Planting Season Tips from an Ag Lender

Every spring there’s a sea of tractors out planting the fall crop.  During this time there is usually one thing on a farmer’s mind: getting the crop out on time.  Although, this is the perfect time for farmers to be thinking ahead on how they can help their lender.  How you may wonder? Let’s discuss a few things to do during planting season that will proactively help you and your ag lender.

  1. Tracking Expenses – Planting is one of the pivotal points of the year where budgets easily increase if some of the expenses weren’t prepaid.  Now is a good time to review your annual budget, looking at specifically at allocated planting expenses.  Keeping track of expenses consistently will make it easier to make financial decisions as the growing season unfolds into harvest.  Loop your ag lender in on any major over runs on expenses.  Having regular conversations can help create solutions to protect profitability, such as looking for ways to cut operating expenses.  Although, if additional operating funds are needed, working on an increase is easier to do earlier in the growing season versus when harvest is in full swing, or even at the end of the year when final income and expenses haven’t been finalized.      
  2. Finalizing Acres – When planting is done, take stock of the acres seeded.  Often the weather may impact what commodities are planted and sometimes farmers will need to adjust their plan in order to get every last acre planted.  Make note of the acres seeded and the dates planted.  This will help to not only provide your lender with estimated revenues, it will also give a glimpse of what harvest expenses will be.  If there are significant changes to expenses or revenues have the discussions early on with your lender.  This will allow for ongoing discussions and forecasting any lending needs necessary. 
  3. Crop Insurance – Weather is finicky, and claims are possible.  Your ag lender will most likely already be familiar with the coverage level on your farm’s operation, yet if there are possible claims or prevent plant claims be sure to share these with your lender.  Being transparent with your lender will allow any financial losses to be discussed and to see what options are available. 

Keeping your lender informed as you make your way through planting is important.  Let your lender take a couple laps with you in the tractor and discuss how planting is going and any changes you have made to the original projection.  Be honest, if expenses are higher talk about those things early on, it helps your lender understand what’s happening in the moment and not 6 months later when it’s time to renew your operating line. Oftentimes it may seem best to let things unfold and hope things turn out alright, yet should revenues become compromised it may be too late to take proactive measures.  While it may seem unimportant to update your lender during or after planting, they will appreciate to know things went according to plan or what changes you had to make allowing for better future decisions.   

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