New Year’s resolutions for agriculture
The New Year is a time to reflect and review – and that goes as much for your business as any other aspect of your life. That’s why NAB is encouraging farmers and those beyond the farm gate to spend some time now planning for 2013.
The New Year is a time to reflect and review – and that goes as much for your business as any other aspect of your life.
That’s why NAB Agribusiness is encouraging farmers and those beyond the farm gate to spend some time now planning for 2013.
Khan Horne, NAB’s General Manager of Agribusiness, says 2012 was a good year in most parts of the country and for most industries.
NAB’s latest forecasts for 2013 show it shaping up to be a pretty solid year, with a reasonable production and price forecast for most commodities, despite the continuing strength of the Aussie dollar.
“Even in good times though it’s important for business owners and managers to have a fresh look at goals, forecasts and strategies on a regular basis,” Mr Horne said. “In fact, sometimes it’s easier when the pressure is off and you have the space to take a step back and plan where you want to take the business.
“This is a great time of year to do that – New Year’s Resolutions for your business, if you like.
“A good relationship and regular contact with bankers, accountants, farm consultants and other advisors will help the process, allowing you to draw on their specialist knowledge and insights.”
Khan offers the following tips as a starting point:
- Review your cashflow forecast with a best and worst-case scenario and work out if you have reserves or need to borrow. If you have extra cash, consider how long you can afford to lock it up and whether a farm management deposit (FMD) is an option. If you need finance, plan the timing and amount of repayments to best match expected cashflow.
- Start planning now for how to handle future challenges, both financially and in terms of storing feed and other preparations.
- Consider diversifying assets outside the farm gate, as the ups and downs in shares and property are often counter-cyclical to farm receipts.
- Develop a succession planning strategy, to manage unexpected events as well as to pass on the farm to future generations – no matter how far in the future that might be. Ongoing open and honest family discussions can save an enormous amount of difficulty.
- Protect your assets, including yourself, by taking out adequate insurance cover.
- Manage risk by investigating strategies to hedge or use other options to protect against interest rate, exchange rate and commodity price movements.
- Talk to your accountant about the tax implications of the year to date. Don’t wait until June or you may limit your options.