With the recent loss of a parent who was a lifelong farmer, there has been a lot of reflection. Some of it being lessons learned from the parent, the treasured memories, and, of course, how valuable the pre-planning was for the loss that has made financial management easier at the present time.
The simple establishment of power of attorney and signature authority on bank accounts, although rather simple steps, have been very helpful during the transition of parents with failing health and the loss of one of them. Also, the rather sudden loss of a close relative about the age of my wife and I caused us to implement the completion of a will that we had discussed many times. Many other steps are potentially valuable for your family and I encourage you to reflect on your needs and begin the process of implementation.
During this reflection, I am reminded that we often contemplate things, but we may fail to fully plan for the situation or even implement the plan. With dairy farming, this is a constant process. It is that time of the year when many county fairs have come and gone, the Ohio State Fair is almost over, with summer vacations over and the starting of another school year is almost here. Thus, I encourage you to reflect, plan and then implement plans for some key farming particles that will be occurring during the next five months of the year:
1. Get things in order for corn silage harvest and the final cuttings of perennial forages. Much attention is provided about this in the recent release of the July issue of Buckeye Dairy News (dairy.osu.edu/newsletter/buckeye-dairy-news). This forage harvest will determine if adequate forage supplies are available and if additional forage needs to be purchased or rations adjusted for the supply available.
2. August is the month to decide if some fall seeding of forages is going to take place.
3. Manure application will follow shortly after harvests. It is a good time to inspect all application equipment for repairs and determine if any new equipment needs to be purchased. With the current state of things, you can’t assume that equipment will be on the lot and parts in the stockroom. Also, reaccess available acres needed for manure application and application rates based on crops anticipated and soil nutrient levels.
Planning for these aspects now can reduce application issues during the narrow windows of the fall season, with the window based on removal of crops and weather conditions. You need to be prepared for a limited number of days for application. Missing the fall application can severely limit capacity for holding manure until spring application.
4. With the high activity in the fall with harvest and manure applications, make sure safety is a high priority.
5. The volatility of milk and feed prices is going to continue. You are encouraged to use some risk management features to limit this volatility for your dairy farm. Strategies are available for both the milk and feed prices.
If you are planning to lock in some grain prices, typically October or November are the best months to consider. Strategic management of input costs is going to be key for impacting cash flow and farm profitability at the end of the year.
6. Interest rates are on the rise so make sure you are in conversation with your loan officer as you look at making year-end payments on short and long-term loans. Also, getting an understanding of potential interest rates for 2023 operation loans is important for your planning purposes.
It’s a process. Family and farm management is a continual process. It takes reflecting on needs, planning based on wise counsel, whatever the area of the family or farm needs, and then implementing the plan. Dropping the baton at either step can impact the adjustments that become necessary. However, don’t forget to enjoy the journey along the way.
