Here we are on the upward swing of the commodity price cycle roller coaster.
Time to take a deep breath — yes.
But . . . it isn’t time to snooze. Big decisions must be made, and strategic planning should be on your mind.
Insights on dairy loans
Milk price forecasts for 2020 are optimistic, and the reports from the Federal Reserve covering the second and third quarters of 2019 show encouraging signs about farm financial conditions, at least in Wisconsin. For the first time in many years, most agricultural lenders in the dairy state reported improving rates of loan repayments. They also reported higher farm capital spending. This is to be expected for dairy farms across the U.S.
With improved milk prices, improving financial positions, and still relatively low interest rates, 2020 might be a prime year for strategic investments. With farm expansion and consolidation, changing consumer demands, and new technologies such as robotics and monitoring systems, the dairy farm landscape and the dairy markets are changing fast. As a result, if you find yourself in an improved financial position, there is no time to sleep on it. It’s time to think about where to position yourself within that evolving landscape.
Your dairy future
Changes mean risk, but they can also mean opportunities. Opportunities to invest, to grow, to improve, or to diversify. To minimize risk and maximize opportunities, proper strategic planning is a must. Laying down a long-term strategy and goals, collecting information, analyzing, and budgeting are all part of the journey.
To help you in that process you can find useful allies around you, including trusted peers, lenders, financial consultants, and extension services. If you want to get the most out of 2020, you should think strategically.