Managing farms better when the farm economy is profitable
An ag lender says a tough farm economy forces farmers to be more meticulous with their on-farm management decisions.
But, Bill Watson, president of the agribusiness division for UMB Bank says it’s also important for farmers to continue those diligent management practices when the economy isn’t bad. “In 2014 we had tremendous prices – we saw people do silly things,” he says. “What they should have been doing then was taking some of that surplus cash and reducing leverage and even making some investments into improving efficiencies.”
He tells Brownfield farmers and ranchers often are better decision makers when economic times aren’t so great.
But, he says it isn’t uncommon to see poor choices in more profitable years. “2015 taught a lot of people lessons about keeping expenses low,” he says. “2016 is going to be a better net-year for folks because pay more attention, sharpened their pencil, and looked at what they needed to have instead of what they wanted to have.”
He says the 2017 ag economy isn’t looking to rebound significantly – and farmers will need to continue to tightly manage their balance sheets.
AUDIO: Bill Watson, UMB Bank
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