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Scrutinize cash flow and ensure you're ready for changing rates in the future.
Gaining a lasting benefit from high prices may involve knowing where you are today and proceeding cautiously.
With prices for grains and oilseeds at multi-year or all-time highs, Canadian crop producers now have financial options that weren’t there 12 months ago. That’s great today but could cause headaches tomorrow.

“The first thing is to be careful,” says Coralee Foster, an accountant with BDO Canada who also farms near Mitchell, Ont. “It’s easy to see that revenue per acre is up, but for example, land rent in this area is $300 to $400 per acre, which can be difficult to cash flow even at the best of times.”

For a producer inclined to think about managing risk first and foremost, 2021’s anticipated strong cash flow can be put to use in many ways. Foster recommends starting with a clear idea of your current financial situation, how that’s been trending the past few years and how this compares to similar farming operations.

If your current situation and industry position aren’t what you’d like, today’s high crop prices will be most welcome.

“If working capital has been a challenge in recent years, this could be a good time to build up some cushion,” says Foster. “These prices aren’t likely to continue indefinitely, and costs could keep on rising. Giving yourself some wiggle room for the next few years might be a good idea.”
Episode 53: Creating Data-Driven Profit Decisions
Episode 57: Managing Currency Risk at the Farm Level
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Tell us where you want to take your operation and we’ll help you get there.
Learn more about risk management.
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