The “Perfect Storm” of high feed prices, increased input costs and low product demand has created the worst financial situation of a lifetime for many livestock producers, says University of Nebraska farm transition specialist Dave Goeller.
Prices for livestock and dairy products are creating losses that are unsustainable for many producers. The stress this situation has created on producers and their families has caused some to ask if they will be able to continue in the livestock industry or if they want to.
Although not all livestock producers are in serious trouble, many are asking “What should I do? Where can I go to get some help?” In UNL’s “Cornhusker Economics” newsletter, Goeller outlines how systematically addressing a series of questions will help you organize your plan and help to put you in control of the process. He suggests asking yourself the following questions:
Where are you now?
- Look objectively at your financial situation.
- Evaluate the balance sheets from at least the past three years.
- Evaluate your income and expense records from at least the past three years.
- How much does your family spend on family living each year? Is there any non-farm income to help cover family living?
- Look objectively at your relationships and circumstances.
- Do you have any “Urgent” issues that need immediate attention?
- Look objectively at your business. Are your assets “Earning their Keep?” Should some assets be liquidated to pay down debt?
Where do you want to be?
- Identify what is most important to you. The land, your reputation, your family, other?
- What are your long-term goals?
- How will you get there?
- Think of as many alternatives/options as possible.
- One option is to do nothing, but what are the consequences of doing nothing and who makes the decisions if you do nothing?
- The other extreme is to totally liquidate the farm business, but would there be tax consequences? Where would you live? How would you make a living?
- There are countless alternatives between these two extremes that can keep you in business for the long term.
For the full article, read the "Cornhusker Economics" newsletter.