Posted January 3, 2023 | By: John Maman
2023 Business Resolutions
As the growing season has wrapped up and we are near the end of the year, now is a good time to commit to some financial best practices to navigate 2023. If there’s one thing we can take away from the last few years, it’s the value of sound planning and flexibility to pivot when uncertainties arise. For the next year, here are a few resolutions growers can make to maximize profitability.
1. Think about agronomics and farm economics jointly
Most growers are intimately familiar with managing variability in their crop plan, but might overlook how these same variables impact profit margins. Even when you have a successful harvest, there is still a need to account for every penny and simultaneously hunt for savings, which may not be obvious without the help of financial experts. For example, you might negotiate your input costs, but miss the opportunity to assess how to best pay for these purchases. Suddenly, the savings aren’t quite as impressive, and in some cases, the discounted pricing may end up costing more after you account for the cost of capital. This is just one example of the benefits growers will realize if they pair their agronomic and financial plans - looking at the true value of each dollar while developing their crop plans.
2. Create a flexible financial plan
Responding proactively to changing market conditions, catastrophic weather events, drought pressures, or any number of variables, requires a nuanced approach to crop planning. Profitability is also directly connected to the flexibility of your financial plan. Growers who can seamlessly pivot to a financial plan B, C or even D when agronomic variables shift are in a better position to succeed, despite the ever-changing peaks and valleys of the ag industry. Contingency plans place you in the best position to respond to external factors and can be streamlined with the help of financial experts.
3. Bring in your financial team early
Insight from professionals who deliver flexible payment plans and maximize peak cash flow periods may also yield more value to your dollar. This partnership may work for you at every stage of the season. You will have extra eyes on the intricacies of your plans, which deliver improved carrying costs, better rates—even some programs with 0%—and thoughtful advice to help you adjust plans to make sure they are working for you. Growers need this layer of support and information to be able to maximize their cash and make the right decisions at the right time.
4. Customize your terms
A trusted financial team can offer custom financial solutions that align with both your agronomic and financial needs. Nutrien Financial customers benefit from an extensive knowledge base of financial experts who work to lower interest payments, reduce fees, and create payment due dates that align with your cash flow. This generates savings and increases working capital, which can be invested in other areas to deliver greater profitability. A customized financial plan may also reduce input costs and related capital expenses. This will look different for every operation depending on their unique challenges and opportunities. Working with trusted partners in the planning process offers growers a broad view of their operation to assess and customize their options.
5. Prepare for emergencies
Pairing agronomic and financial plans to maximize profitability provides an advantage in another huge area - your ability to be prepared for emergencies. We know that in the ag industry, emergencies can come in many forms, including market volatility, weather-related challenges and even personal or family matters. By pairing your financial and agronomic plans early, you’ll be better able to save for emergencies.
With a little upfront planning, growers can prepare now for a successful and profitable 2023. Nutrien Financial is here to help every step of the way.
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