The Blindside

No not the Hollywood movie, but the way prairie farmers have been blindsided by these late spring
frosts.

I haven’t done the research, but it’s fair to say that we’d be hard pressed to recall a year when we’ve
had such a string of days where the daily low temperatures are well below freezing. Word has it that
farmers in many areas now are beginning to prepare for reseeding.

Show of hands: how many built reseeding into their 2015 crop plan? I didn’t think so. How many of you
who are reseeding are rejigging your budget and projections? It better be all of you.

It’s not just the extra cost of seed, fuel, wages, etc. It also means later emergence and maturity which
will impact yield, and maybe quality. For how challenging it has been to deliver grain in the last few
years, if late maturity means you now cannot deliver off the combine in August or September as per
your contract, will you be forced to wait until December, or even March? Have you considered how this
could impact cash flow?

Don’t get lulled into oversimplifying the adjustments to your projections. It’s easy to just add in cost for
more seed. But a couple bucks an acre here for labor, and a couple more bucks there for fuel on the
extra pass add up. And I don’t know of too many 2015 projections that have much wiggle room.

Direct Questions

Have you provided realistic amendments to yield and price projections based on reseeding dates and
rates.

Have you considered how the later seeding dates due to reseeding will affect your new crop delivery
opportunities, and therefore, your cash flow?

Do you have sufficient working capital to get through this unplanned extra cost?

From the Home Quarter

Anyone who is dealing with Mother Nature’s blindside string of frosty nights will be significantly
impacted in all 3 critical areas of their farm: production, marketing, and financial management.
Consequentially, the other critical areas of your business will also be affected: family, wealth, and
potentially your health.

You must, at your very first chance, update your projections for 2015 with realistic and conservative
information. And for goodness sake, let your lenders know ASAP, not just next spring when you’re doing
your annual review.

This bolsters my argument for strong working capital. Every farm, your farm, is at risk of a blindside
attack at any time from a variety of sources. Adequate working capital is the best way to ensure you’ll
get through it.
If you’d like help establishing strategies to ensure you build adequate working capital,
then call me or send an email.