Why are advisors important for my farm business?
So, why are advisors important to your farm? Three key industry players share their reasons.
As a full-time rancher, I’m primarily focused on the well-being of my animals on a day-to-day basis. However, between my husband, myself and our staff, it’s always busy. It’s why we enlisted a veterinary services company in a neighbouring town more than 15 years ago to help us maximize herd health.
By paying a flat per-head fee, we have the peace of mind that our vet consultancy and our integrated data management platform will capture every vital detail we need. Whether it’s 4 a.m. or 4 p.m., we have a 24-7 agreement with our veterinary team. The peace of mind and security this affords us can’t be overstated, especially during important times such as replacement female selection or calving.
One of the best qualities about our advisors is how they leverage their expertise beyond what we may know. Our veterinarian isn’t stuck in neutral. He routinely takes new courses and cutting-edge training, and transfers that knowledge directly to us to drive productivity and herd health. Not only that, our advisor is also well-versed in the data management software we use. This helps if they need to review, analyze or interpret data. With everyone in sync about every aspect of the ranch, it’s a win-win. This helps our ranch in every measurable way, guaranteeing we are being as efficient as we can be throughout the year.
The beauty of our veterinary advisory team is how intricately they know our animals, their history, our operational practices and all other pertinent data going back more than 15 years.
Blind spots exist in every industry across the country, including agriculture. To receive a true, unbiased understanding of those risks and liabilities, it helps to enlist a trusted third-party advisor.
When we discuss money matters, it’s important to remember that unless you also double as an accountant or financial planner, outside viewpoints can be helpful. For one, they come with no emotion, so the response is both genuine and unbiased to give you the best solution, not the one you like the most.
Income tax laws are not for the faint of heart and they change as often as the weather. Because it would be nearly impossible to run a farm and keep up with all tax-related changes, it’s easy to miss a step or not realize a rule changed. If steps are missed or neglected, it may invalidate a multi-year strategy.
You are the expert on your farm business, so lean on your strengths. Let someone else who knows tax, law — or any other area you require assistance in — help you. They live that every day the same way you live production.
Many of us believe because we have a clear plan down on paper, it’s rock solid. How well will that hold up in a court of law? You never want to be in a position where you work your entire career limiting tax, then end up backed into a corner with no options because a third party was not brought in.
The best part about farming is perspective. We often share it with our family, friends and neighbours. Ultimately, there is room for the perspective of a third party as well, one who may help you view transactions, issues or long-term plans with fresh eyes.
Many people are concerned with affordability when they have prospective land to purchase, for instance. But this can’t be the only factor. Does it fit into your long-term plans? What will this purchase do to your borrowing power? What is fair market value? With a third party, there is a chance to look into the nuances.
To purchase land you rent for $60 an acre seems great in principle, but once you factor in total borrowing, interest and principal, the number could be upwards of $160 an acre. Talk with an advisor and find out what loan structure options are available, such as laddering and hedging interest rate risks.
Most farmer operators seek third party advice for financing requests, and obviously that is of critical importance, but if those same people get more details – future plans, an upcoming farm transition or business diversification – your success can be accelerated. Don’t settle for just yes or no; make sure you understand the decision.
Third-party advisors want the same things for your farm that you do: profitability, long-term sustainability and recognition that you can go far by yourself, but even further when you work with your advisors.