November 2017
The Business of Farming

Looking Back to Plan Forward

Using the Five R’s to Start Planning for Next Year

The 2017 harvest isn’t complete but we find our thoughts looking ahead to 2018. Is it too early to be thinking about next year? Not really, but before we get too far ahead of ourselves, there are a few things we need to do for our operation to properly finish this year. Review, rewind, renew, repair and reward. Investing some time and thought in these five R’s will provide a great start to next year.

First review the year. It’s easy to look back and think in general terms how the year went. Calling it good, bad or a mixed year is easy, but you need an honest and detailed description of the good, bad and ugly from the beginning of the year. Think about the weather conditions before and during the growing season and at harvest – not only for your area but across the state, region and nation. Was there an early warmup, a late cold snap, or periods of too much or too little moisture? Make notes of not only extremes but ordinary weather events as well. Were you able to plant crops early, late or on time? How were your fields and pastures compared to previous years as far as moisture, fertility and weeds? Did past problems seem better or worse? Did your equipment have or cause any problems? Are there any new concerns you want to watch? Once you have thought about these, write them down and save it. Ideally, you have made notes throughout the year, but now is the next best time for this task.

Next, it’s time to rewind. This goes along with the year in review but takes it a step further. If you could start the year over, what would you do differently and why? Is there more or different information that would have aided you in making a better choice? If so, is it something you can get? Knowing what additional information to collect will give you a jump-start in your decision making for 2018.

Renew is next. Renew can take several avenues. Let’s start with credit renewal because almost all other aspects of your operation depend on money. Talk with your credit source(s) about your situation and your year – whether it’s good or bad. Share the review and rewind thoughts you’ve put together as well as tentative plans for next year. Even if you aren’t ready to talk about specific loan amounts, communication with your lender will help everyone involved.

Land rental agreements need to be renewed as well. How did the terms of your current arrangement work for you and the landlord this year? Is it fair to both parties? Evaluate your situation and consider not renewing marginal, inconvenient or fields that are far away. Keep in mind you are making a business decision. There are still a large number of rental agreements that are oral or done with a handshake. It is recommended you have a written agreement for the benefit of all parties, and this is a good time to consider putting any unwritten agreements in writing. Communication with your landlord is needed so everyone understands your decisions and why you made them.

Repair is another undertaking that needs to be handled. Repair and maintenance not only helps extend the life of your equipment but will also help you avoid potential problems in the future. Take time to thoroughly inspect each piece of equipment and evaluate it. Are downtime and repair expenses getting to be too much for a particular piece of equipment? Could a new or new-to-you piece of equipment save time or money? If you invest in machinery, make sure it’s a good investment. This may also be a good time to start planning and budgeting for future investments a year or two down the line.

Reward yourself. Hopefully, there will be monetary rewards for your efforts, but you should make an effort to do something for yourself and those close to you who have supported your farming operation throughout the year. It’s important you take time to unwind and step away from the everyday stress of running your operation. Again, this doesn’t have to be big – but something you enjoy for a mental break.

A new year will be here before we know it. Make sure you complete 2017 with a strong finish by doing your review, rewind, renew, repair and reward.

 

Max Runge is an Extension specialist with Alabama Cooperative Extension System.