Financial
Farm financing is critical to the success of any agricultural business operation. In this section, uncover information on agribusiness finance management, including budgeting, financial life skills, planning, value-added production, and pricing. Learn valuable tips and gain access to the FarmSense workshop and online course.
Agribusiness Budgeting
In agriculture, budgets are an important part of setting financial goals and measuring performance. Enterprise and partial budgets are two of the more valuable farmers finance tools utilized to establish a foundation for analyzing various management decisions.
Enterprise budgets refer to the estimates of receipts, costs, and profits from agricultural production. They are often used to create whole-farm budgets to estimate the profitability and resource requirements for a farm plan. Enterprise budgeting is also used in projected cash flow budgets, as well as during the process of selecting and analyzing the enterprises produced on the farm.
Partial budgeting serves as a planning and decision-making framework that is typically used to compare alternative management decisions’ costs and benefits. It focuses on the changes in income and expenses resulting from implementing an alternative. Learn how to create a partial budget and analyze its results during the Partial Budgeting online course.
Join Penn State Extension’s FarmSense workshop for detailed information on financial statements such as the balance sheet, income statement, and cash flow statement. Participants will further be provided with practical knowledge on organizing and using financial records to make informed agribusiness finance decisions. Additional resources to explore include the Penn State Farm Management Handbook and the Pennsylvania Farm Account Book.
Business Financing: Farm Loans and Farm Grants
Careful planning, along with understanding the financial resources available, is fundamental for successful farm financing. Numerous commercial lenders loan money to farmers and other agribusiness professionals who wish to fund an operation. To obtain a loan, it is generally required to develop a relationship with the bank and provide comprehensive documentation showing your ability to repay the loan.
When applying for agriculture loans, small-scale and part-time farmers can improve their chances for success by following sound management practices. These include budgeting cash flows, preparing financial statements in advance, and treating the lender as a valuable asset.
Many first-time borrowers, as well as agricultural operations that have been rejected by other lenders, are directed to the Farm Service Agency (FSA). The FSA has several different farm loan programs, offering support for land purchases and operating costs. The agency can also guarantee loans made by other institutions.
Farm grants are available; however, few do not require a research component. It is worth noting that careful research is needed to determine whether the grants listed are awarding funds at the time. Remember to contact the granting agency before completing the application process.
Farmers and growers can also apply for a research grant via the Northeast Sustainable Agriculture Research and Education (NE-SARE) program. The program provides assistance and sustainable agriculture grants for farmers wishing to initiate on-farm research.
- Tools and Apps
Trellis Construction Workbook
This tool will assist growers with the decision making process of determining the cost of two trellis systems. - News
4 Tips to Financially Prepare for 2024
Date Posted 1/24/2024As a small business owner, often times you’re filling many job titles. These 4 tips can help you make small changes to feel more confident in your business's health. - Webinars
Know Your Numbers: Applying for Financing
Length 30 minutesAttend our lunchtime webinar for tailored tips on crafting strong financial statements, ideal for entrepreneurs seeking financing, to grasp key metrics that lenders seek when evaluating your application and positioning your business for success. - Online Courses
$299.00
Farm Sense
Sections 4Length 14 hoursLearn to create a cash flow statement, balance sheet, and income statement for agricultural businesses. Meet Farm Service Agency borrower training requirements. - Articles
Potato Production
With many varieties and high consumer consumption, potatoes fit well with many small growers and can be marketed through various outlets. - Articles
Financial Lessons Learned from a Former Beginning Farmer
Many moons ago I was given the advice to "learn from the mistakes of others—it's too expensive to make all the mistakes on your own!" As a beginning farmer, I made more than a few mistakes. Here's an opportunity to learn from my mistakes. - Articles
Developing a Business Plan
An important task in starting a new venture is to develop a business plan, which is a "road map" to guide the future of a business or venture. - Articles
Food For Profit: Price and Pricing
There is a difference between price and pricing. Each method has own advantages and disadvantages. - Articles
Food for Profit: Price and Pricing Worksheet
This worksheet is a supplement to the Food for Profit: Price and Pricing article. - Articles
What's the Difference Between Markup and Profit?
Understanding the difference between markup and profit margin is critical to the success of your business. - Articles
Enterprise Budgeting for Small Farms and Homesteads
Creating a budget can be a valuable experience not only for folks who are raising crops or livestock for profit, but also those who are homesteading. - Articles
Obtaining a Loan - The C's of Credit
One of the biggest questions a new grower faces is where and how to get loans for business start up. - Tools and Apps
Organic Grain Crop Enterprise Budgets
Customizable spreadsheets will assist organic grain farmers to estimate profitability and document management of a 3-year crop rotation. - Articles
An Introduction to New Generation Cooperatives
New Generation Cooperatives shift the focus away from selling a commodity to offering a value-added product. - Articles
Food Entrepreneurs
Are you looking to start a new food business? Are you an existing business looking for information on how to maximize your profitability? - Articles
Calculate Costs for On-Site Electricity Generation
This article applies to those farmers who buy fuel oil or gasoline to run their on-site generation equipment. - Articles
Operations Research Tools (Stage 3: Re-allocation of resources)
You've recognized that your company is suffering from a disadvantaged business or operational model. Learn how to properly re-allocate your resources. - Articles
Operations Research Tools (Stage 2: Re-prioritize your Goals)
Re-prioritize your operational goals based on the relationship between current market conditions and your evolving vision for the business. - Articles
Is Your Company in Double Jeopardy?
Your company could be a victim of the phenomenon of double jeopardy. - Articles
Pricing Your Poultry
Small-scale poultry producers who market their products directly to the consumer sometimes find the ever increasing prices of inputs, particularly the cost of feed, a challenge. - Articles
The Economics of a Transport and or Delivery Business
Adding farm product delivery services gives you the ability to sell and take farm products directly and conveniently to your customers. This article outlines the economics involved, and how to price delivery and hauling services. - Articles
What is "Business Management"?
The basic resources at the manager's disposal are land, labor, capital (buildings, machinery, equipment, livestock, cash, credit), and management. - Videos
USDA Whole Farm Revenue Protection
Length 9:40USDA Whole Farm Revenue Protection (WRFP) benefits diversified crop and livestock farms, insuring all products' combined revenues in one policy. - Articles
Farm-based Bed and Breakfast
There is a significant and growing interest in B&B's by farm owners exploring options to diversify their product offerings. - Articles
Climate Change and Fiscal Sustainability
Are you aware of the conservation and risk management programs available to your farm?