I
S tfeTr
F
A
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MANAGEMENT
What Is Your Lender
Thinking Of The Drought?
This may not be your burning
question of the hour due to the
drought in progress. But, by this
time next year, it may be critically
important because of all of its
ramifications.
NOW is the time to meet with
your lender and discuss your pre
sent livestock productivity goals,
future cropping needs, feed and
machinery purchase plans, along
with the total financial health of
your operation. I’m sure your
banker is very concerned about his
large investment in your operation.
NOW is an excellent time to
prepare a balance sheet so that,
once all the drought’s effects have
impacted you, you can visually
Whose Mft Is h Anyway?
Alan Strock
show your lender how much the
dry weather cost Talk to your len
der about setting up a flexible
repayment plan that will give you
freedom to make extra payments
or miss a month or two when cash
flow is tight. Also, talk about mov
ing some of your current debt to
intermediate debt as a last resort.
But remember the lender is still
most concerned about your repay
ment ability, especially your cur
rent cash flow, but he knows
droughts cause problems.
So what can you do to improve
your financial position? Now,
while cash flow has not been
severely affected by the drought,
try to pay off as much short -term
If you're not in RCMA
you're noti n control.
You’re up early, and you work long hours That’s part of dairying. We all know
that. For too long another part of dairying has been .that farmers have not had
any say in pricing their milk. That may have been okay a few years ago when
the government-supported price was enough to make a living on, but now
prices have dropped through the floor And they’re expected to keep falling
Haw a say in what your
blood and sweat is worth.
Right now, dairy farmers have an opportunity to gam a say in establishing a
fair price for milk Some milk dealers want you to leave pricing strictly to them
They want you to believe they have your best interests in mind Think about it
Their businesses come first, and they’ll pay only as much as they really have
to for your milk RCMA premiums will be here tomorrow, month in, month out
Not just for as long as some milk dealer thinks they should be Want to gain
control of your milk?
Call 1-800-634-3723.
debt as possible. Pay down that
line of credit, pay off that operat
ing loan, and maybe even pay off
early that machinery piece that
only has a couple payments left
The current liabilities you free up
now will probably be available
later for feed purchases and next
year’s cropping input needs. If you
don’t have a line of credit see your
lender about opening one, it’s nor
mally quite simple.
If you have one and have never
abused it, then see if your lender
will increase the upper limit so that
you can take advantage of feed and
crop input volume discounts and
harvest “bargains” if any occur
near you. If prices continue to rise,
buying your grain and forage
needs now for the winter may be a
wise use of the line of credit. That
interest expense may be much less
than the increase in price of that
grain or forage that you’ll need
later.
You may also want to look into
consolidating some of your loans.
Some of those old loan interest
rates may be higher than those
available today, and its easier to
talk to one or two lenders than to
five or six. Machinery company
loans especially should be paid off
by a local lender. It’s easier to talk
to the person across your kitchen
table than someone on the phone a
REGIONAL COOPERATIVE MARKETING AGENCY
26 Harvester Avenue ■ Batavia, N.Y. 14020
Lancaster Fanning, Saturday, July 16. 1988-A23
thousand miles away who may
have heard the same story twenty
times before.
Acquiring new intermediate or
long term debt now can be
extremely fatal. NO additional
debt should be taken unless it
IMMEDIATELY improves your
cash flow. Also remember in times
of high feed prices that adding five
sows, cows, or ewes may not
improve your net cash flow.
So what can you do now or in
the near future to improve your
cash flow? Carefully cull your
breeding herd. This is not the year
to carry nonproductive females in
your herd. Set culling standards
that eliminate all unprofitable
units, this means you must have
accurate current costs of produc
tion. Get rid of those problem
breeders, those health nightmares,
and those females that have great
bloodlines but haven’t proven
themselves yet.
This may also be the year to sell
your crops and not feed them to
your cows, sows, steers, or sheep,
and to look for more energy and
protein cost efficient feeds. What
ever livestock enterprise you have,
this is the year to try different
rations and formulate a least cost
ration to which your animals
respond. You may have to settle
for feed efficiency, growth rate, or
milk production levels less than
you are used to, but your bottom
line may still be better. In other
words this won’t be the year to
reach new levels of productivity,
but will be the year to strive for
new levels of efficiency. One last
item is to really look at your
machinery inventory. This may be
the year to sell that combine, corn
planter, com picker or tractor that
only gets used one week a year and
to have the work custom done.
Custom work may benefit your
cash flow this year.
In other related areas, listen to
see if your county is declared a dis
aster county. This may make you
eligible for FmHA low interest
loans, and you may be able to
harvest hay on your conservation
reserve ground. Also, don’t plan
on any 1988 deficiency payments
as com will surely stay above the
$3.03 target price. Also, the Exten
sion offices of Lancaster and Ches
ter Counties will be holding meet
ings on feeding during shortage of
home grown forages and grain,
controlling your feedbill, and the
use of pasture.
Agri-Tuf Bag ,M
(10 per case)
All bogs art 1
4 5 mil thickness
“A" 53" dia. x 126" “C” 66" dia. x 150*
1-9 cases $38.75 ea. 1-9 cases $57.80 ea.
10 or more $36.80 ea. 10 or more $54.90 ea.
“B" 59" dia x 132 " “D” 72 " dia x 150"
1-9 cases $45.95 ea. 1-9 cases $63.30 83.
10 or more $43.65 ea. 10 or more $60.20 ea.
Agri-Tuf Super Ties'"
25 per pack $7.00
A fine way to pul up round hay bales in early
spring or late summer, or whenever hay drying
is a problem By cutting your hay and only
drying it down to approximately 70% to 45%
moisture, the leaves and protein and
cut drying time It wilt be off the ground before
the next rain So consider the “Agrf* Tuf Bag '**
the next time you cut down quality hay
hir brat rraulta Bag (hr same day
it is baled Avoid Hitting on sharp
stones or stubbies Keep bag sealed
(or at least 3 weeks before opening
to give hay time to ferment
Fast UPS Service
Sleeves & Covers Also Available
Dealer Inquiries Welcome
'Silver Creek Supply]
Prices F. 0.8. Port Treverton, PA • 717-374-8010
RD 1 Bo* 70 • Port Treverton, PA 17864