Livestock Farming in Challenging Financial Times
With the volatility in commodity crop prices and inconsistent revenues from the sale of livestock, farming the past few years has once again reached the point of being a challenge to stay in the black. The one relief that is currently out there for livestock farmers is with the decline in commodity crop prices the past couple of years, feed costs have declined some too. While these are challenging times, there are some things that you can do to help adjust your tactics.
Recordkeeping is crucial to being able to adjust any of your farm strategies. You can’t change what you don’t know due to lack of accurate records. This includes production records, feed inventories, income records, payment for services, etc.
Make sure you are keeping these essential records, and if you aren’t already using them to help make decisions, start analyzing them for common ground: there are likely certain times of year that you are always short of cash and other times that you have more than you need to cover your monthly expenses.
Sometimes just the act of looking for these trends can help solve some short-term issues, or at least help you develop a plan to move forward to address them. At the bare minimum, everyone has at least one set of financial records that can be useful getting started: the Schedule F.
While there might be some adjustments that need to be made to move forward, the Schedule F is a good start to analyzing how your operations are doing. Knowing your cost of production can allow you to plan for tough times.
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