Take Time to Complete a Mid-Year Financial Check-In

As we cross the halfway point of the year, now is the time for farmers to take a step back, reflect on the past six months, and look ahead to the second half of the year. A mid-year financial review isn't just a good practice - it's key for making adjustments, ensuring financial stability, and preparing for what's ahead.

Why Review Mid-Year?

The farm business is unpredictable. From fluctuating commodity prices to unexpected weather events, your farm's financial performance can shift quickly. A mid-year review helps detect what's working, what's not, and how to adapt.

• Assess Profitability: Are you on track to meet profitability goals? If not, why? A financial review allows you to compare budgeted verses actual income and expenses.
• Control Costs: Pinpoint areas where costs may be creeping up, such as fuel, feed, labor, or input prices and adjust to mitigate risk.
• Cash Flow Management: Evaluate the cash flow through the first half of the year. Do you have enough to cover payments without jeopardizing operations?

Key Areas to Review

• Revenue Streams: Review crop and livestock sales to date. Are you meeting projections? Have there been changes in market demand or pricing?
• Expense Trends: Analyze variable and fixed expenses. Consider whether changes in input costs, equipment repairs, or labor needs require a budget adjustment.
• Balance Sheet Check: Look at your assets, liabilities, and equity to ensure your financial position is stable. Mid-year is a good time to assess working capital and debt levels.
• Tax Strategy: This time of year offers an opportunity to project your tax liability and consider strategies like equipment purchases, pre-paying expenses, or deferring income to balance taxable income.
• Goals and Benchmarks: Revisit your goals for the year, both financial and operational. Use the review to refine your targets for the remainder of the year.

Use Your Team

Work with your ag lender, accountant, and financial advisor to aid in these financial reviews. They can help you run accurate reports, interpret results, and develop a clear action plan. A few hours spent now can save stress later. Schedule a meeting with our Ag Team online or give us a call to get started:  Loans for Ag Producers | Security Financial Bank