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Steps to remain profitable despite tight margins

A risk management specialist has some advice for crop farmers intent on remaining profitable.

Josh Ulbricht with Compeer Financial says understanding the goals of the operation is a good starting point.

“A lot of that is going to come down to your financial reporting and how comprehensive is it. Are you doing consistent year-end balance sheets? Are we adjusting for things that we don’t typically consider like family living costs, budgets, or are we just kind of using a base assumption?”

From there, he tells Brownfield longer-term planning is important.

“After you kind of start just having that basic understanding of where you are (and) where you want to be, then you can start looking at key cash flow drivers and getting into understanding your cost of production.”

Ulbricht says that is usually the key piece to navigating periods of lower margins.

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