Are You Ready For The Whipsaw?
With the turmoil in the world commodity markets and the concern about the flooding and weather conditions in the US, farmers can expect that their commodity prices are going to whipsaw up and down very rapidly over the next several months. A key to not getting personally whipsawed is to have a written plan in place for when you plan on selling your crop. This written plan should have very detailed triggers for what causes the sell decision.
Too many farmers verbally tell their neighbor they will sell the crop at $5 and it never quite hits this price. Many farms are now approaching $5 million in sales or higher and this requires a more detailed disciplined approach to selling their crop. Also, using market professionals to help sell your crop is worth a consideration.
What is your plan and is it in writing.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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