What a wonderful week to hopefully finish this year’s harvest. New record temperatures for part of the week made many of us probably wonder if winter was truly only a few weeks away. The weather has given us a great fall to get harvest completed in a very timely fashion. I think it will be a harvest that we are all going to be thankful for when Thanksgiving comes around in a couple of weeks.

With that said, I wonder how the year will stack up financially? Have you given it any thought?

We have all recently seen several articles in the media discussing the lack of projected income for corn and soybean farmers due to low prices and input costs remaining stable at higher prices.

One such article I recently found by Gary Schnitkey, Department of Agricultural and Consumer Economics, University of Illinois on the Farmdoc website (http://www.farmdoc.illinois.edu) starts out like this:

“Net incomes on Midwest grain farms are likely to be low in 2015, potentially lower than levels experienced from 1998 to 2002, the last time commodity prices fell after a period of higher prices. Currently, most farms have strong financial positions, built as a result of higher incomes between 2006 and 2013. This financial strength presents many farmers with options in dealing with low incomes. One danger, however, is that some farmers will use this financial strength to postpone making tough decisions about cutting 2016 production costs and cash rents, potentially leading to financial stress in future years.”

I want to stop right here because I think enough is said in the last three lines above. The words of danger, financial strength, low incomes, and stress are all points that should be huge discussion points as farm families look to the future of their farming operations.

The scenario of farming losses and financial stress for farm families is one that is real and can be realized for many farm families if proper financial management is not addressed. To help get farm families thinking about their financial strengths and weaknesses, OSU Extension is offering a Farm Business and Finance Webinar Series aimed at helping farm families improve financial management knowledge.

This free educational four-session webinar series is funded by the North Central Extension Risk Management Education Grant titled: Ready, Set, Go: Preparing Farms to Successfully Manage Risk. The webinars will be held on Mondays from 11:30 am to 1:30 pm starting Nov. 16 through Dec. 7. Participants can login from their home or office computer to access the webinar. The sessions will cover the following topics:

Session 1 – Farm Business Planning and Systems Management

• Is the operation large enough and profitable enough to provide family living draw?

• Is the business plan built on economic considerations?

• Is there an adequate system for obtaining management information and monitoring business performance?

Session 2 – Introduction to Financial Statement

• Balance sheet – a summary of all the assets and liability of the business at one point in time.

• Income statement – reflects the profitability over a period of time.

• Statement of cash flows – reconciles the beginning and ending cash on the balance sheet.

• Statement of owner equity – reconciles beginning and ending owner equity on the balance sheet.

• Projected cash flow budget – lists anticipated cash flow in and out of the business.

Session 3 – Financial Ratios – Legal 21

• Liquidity – what are options to correct liquidity concerns?

• Solvency –what options does a farm owner have in correcting this?

• Profitability – rate of return on farm assets…can I really affect this?

• Repayment Capacity – do I have the ability to repay the loan on the next farm?

• Financial Efficiency – am I using my money to its fullest potential?

Session 4 – Using Financial Data to Drive Decisions

• Determining risk capacity of the business

• Capital improvement plan (short and long term)

• Individual enterprise analysis to determine profitable enterprises

• Decision time using case farms

Take advantage of this opportunity. Farm business owners and families interested in this free webinar can register by clicking http://go.osu.edu/farmwebsurvey.

For additional information contact Chris Bruynis at [email protected] or by calling 740-702-3200. Those registered by Thursday, November 12th will receive the login information and course material on Friday, Nov. 13 by email.

Tony Nye is the state coordinator for Small Farm Programs and an OSU Extension educator, agriculture and natural resources, for Clinton County and the Miami Valley EERA.