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Unit 3: Managing the Farm/Ranch Business for Long-Term Success

FINANCIAL MANAGEMENT

(Gigi DiGiacomo)

Good financial management is critical for business’s long-term economic viability. Farmers and ranchers need to understand basic business finance concepts, and develop skills in areas such as production costs and pricing, budgets and variances, cash flow, basic accounting and financial statements. There are many excellent resources available on these topics. You might start with ATTRA’s Marketing, Business and Risk Management publications. Or check with your local Extension office or state land grant university for programs and resources in farm financial management.

In addition to these basic financial management skills, farmers often need financing for start-up expenses, operating funds and capital investments (land, buildings, equipment). Other farmers and ranchers may need financing for new product development, market research and other tasks that help determine a new product’s viability in the marketplace or the costs/benefits of new practices. Think of the examples in previous units in this course: on-farm milk bottling and processing, wild game production, artisan cheese making, farm-to-school programs, wine production and restoration ecology. A lack of business models for such products means farmers and ranchers must plan and develop them from scratch and this often requires financing.