Agricultural Consultant and managing director at Brady Group: Agricultural Consultants & Land Agents. The Lodge, Lee Road, Cork.
1st Published in the Farming Independent 23rd January 2023.
2023 is already up and running, the start of a new year is a good time for people to reflect and plan the year ahead. The following are 5 tips for farmers and their farm businesses for year ahead:
- Understand Climate Change
Our planet is warming up; it is causing milder wetter winters and hotter drier summers.
I can see this already affecting farmer clients, as different systems of production are affected by drought conditions in summer and good growth in the shoulders and in the winter.
The first task for farmers is to rise about the constant barrage of negativity about farming from environmental journalists and eco keyboard warriors. Engaging with them online, in print, radio or TV only gives oxygen to promote their own careers and mostly extreme viewpoints. Ignore the provocation, rise above it and trust and explain the science. Tell your story and how you are helping to save the planet on your farm.
Firstly, educate yourself on the global climate crisis, then examine Irelands position, next familiarise yourself the agriculture and land use sectors influence on global warming, and finally see where your farm business is positioned.
All people on the planet can reduce their carbon footprint by cutting back on fossil fuel use, but farmers are the only people who can actually sequester carbon and reverse warming for other people and industries.
I believe by 2050 agriculture will have met its climate action targets and led by farmers agriculture will be actively helping other industries achieve their targets.
Put that climate plan in place for your farm business.
- Review your Farm Business Strategy
A farm business must have a ‘Strategy’ or ‘Clear Goals’ as to where the business is going.
The following questions should be posed and answered about your farm business:
- Is the current farming programme right for my holding and for me?
- How good is the physical and financial performance of the farm business?
- What actions am I going to take to change my situation?
If you are comfortable with your existing goals and path for the farm business, then go ahead and plan the year ahead. If you are in doubt, engage a suitable professional to help you make a Strategic Plan for your farm business.
- Choose Physical KIP’s relevant to your business
A farm business one must always start with a physical plan. How many acres of land, how many livestock and what crops are planned? On a livestock farm such a plan will project the overall stocking rate and see if there will be enough fodder made for the winter of next year. The position in respect of the Nitrates Derogation is now an integral part of that plan. If there is a problem projected, decisions can be made early to reduce livestock or alternatively rent additional land.
The physical plan will also project milk yields, crop yields and livestock weight gains for cattle. Key Performance Indices (KPI’s) are an essential ingredient of any plan, but having accurate past performance data on grass grown and utilised, silage stocks, milk yields, crop yields, weight gains etc. enable much more accurate projections for the year ahead.
Choose the physical KPI’s that are relevant to your farm business and go and improve them in 2023.
- Set Financial Goals
The financial plan is effectively projecting the financial accounts for 2023 for a farm business.
The basic ingredients are the Profit & Loss Account, Source and Application of Funds and a Cashflow Statement.
Again, Key Performance Indices (KPI’s) with accurate past performance financial data help enormously with projecting the financial performance of the year ahead. The majority of this information is in previous years farm accounts. It is much better to project from your own financial accounts rather than standard farm profit figures, after all its your farm business you are projecting.
Some financially savvy farmers now have financial systems in place whereby their financial accounts are prepared on a monthly, bimonthly or quarterly basis, therefore they have upto date financial information on the farm business at all times. This is very powerful information for preparing or monitoring a farm business plan. Instead of looking at accounts which are two years out of date you are looking at real time financial information on your farm business.
Whether your farm business is flying, coasting along or struggling, prepare a financial farm business plan and set financial goals for 2023.
Don’t forget to set some personal goals for 2023 as a reward to yourself for all the hard work done on the hamster wheel of life.
I often suggest to clients to book a trip away from the farm later in the year, the big benefit of this is that you spend the year looking forward to the trip. For some this may be as simple as a trip to the autumn rugby internationals, but for others it may be the trip of lifetime to see the Irish women’s soccer team play in the World Cup in Australia.
Reward yourself for your hard work, you will not regret it.
Presently, the outlook for all sectors in 2023 is positive which provides as good platform to plan the year ahead from a personal and farm business point of view.
So ‘go and make hay while the sun as shining’ and have a happy and prosperous new year.