Farmers today are farming like never before. They have higher yields than ever before, and the cost of doing business follows that same trend. It doesn’t take much to reach a million dollars in operating expenses, which are just some of the expenses farmers have on a year-to-year basis.
One would truly never know this by reading the latest farm news, as reporters are informing farmers and ranchers about everything under the sun except money. Today’s farmers are thinking of finance efficiency in terms of cutbacks, which is not all bad. However, at the end of the day, saving money on seed, chemical, fertilizer, feed, and cattle are just a shovel of dirt into making this money pit smaller.
What is not being looked at is how to efficiently utilize the number of money farmers deal with on an annual basis. Conditioned thinking has every one of us convinced the bank is the only place to get money, which is wrong. Farmers don’t buy land and let it sit. Farmers buy land, farm it, and make a profit off the land, all while the land value appreciates. Farmers need to look outside the current system and use a system that allows their money to work for them while using that same money to operate, much like they use their land.
The current system is making the banks wealthy, but what about making our farmers wealthy. Farmers are paying enormous amounts of interest to the banks each year for the use of the bank’s money. It’s time for farmers to take back control of the biggest part of their operation and eliminate or reduce the amount of interest, control, and collateral the banks have. Farmers pay attention to their profits and losses better than most business owners. At the end of each year, farmers know exactly how much money they lost in interest to the bank. But what farmers may not realize is how much control the bank has over every aspect of their lives. I have seen cases where the bank has little control because they carry a small loan for that farmer, and I’ve seen cases where the bank has 100% of the control because of a large amount of the loan.
Even a small loan that is carried out every single year puts a farmer’s livelihood at risk more than anything else. This risk is much greater than the weather, disease or pests or commodity prices. Why? For the single reason that if there is a loss of profits, one entity is controlling the farmer’s livelihood, and it is not the farmer – it is the bank. The bank has the final say, regardless of how much money the farmer saved by budgeting less for operating expenses.
Farm publications are great, but it’s time to stop reporting on the obvious and start looking at what other options our farmers have to finance their operations, take back control and eliminate risk. Financial options, control, and risk elimination are all covered in the book Farming Without the Bank, where farmers will learn how they can utilize their money for farming while still making interest on it, take back control of their operations, not be forced to use the farm as collateral to loans and stop financing the farm the same way they did 100 years ago.
Order the book or call Mary Jo at 701-751-3917 for more information.