FinanceOne of the most common things that we hear from farmers and ranchers is, “I’m sick and tired of coming up short on my operating line of credit.” This is something that doesn’t happen few and far between—it’s something that almost every farmer, rancher, or ag business owner has experienced. All are spending thousands of hours working to pay it off at the end of the year—not only because it’s their goal, but because it’s what their bank expects them to do.
As the years go on, more and more ag business owners find themselves falling short. Instead of having a clean slate, they’re stuck restructuring operating lines of credit, terming out debt, and hoping and praying for a better year. But hope and prayer, as we know, is not a strategy.
When losses are termed out and the year ends without changes, the cycle inevitably repeats. The issue is that many enter the next season without a clear plan to address the root causes of their financial shortfalls.
I’ve seen the lack of strategy kill family farm operations time and time again. Which is why, at Legacy Farmer, our focus is on making sure our customers have a detailed game plan—a plan that includes strategies to recoup losses, secure some level of profit margin, and most importantly, ensure your farm’s legacy lasts.
Leaving a legacy that lasts does not happen from just hope and prayer. Your farm requires a system to track and manage your finances at a granular level. Without this, falling short on your operating line of credit will become a recurring issue.
Until you master your finances, the cycle will continue. And I know what you’re thinking: “I’ll just restructure my debt, and it’ll be fine next year.” Friend, while it’s possible to restructure your debt for a few years, at some point, you’ll hit the limit. Eventually, the equity on your balance sheet will erode, leading to the most dreaded outcome in the ag industry: bankruptcy.
You have the power to break the cycle, pay off your operating line of credit, and ensure your legacy lasts. Here’s where you’re going to start:
Create a game plan: Don’t rely on hope and prayer—create clear steps to handle losses and create profit.
Track your numbers: This is not optional. You need to be tracking your numbers on a monthly basis.
Commit to change: If there’s one thing you need to take away from this, it’s that the same patterns yield the same results. You need to be willing to change.
No farmer or rancher should have to file for bankruptcy. Avoiding going down that path requires taking control of your finances today. With the right plan, tools, and commitment, you can break free from the cycle of coming up short and build a more secure financial future for your farm operation.
We’re here to help you create that plan and implement the systems you need to succeed. So, ask yourself: Are you ready to take that first step?
