Professional Documents
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Focus On Ag (12-29-23)
Focus On Ag (12-29-23)
Focus On Ag (12-29-23)
Following are some tips for farm operators to be more proactive, as they are preparing for an annual
meeting with their ag lender ……
Prepare an up-to-date 2023 year-end farm balance sheet (as of 12-31-23 or 1-01-24) .
Preparation of an accurate and up-to-date year-end balance sheet is critical to the loan renewal process
for any farm operation. Updating the previous year’s balance sheet with current year-end numbers can
help expediate the process. If the farm operation is a sole proprietorship, most ag lenders will also want
personal asset and liability data included. If it is a partnership or family corporation, most ag lenders will
also require personal balance sheets from all partners.
A good year-end balance sheet will include:
List of accounts receivable as of 12-31-23, which includes whom the money is due from, the dollar
amount, and the date it will be received. This includes deferred payments for grain sold in 2023.
List of accounts payable as of 12-31-23, listing who the money is owed to, the dollar amount, and
when payment will be due.
List of 2024 prepaid expenses for both crops and livestock as of 12-31-23, which details the input,
amount of the input, and the amount that was prepaid. This is for items where payment has occurred.
Grain and livestock inventory list as of 12-31-23. The grain inventory should include total bushels of
each crop, bushels that are forward priced (date and price for each sale), and any sales plans for the
remaining bushels. Livestock inventory should include the number, weight, and any sales
information on market or feeder livestock. An updated list and estimated value of breeding livestock
should be included as an intermediate asset rather than a current asset.
CCC loans on 2023 grain that were taken prior to 1-01-24, listing the bushel amount, CCC loan rate,
CCC interest rate, CCC loan maturity date, and sales plans for the CCC grain.
Review the list of farm machinery and equipment, buildings and facilities, and other capital assets,
removing any assets that have been sold or removed, and adding any assets that were purchased or
acquired during 2023. Farm machinery is usually listed as an intermediate asset.
Add any land or other long-term assets that were added in 2023 and adjust asset values as necessary
(may want to review this with an ag lender).
List of all other loans and creditors as of 12-31-23, listing the principal balance, interest rate,
payment amount, and payment dates. Be sure to include short-term creditors for crop inputs, loans
with family members, and CCC loans through FSA offices.
It is best to include all partners and family members that are part of the farm operation in the renewal process
with an ag lender, so that all key players are “on the same page” with financial decisions affecting the farm
business. It is very important to be trustworthy and honest in preparing and sharing financial information with
an ag lender to help assure confidence in the accuracy of the financial data. View an ag lender as an informal
partner in a farm business, as a good ag lender can be a valuable resource in making management decisions.
Farm operators should expect their ag lenders to be well prepared, trustworthy and honest in financial dealings.
It is important to remember that most local ag lenders also face a lot of pressure in the process of renewing farm
operating loans and that they need to do their “due diligence” to complete the necessary requirements in the
loan renewal process. The documentation that is prepared will likely be reviewed by senior management at a
financial institution, as well as be subject to review and audits by Federal and State bank examiners. Most ag
lenders are part of the local community and want to see farmers have financial success, which is in the best
interest of both the farm business and the ag lending institution.
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Note --- For additional information contact Kent Thiesse, Farm Management Analyst
Phone --- (507) 381-7960; E-mail --- kentthiesse@gmail.com