Financial Picture | South Dakota Department of Agriculture

Financial Picture

Young FarmerSet Your Own Goals

Set short term objectives and long-term goals for quality of life and what land/production will help you achieve it. Start by documenting what you want to achieve. Include:

  • Annual income
  • Enterprises
  • Methods of production
  • Quantity and quality of production

Run the Cash Flow

Run the numbers to know how one enterprise will support or feed off another. What happens if something goes wrong in one or more enterprises? Test some scenarios to adjust for a potential 10 percent sale price decline or 10 percent loss of production.

Collateral Thinking

What do you have to pledge as security or trade should something go desperately wrong?

Farming Experience

Where, what type, to what extent do you have experience/knowledge that you can follow through with getting the job done as proposed?

Rental Arrangements

Will there be rental arrangements used? How will they support your goals?

Down Payment

Do you have savings or other resources to commit or place at risk to achieve your goals?

Previous Ownership/Management

Have you previously owned or managed significant property that demonstrates your ability to undertake the proposed responsibility of assets to be owned and managed by you?

Improved vs. Unimproved Real Estate

Is it cost effective? Do you have the skills, financing or time to build facilities?

Other Resources

A good overview of lending and credit for farmers is in The Farmers’ Guide to Agricultural Credit, an online description of what lenders look for and how to prepare for borrowing money.