10 tips for navigating your farm through coronavirus

1. Expect huge volatility.
Coronavirus has pummeled the economy, including agriculture. Widmar points out the Great Recession spurred by the 2008 financial crisis contracted the economy by around 9%. Estimates for the economic damage incurred from COVID-19 for the second quarter of 2020 approach a 20% contraction. 

“It’s off the charts,” he says. 

Agriculture shares in this pain. COVID-19 has disrupted the meatpacking industry, and the crash in gasoline prices has led to ethanol plants running around 50% of capacity. 

On the other hand, estimates exist that the economy may grow 10% to 15% in the third and fourth quarters of 2020, says Widmar.

“So, we’re talking about record breaking (levels) to the low (end) and possible record breaking (levels) to the high (end),” he says. 


2. Control the controllable.  
“Look at your balance sheet and make sure you’re doing everything you can to position yourself,” says Franzen. Sometimes, this means selling assets you do not want to sell. 

“Sometimes, that’s the best decision you can make to position yourself for success in these kinds of down cycles,” says Franzen. 

3. Make a farm budget. 
“We see that operations who track actual performance to a budget make better and more timely decisions and end up the year in a much better (financial) position,” says Franzen. The budget can be fluid, adjusting as new information becomes available through the year, he adds.

Read More at https://www.agriculture.com/farm-management/business-planning/10-tips-for-navigating-your-farm-through-coronavirus

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