What is the “Crop Financial Cycle”?  It’s an idea that hit me a few years back while I was in the seed business.  It’s something that all crop farmers experience, but up until now, were not quite sure what to call it.  The crop growing cycle, from planting to harvest, fits neatly into certain dates on the calendar that we are all accustomed to.  The Crop Financial Cycle? - not so much.  

After harvest, several months could go by before you settle into plans for the next crop.  Let’s face it, after 8 to 9 months of back-breaking work growing a crop, you are not ready to dive into planning the next year.  Questions such as “I haven’t sold this crop.”  “What are the markets going to do?”  “What am I going to plant?” are on your mind during the holidays. The multitude of changes that occur from crop planning to harvest make it difficult to lock in profits when opportunities arise.  The entire cycle depends on cash flow or crop funding, but stored grain sales and operating loans usually happen in the late winter or spring.  Revenue and cost saving opportunities are often missed during this time period. These same challenges are then amplified as you work in the field during growing months.

We’ve created the Farm Financial Four℠, or FF4℠ to take into account the most pivotal times throughout the year to smooth out the Crop Financial Cycle.   Early season budgeting and capital alignment; Post Planting and Pre-Harvest checkups and adjustments; Year End financial assessment with recommendations for the following year.  Having confidence in your finances during these key times in the Crop Finance Cycle will enable you to take advantage of market opportunities when they meet your profit goals and give you peace of mind. 

Allen Lyon