How Midwest Heritage Can Help Farmers Navigate a Challenging Economy
The economy has not been kind to farmers in recent years as the industry continues to be plagued by low commodity prices. Many experts predict another large production year in 2018, however, they are not expecting a significant change in commodity prices. While this is cause for concern, it is not a cause for panic. Navigating a challenging economy simply require doing things a little differently.
Agriculture is a cyclical business. While things may be difficult now, it won’t stay that way forever. Farmers today need to position their businesses so they can take advantage when the ag economy takes a more positive turn.
5 Tips for Farmers in Difficult Times
While dealing with a tough economy can be stressful, it is important that farmers in our community are not intimated by the short-term outlook of the industry. Following are five tips that can help during challenging times:
- Reduce debt. Properly structuring debt is crucial. If possible, sell off capital assets, and reposition short-term debt into intermediate and long-term debt to free up additional working capital.
- Reduce expenses. Until the economy turns around, it is important to look for ways to save on production costs, be it seed, chemicals or rent.
- Learn how to properly market your production. Look for opportunities to expand your customer base. Look for ways to set your farm apart from your competition.
- Adjust living expenses. When times are tough for your business, it may be necessary to look at changes that you can make to your personal expenses. Anything you can cut back on temporarily will lessen the negative impact of a down economy.
- Talk to your banker. Maintaining a strong line of communication with your loan officers is critical. If you have financial concerns, contact your banker for help. He or she may be able to suggest ideas you have not considered that can help get you through tough economic times.