Balance sheet over farm scene

A long to-do list was on my mind as I traveled the prairie. The biggest project requiring the most thought was preparing a presentation for the South Dakota Farm and Ranch Stress Summit in late September.

I was asked to present on farm financial management, which is usually a relatively easy thing for me to do. What had been working on my heart was how to do this in such a way that it would not stress a producer more than he or she is already.

I thought this article would be a good place to share some of the thoughts I put into the presentation.

First, remember, you are not alone in this stressful time. Most of South Dakota, along with some surrounding states, is struggling, too. This doesn’t solve any problems, but sometimes we feel isolated on farms and ranches. Just remember, there are others that are paddling this same canoe.

Lori Tonak

Lori Tonak

Part of my job this past year has been to just listen to my producers as they talk about what is happening on their operation, both good and bad. Sometimes, it helps to talk to someone that is not involved day-to-day with the operation.

There are three things I do know about the times we are in:

1. There are no easy answers.

2. Some things are completely out of our control.

3. Hard decisions may need to be made in these tough times.

These three things are nothing new to any of you. In fact, I have heard some of these from the producers I work with. Since there are no easy answers, knowledge will be key for decision making.

As some things are out of our control, we need to address those items we can control. Producers must pay attention to their finances now, more than ever.

With the volatility of markets, weather impacts and other events, financial planning and the ability to adjust the plan are crucial.

Hard decisions may include off-farm employment, a spouse working outside the home, or reducing family living. All of these can be decisions that change our lifestyle, which is always difficult.

During these tough times, operations need to evaluate the efficiency of every enterprise of their operation.

Evaluate the strengths of your operation and capitalize on those. To do that, you need to track and evaluate financials. This may mean spending more time on business operations such as bookkeeping and marketing – a difficult task for many producers. They would rather be out on a tractor or working with livestock than in an office working with numbers.

Production agriculture has become a business, not just a passion, and the management of the business leads to success.

There are no cut and dried answers to get through this stressful time, but financial management is crucial to survival.

If any producer would like more information on the South Dakota Center for Farm and Ranch Management and how we can help you be resilient, contact me at lori.tonak@mitchelltech.edu or reach any of our instructors at 1-800-684-1969 or sdcfrm@mitchelltech.edu.

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