Please Note: This article originally appeared in the Delmarva Farmer Newspaper. Make sure to grab your paper copy!
By: Amber Rash, Farm Credit loan officer
Agriculture is cyclical – it always has been and likely always will be. At Farm Credit, we talk a lot about the good and bad times that farmers face in the industry and our constant commitment to serving you through those times. On Delmarva, poultry farmers are most definitely facing their fair share of challenges right now, and long layouts are at the forefront.
So, how can you manage your operation and its finances with fewer flocks and less income per year? There’s certainly not a black and white answer, but here are a few quick tips that can help keep you on the right track:
1. Talk to your lender.
Your lender is a partner in your business; we’re on your side and want you to succeed. Don’t fear letting us know you are facing difficult times – the sooner we can get ahead of the situation, the better we can serve your account. Lenders can help you evaluate current and future debt, provide additional financing, or even consider restructuring options. Providing accurate and up to date financial statements, tax returns, profit and loss statements, and flock settlement sheets will be important to your lender in order to evaluate your entire financial situation and determine how they can help.
2. Prioritize needs versus wants.
As income becomes tighter, there comes a time when it may be necessary to reevaluate your lifestyle. Creating a monthly budget will help you visualize how much money is coming in and where it is going. With this, you’ll be able to prioritize things that you need, versus what could be cut back on. Budgeting allows you to evaluate your spending and find ways to save on necessities such as groceries and gas, but also luxuries like recreational vehicles or equipment that could be sold to reduce monthly payments.
3. Be proactive in your houses.
With long layouts, unfortunately there is downtime between flocks, but you can capitalize on this as an opportunity to be proactive in your poultry houses. Utilize this time to make repairs and replacements, as well as clean fans, reflector shields on radiant heaters, or other areas to improve efficiency. Ask your flock supervisor about things you could do in the downtime to make sure your houses are ready to go when birds are available to be placed.
4. Evaluate your business plan.
Every operation should have a business plan full of past results, current statistics, market opportunities, and long and short term goals. If you don’t have a business plan, we have a template we can provide to get you started. Consider your options: Can you diversify your operation or increase profits/production in other areas? Is there anyone involved in your operation who could pick up part-time or full-time employment off the farm that doesn’t take away from the success of the operation? Are there any areas of your operation where your expenses are outweighing your profits and you should cut back? The list could go on and on, but it’s crucial to have these difficult conversations with your family or business partners.
5. Take care of yourself.
Financial struggles can be the cause of many arguments, stress, and even depression. Do you ever find yourself so focused on taking care of others and your operation, that you don’t make taking care of yourself a priority? It’s important to step back and take time for yourself. You could relax and de-stress by taking a walk, reading a book, enjoying a hobby, or anything else that can help clear your mind for a bit. If you are feeling stressed or need someone to talk to, there are many free resources that your lender can help direct you to.
In a time of uncertainty and change, it can be difficult to remain positive and keep stress levels low. You are not alone – and others are here to help you through both good times and bad, including your lender! To help you manage your financial changes during periods of long layouts, be sure to communicate with your lender, create budgets to monitor income and expenses, utilize downtime to improve your houses, take a look at your current business plan, and make time for self-care. These five steps aren’t the full solution, but they will help guide you in the right direction.
Call us at 888.339.3334 to learn more about how we can help guide your operation in the right direction.