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Economist says work on management decisions ahead of harvest

An agricultural economist says the lazy days of summer between fieldwork and harvest is a good time to concentrate on the business side of the farm.

David Widmar from Ag Economic Insights tells Brownfield some decisions like seed and fertilizer purchases might be on auto-pilot, but there are some variables to look closely at. “We have a higher interest rate environment today than we had last year. It’s also one of the highest that we’ve seen in recent memory. Retiring debt in this environment, I’m not saying it’s a bad idea but it’s a strategy we’ve got to pursue with caution.”

Widmar says farmers need to look closely at the real value of prepaid discounts they’ve typically seen for inputs at this time of year compared to other places to put those dollars. “If we have an opportunity cost to save that money in maybe a savings account or a CD, or maybe we have opportunity costs in the form of a line of credit interest, we just want to pause a little bit and think about how is today’s environment different than normal and how am I going to approach some of those decisions.”

Widmar says when harvest season wraps up, farmers are often rushed into financial planning with taxes, the new year’s budget, seed, and fertilizer purchases, and a cash flow plan, but working on some of that now will make the end of the year much smoother.