The prospects for low and/or negative margins exist for farmers in 2017.
The prospects for low and/or negative margins exist for farmers in 2017. However, many farmers have prepared themselves to handle lower margins. Cost cutting, budget trimming, adding value-added and premium crops, and increasing the focus on marketing have all bee steps farmers have been taking recently. Those farmers that have successfully trimmed their costs, raise premium crops, or can make an extra 40-75 cents a bushel than the average farmer due to better marketing will likely be fine. If grain prices continue lower this fall, there could be more famers, than in the last couple years, that will give up farms due to the shrinking margins. As a landowner, have you considered the steps that your farmer has been taking? Is your farmer adequately prepared to succeed in a lower margin environment?
Having a farm manager can help the landowner work through these questions and potentially tougher times. Maybe it is time to consider a change in lease type to something that is better for both the landowner and farmer. With the many types of leases we work with, there are many options available to the landowner. Sometimes just changing the type of lease can help a landowner’s current farmer get into a less risky financial arrangement. Or, you may be considering a change in farmer. Whatever you are trying to accomplish, Halderman can Help. The best time of the year to start considering potential changes is during the summer. Having a plan in place during the summer before harvest begins in September is best. Some leases are written so that any change or termination notice needs to be given prior to September 1st and many are by October 1st.
We are always available to talk with landowners to see if you would benefit from our services. Sometimes a landowner doesn’t need complete farm management and just needs help with questions on leasing. Whatever your needs, Halderman can Help!