September 2017
The Business of Farming

Liikatchka Plantation

Managing the Business, Not Just the Farm

 

The Corcoran family knows that financial management of their farm is an important part of making a sustainable profit.

Ask a farmer what they do for a living and I bet their answer wouldn’t be that they own a business. For most producers, farming isn’t just a job, it’s a passion and a calling. More times than not, it’s a way of life for the entire family. However, at the end of the day, farming is still a business that has to make a profit to be sustainable. To keep the farm profitable, the financial side of the operation cannot be neglected – even in the middle of all the fieldwork. There is no shortage of material available to farmers on how to plan and manage for profitability. All of this information can be a valuable tool for producers, but nothing beats seeing how other farms have made business management practices work for them.

Liikatchka Plantation, a family farm in central Alabama along the Alabama-Georgia border, is a row crop and cattle operation managed by brothers Tom and Walt Corcoran, and their nephew, Liston Clark, with assistance from Joe Corcoran, Tom’s son, and Cody Young, Walt’s son-in-law. Like any family, everyone has a particular strength that the Corcorans use to their benefit on the farm. Each partner has a specific area they handle from a production standpoint. Walt’s daughter, Cassie Young, is in charge of keeping and balancing the farm’s books. If you ever have the opportunity to speak to them or visit the farm, their knowledge of their land, the crops they are growing and how to manage those crops is impressive; more impressive to me is that financial management of the farm isn’t overlooked as a vital part of routine operations.

From the viewpoint of her role of bookkeeper, Cassie says it is important for her to designate a day to record transactions and pay bills. Just as it’s important to stay on top of things in the field, it’s just as important to keep records up-to-date and in order. At the end of the year, the farm’s accountant provides a great perspective on the financial status of the farm, but keeping current and complete books on the farm allows everyone involved to be aware of current operating expenses and cash flow issues, as well as making the work of the accountant more thorough, accurate and complete.

As for major financial decisions, nothing is done on short notice at the farm. Equipment and other major expenditures are usually decided on by the group at the end of the year after the books are done and they’ve had a chance to evaluate where the farm stands. It sounds simple, but how often do we make purchases that are a good deal or we’ve justified the need for without actually sitting down and looking at what is coming in and going out of the bank account?

All farmers know that, like any business, there are financial risks in farming. As we’ve seen in the past five years with the fluctuation of high commodity prices of 2012 to where we are today, the market can change relatively quickly. Effectively managing for downturns in agriculture can mean the difference between surviving the storm and closing shop. To make it through these downturns, Liikatchka Plantation has included diversity on the farm, as well as a proactive mindset. The farm works closely with every available resource such as U.S. Department of Agriculture, Extension and ag-industry representatives to stay current with new technology and management practices in order to maximize yield and make a profit.

There are roughly 44,000 farming operations in Alabama, and I’d argue that many of these are successful at the production side of farming from the standpoint that they know how to plan for and manage the crops they are producing. The same holds true for Liikatchka Plantation; however, they also have a plan for managing the finances of the farm. That makes them a successful farm AND a successful business.

If you’re hoping to improve the financial management of your own farm and would like guidance or more resources on business planning, feel free to contact your local Extension office or a member of the Farm and Agribusiness Team.

 

Jessica Kelton is a regional farm and agribusiness management agent for ACES.