There's a balance that must be struck in any farm succession plan. Mom and dad (the retiring generation) need enough money to retire and enjoy what they've earned, while the succeeding generation needs to start with enough to maintain a viable business. As Jacquie Gerrard of Backswath Management explains, farm succession conversations should start with... Read More
Category: Finance
In case anybody needs reminding, agriculture is a cyclical business. It's important to pad the balance sheet during good years to ensure a farm or business remains healthy during tougher times, as parts of the ag industry are experiencing right now. In this "Mind Your Farm Business" episode, we focus on using a balance sheet... Read More
Financial ratios serve three main purposes: they provide a quick assessment of a business's financial health, they're a tool for diagnosing financial problems if they exist, and they serve as a measurement for assessing whether problems are being solved. "They show you where you've been, they show you where you have a problem and they... Read More
Farming is not just about producing crops or raising livestock. Much of what separates high performance farms from average to below-average farms is their ability to excel at everything from human resources management and looking after their team to understanding financial ratios and how to deal with the banker, says Rob Hannam, lead facilitator for... Read More
In an era of low interest rates, it's easy to become complacent about the cost of borrowing money, but the day will come when rates rise again. How would your farm handle a one percent increase in rates? What about a three percent rise? Or five percent? Those levels would still be well within the... Read More
What comes to mind when you hear the term "accrual accounting?" Perhaps you flashback to filing your taxes last year when your accountant suggested switching to accrual accounting, but you're weren't sure what it meant and why it would be worth the hassle. Maybe your mind immediately goes elsewhere — what's for supper tonight? Well,... Read More
Is there an ideal exchange rate for Canada's agriculture industry? That depends, of course, on what you're selling or what you're buying, and it's rare to win on both sides of that equation. What's more, farmers have no control over currency changes, so how can farmers best prepare for managing currency risk? That's the topic... Read More
There are sound reasons to incorporate the farm — significant financial reasons, operation benefits and very real long-term business planning implications. But if incorporating is so beneficial, why aren't most farms carrying the Inc. behind the business name? In this episode of Mind Your Farm Business, Shaun Haney asks veteran farm management advisor Merle Good... Read More
According to Statistics Canada, over half a million acres of productive (class 1-3) farmland was "settled" between 2000 and 2011. This "settled area" on dependable agricultural land grew by 19 percent in Canada, with the largest increase happening in southern Ontario and Quebec. The loss of farmland isn't a new phenomenon (the last time people... Read More
Coffee shop talk is often revered and repeated, but is it completely honest? What if, instead of comparing your farm and farm practices across the fence row, you instead sat down with farmers from one hundred kilometers away and compared notes? What could you learn? That's the concept behind formal peer advisory groups, explains Dr... Read More