Author: Jennifer Rogers
Planning Unit: Agr Economics
Major Program: Farm Management
Outcome: Initial Outcome
I work with a farm that is going through bankruptcy. Every year we have to submit a plan to the bankruptcy court on how they are going to succeed that year and have money to pay to unsecured debts through the court. This how allowed us to get very detailed on the budget for the farming operation and know how much revenue we need to generate in order to make things cash flow. In doing this we outline the projected yield and projected price of the crop. In 2017 there was a significant jump in commodity prices during the summer. Using the budget we had outlined I was able to counsel the producer that the prices available were much higher than our projected prices and that forward selling a large portion of the crop at this time would help lock in positive cash flows. The producer followed through with this recommendation and pre-sold the crop. This producer was able to make a profit and 2017 and pay a respectable amount to the court. This producer then took that knowledge from 2017 and was able to do a similar strategy in early 2018 for the 2018 crop when prices made a slight increase.
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