Down Time is Go Time

This time of year for most farmers is a period of down time. There may some crops that are planted, but dormant. Some farmers spend time maintaining their equipment for the new year.

I think this time is what I call “Go Time.” This is the time to:

• Prepare and review your operating budget for the new year. Some farmers treat this as a necessary evil for strictly for the bankers to give them a loan. I believe this is the road map that you need to have a successful year for the new crop year. By properly budgeting your production, revenues and expenses, you have a several clues where to change crop mix, cut expenses, or obtain adequate capital.
• Partner up with your banker. A banker wants you to succeed as much or more than you do. If you succeed, his bank has a loan that gets paid off and he gets rewarded by his peers and bosses. I believe the lender relationship should be a partnership. As a partner, you need to communicate your problems sooner than your successes. A good banker is always interested in helping you solve yours problems. This is the time to spend energy and effort with your banker.
• Review your retirement plans. Check the allocations to make sure the returns are what your expected for the year. Update your retirement projections to reflect any changes to expected future income, changes in assets and changes in retirement age considerations.
• Check your insurance needs. This includes:
  • Health insurance – Look at a health savings account
  • Life insurance – Are you providing adequate funds for your spouse and children?
  • Crop insurance – Check out all available options and run the numbers
  • Liability insurance – Is your protection adequate?
• Review your estate plan. When was the last time you read your will or living trust. If more than two years, do it now!

There are many other things that can be done this time of year to make the new year a success. The key is to do them (you will still have time to take a trip where it is warm and play golf).