in these documents each year.

3. Seek outside resources to help make your business plan as complete as possible.

A good business plan has long and short term goals, detailed financial records, and production projections. County and State Extension programs provide valuable resources to help you predict your production rates. We recommend also talking with your insurance provider annually to make sure you have the correct amount of coverage in your policy.

4. Think about your risk and make a plan of action.

Many farmers are adding crop insurance to their budget as a risk management tool. It’s hard to predict when the next flood, storm, or hail damage will occur, so it’s better to be protected. You may also want to consider opening an operating line of credit. Interest rates on operating lines of credit are lower than credit cards and make unexpected emergency purchases smooth transactions.

5. Keep your relationship with your lender open and transparent.

Meeting with your loan officer and accountant each year is another step to better securing your finances. Tax season ends April 17 this year, so if you haven’t filed already, now is the time. When you meet with your loan officer and accountant, make sure you have your updated balance sheet, your business plan, and your tax returns from the last three years.

These meetings are important for you to know what you may be able to afford if a property becomes available or a piece of equipment breaks down mid-season and needs repair or replacement. Farm Credit loan officers are more than happy to meet you out at your farm as planting season begins and your schedule gets busier. Maintain an open and proactive relationship with your lenders, and be prepared to bring solutions or suggestions for current challenges to the table.

6. Don’t forget to communicate with your landlord.

Meeting with your landlord at least once a year will also limit surprises as far as expectations for the land and any rules or restrictions. This can help when a contract on the land may expire or come up for bid. And, as always, keep an eye out for meetings and trainings in your area hosted by Extension and other agricultural organizations to earn your certifications and credits.

If you’re ready to secure your finances before the busy planting season begins, give us a call at 888.339.3334 or visit mafc.com.


Samantha Steele is a loan officer in our Denton, Maryland office. Sam spent her summers growing up in the fields of her grandparent’s and uncle’s farms in Greenwood, DE. Her respect and love for agriculture grew further as she graduated from West Virginia University with a Bachelor’s of Science Degree in Agribusiness Management and Rural Development. Sam is currently an active board member with Delaware FFA Alumni and the Foundation in addition to serving as a member of the board of trustees for the Delaware Agriculture Museum.