Running a farm both on the field and in the office are two separate businesses

Running a successful farm takes a lot of hard work both in the fields and in the office.

Leaders at Hebert Grain Ventures tell aginfo.net that farmers should view their operations as separate businesses.

“You run two [businesses],” said Kristjan Hebert. “You run a farm operation, and you run a real estate business. Understand the numbers on both of those. It’s no different than, you know, Walmart sells stuff and they have a building. If you have a hotel, you need it to be full. So, is your farm profitable? Is your real estate operation profitable? Yes, they’re at different rates. Then, how much cash flow does your farm operation have, and how much equity does your real estate operation have? You need to know both of those numbers because your real estate equity allows you to buy land, and your cash flow from your farm allows you to pay for it.”

Hebert says knowing that information will make lending requests a lot smoother.

Related Stories
Rail consolidation could affect grain basis, freight rates, and service reliability across major producing regions.
For communities that depend on agriculture as their primary economic engine, the recession is not defined by headlines on Wall Street. It is defined by the quiet disappearance of the businesses that once processed, serviced, and supported the crop.
Alan Bjerga of the National Milk Producers Federation discusses the Dairy Margin Coverage program, recent improvements, and what producers need to know ahead of this week’s enrollment deadline.
The Ranger Road Fire in the Oklahoma Panhandle is now 65% contained after burning nearly 300,000 acres over the past week. Kevin Charleston of Specialty Risk Insurance Agency discusses wildfire recovery, livestock insurance considerations, and the importance of preparedness for producers across the Southern Plains.
Cotton jassid, a invasive pest, is raising concerns for Southeast cotton growers as experts work to understand its impact this season.
Higher output keeps milk supplies ample, reinforcing expectations for softer dairy prices even as feed costs remain favorable.

LATEST STORIES BY THIS AUTHOR:

Lori Stevermer with the National Pork Producers Council reacts to the USDA’s speedline proposal, the new Farm Bill’s fix for California’s Prop-12, and other policy developments impacting the pork industry.
Weskan Grain CEO Will Bramblett discusses the antitrust lawsuit filed by grain farmers and agribusinesses, and its potential implications on rail competition and market access.
RealAg Radio host Shaun Haney shares insight into Canada’s trade push in Mexico and what it could signal for agriculture and the USMCA moving forward.
Lawmakers request information from CEO Scott Stump over sponsorship concerns and potential implications for the organization’s nonprofit status.
Roger McEowen with the Washburn School of Law reviews key highlights from the House Agriculture Committee’s latest farm bill proposal.
Ethanol output is improving, but weak domestic demand and export headwinds temper optimism about corn demand. Renewable Fuels Association President & CEO Geoff Cooper discusses the latest developments on Federal approval of year-round E15.