How to Plan before you Start Planting

By: Lynn Thornton, Farm Credit Loan Officer

This article will also be printed in the Delmarva Farmer and Lancaster Farming publications - make sure to check out your print copy!

The Groundhog announced an early spring this year on February 2. Some signs are pointing to spring, depending on the day and the weather forecast. 

We all know weather is one of the many variables we have no control over when it comes to agriculture. It’s actually probably easier to list the items we DO have control over, like our finances.  Money is one variable in agriculture where we can utilize previous years’ information to be more efficient and prepared for the unexpected. 

Early morning sunrise photo contest runner up submitted by denise ziegler
It's never too early to start prepping your farm finances for the year. (Photo: Denise Ziegler, New Windsor, MD, photo contest runner up)


To begin, knowing where you stand financially can be key to making profitable decisions. Most of us in agriculture are very busy this time of year with meetings and catching up on equipment maintenance, so when the weather does break, we are ready for the field. Most have probably met with their financial advisor, banker and even accountant this winter. If you haven't, it's not too late. Make your appointment now. Hopefully you've started preparing taxes and you have a firm idea of what your finances looked like from the 2018 production year. 

The upcoming year is already promising to have some hurdles before we even plant the first seed -  update your balance sheet and review your profit and loss statement from last year.  Will you plan to complete 2019 in the same manner with the same intentions and plans?  Or are there areas that can be improved upon?

Once you complete and update your balance sheet and review your intentions for the upcoming year, it is time to get the most out of your budget.  Do you have a written budget that truly reflects the markets and your input costs for this upcoming year?  The University of Maryland Extension has a wonderful resource with crop budgets on their website.

Have you reviewed your crop insurance?  Many farmers find that adding crop insurance to the budget can help with planning for the unexpected.  Floods, fires and hail storms are hard to predict, but it can make the difference when you have that extra protection. 

You may also consider opening a line of credit.  Interest rates on lines of credit are typically lower than credit cards and offer a variable rate, short term financing option.  Lines of credit can be set up to match your production timing for payment and the funds are available when you need them to purchase inputs.  Many farmers find that having a line of credit can increase flexibility for purchases and saves money with having flexibility in purchasing.  It also has some tax advantages you may want to discuss with your tax advisor.

Finally, it is important to meet with your loan officer and accountant to review your intentions for the year if you haven’t already.  Both should be trusted advisors and see many of the trends going on in the economy to offer useful advice.  Keeping your team and family updated on plans for the year can help them prepare to assist you in implementing these plans.  Fresh financials will help any advisor offer more timely advice and be prepared if things don’t go as expected, which unfortunately can happen with the best laid plans. 

If you’re ready to secure your finances before the busy planting season begins, fill out this form and we'll put you in touch with your local loan expert. Here’s to having a great spring planting!