AMES, Iowa — Knowing your numbers is key to the profitability of any farm operation, and whether you’re struggling to make ends meet or simply looking to do something differently, Iowa State University Extension has an experienced group of associates and specialists who can help.
The Farm Financial Planning Program with ISU Extension offers producers one-on-one financial counseling, a computerized analysis of the farm business, and referrals to other Extension programs and outside services that may be useful, according to an Extension news release.
Mark Olsen, one of six trained associates who help administer the program across the state, said more than half of the referrals he gets are from farmers who are struggling financially, especially in this time of tight profit margins. Olsen, who covers the northwestern region of the state, also helps farmers who just want to get a better financial picture of their farm, or are maybe looking to expand or downsize for retirement.
Whatever the situation, Olsen and the associates try to meet clients where they’re at — often times at the kitchen table.
“What I have them do is put together some financial paperwork, a balance sheet as current as they can have one, and we also take a look at taxes and recent tax filings,” Olsen said.
The associates help farmers take a look at where they’re at, where they want to be in the future, and what they need to do to get there.
Sometimes the answers aren’t easy and require another person to help uncover solutions, Olsen said.
“A lot of times, we’re talking about alternative scenarios in an existing operation, adding or subtracting animals or crops, or whatever it may be,” Olsen said. “The goal is to find the ‘money makers’ and the ‘money takers.’”
Charles Brown, farm management specialist with ISU Extension, said one of the tools associates offer is a FINPACK analysis, a program developed by the University of Minnesota and widely recognized by farm managers and ag lenders.
Through FINPACK, the associates can provide farmers with a realistic, comprehensive look at the overall farm business, including such things as profitability, liquidity, solvency and risk-bearing ability.
Brown has been using FINPACK since 1984, and for the past six years through his position at Iowa State.
He said the important thing is for farmers to start early, so they have time to put a plan in place and make changes.
“It usually isn’t just one big thing that’s going to fix everything on a farm,” Brown said. “It’s lots of little things.”
Olsen and Brown both said they enjoy helping farmers save their operations, but even more so, helping them be successful.
“What I enjoy is when I can get a plan together for a client and a lot of the stress comes off of them and they find that they can continue farming,” Olsen said.
Farmers can locate a Farm Financial Planning Program associate in their area by contacting their ISU Extension county office or by visiting the Farm Financial Planning Program website at https://www.extension.iastate.edu/farmanalysis/associatelist.html.