When Management Pays
- Grant Wiese
- Nov 3
- 3 min read
NW Call to Action
When Management Pays
Last week was a ton of fun for me and a really uplifting experience. Back in September, I recorded a podcast episode with Farm4Profit which was finally released on Oct 27. If you haven't watched it yet, you can view it here: Making Money When Markets Drop | Grant Wiese of Farm640 on Farm4Profit Podcast
But that wasn't the most exciting part. As I unveiled in the episode, I ran a special Cash Flow Contest for just 6 days, and the results of the contents kind of blew my socks off. Contest participants were asked to share what they are doing on their operations to improve cash flow.
The results tell me a lot of you are taking this newsletter to heart (or were already doing what I preach). Farm producers are doing a fantastic job of managing cash flow every single day; of making difficult or unique decisions to improve profitability and add value to their community.
I'm excited to announce the winner of the Cash Flow Contest: Andrea W!!!
Check out the winning submission:
We have a well diversified operation which includes growing corn, soybeans, and wheat, along with turkeys, hogs, and cattle. This past growing season we took the time to figure out what our break even was per bushel of corn, soybeans, and wheat. Something we had never done in the past, but this gave us a starting point as to when to market our grain. Before we just “tried” getting the highest price we could, and had really no marketing strategy whatsoever.
Next we decided to cut our nitrogen application in half on our corn, and stopped applying commercial P and K. In the past our agronomist told us to not account for the previous crop stover, or for all the livestock manure we apply to our fields. When we updated our soil tests and started crediting all the manure we were applying, we realized we were applying way too much commercial fertilizer! This past season our crop did just as good on yields as previous years with half the amount of fertilizer applied.
I think the best thing that we have done and are still currently working on to improve our cash flow is becoming more knowledgeable! Knowledge is power, and when you have the power to make more informed decisions about every thing in your operation, you naturally will improve your cash flow! That’s what led me to listening to the farm4profit podcasts and reading your newsletters! Just knowing how to put a cash flow projection together and update it regularly has helped us make more informed decisions to improve our cash flow! I’m still learning though, but have high hopes for the next year to improve our cash flow and working capital even more!
Along with becoming more knowledgeable, some of our operations goals in the next 12 months are to do the following:
1. Market some of our grain in the fall to get cash in the bank to make prepay purchases on chemicals and fertilizer instead of not prepaying at all or putting all the prepay on our operating loan and paying high interest rates until we could pay it off.
2. Sell the feeder calves that will not fit in our feed lot in smaller more uniform groups to capture more “value add” to our prices at the sale barn. In the past we just sold everything as one big group and weights were anywhere from 300 to 600 lbs.
3. Start making wall sweeps to clean out poultry barns, so growers don’t have to manually shovel the litter away from their walls and corners during “total cleanouts.”
Wow! There is a lot they are doing right on their operation. Here is what stands out to me:
Andrea is actively:
Working on breakevens
Getting second opinions
Cutting costs
Growing knowledge
Focused on marketing
Identifying 'value add' opportunities
Has a plan for the future!
A big congratulations to Andrea and thank you to all who shared their knowledge in the contest! I will be providing more of the great ideas being used by the best operators here in the weekly newsletter in the future.
SW Financial Literacy
Balance Sheet Season
It is nearly my favorite time of year, balance sheet season! I have created a farm balance sheet spreadsheet just for you. If you are signed up for this newsletter, you probably already have a copy. If not, no worries. Here is the Farm640 balance sheet for you to use!
Need help with your operation's financials?
I have limited spots available for 1-hour consultations helping you:
Understand your farm's financial position.
Prepare for future growth opportunities.
Discuss purchase & finance options on farm transactions you are working through now.
Sign-up here if my services can benefit your operation:
Have a great week!
Grant
