Webinar: Cash Flowing to the Other Side of COVID-19 (July 9, 2020)
With Kevin Bernhardt, University of Wisconsin-Madison Extension, Center for Dairy Profitability.
Dairy producers had suffered 4 1/2 years of low prices, had just peeked out of the clouds in late 2019 with better prices only to be hit again with falling prices due to the shutdowns resulting from COVID-19. With that history, many producers were faced with potentially tough conversations. A series of articles was written for Progressive Dairy that challenged dairy farmers to consider what camp were they in - Long-Haulers, Guardian-Transitioners, or On-the-Fencers. For the Long-Hauler group, the short term management challenge was cash flow.
icon search Searchable Transcript
Toggle between list and paragraph view.
[00:00:37.980]Robert Tigner: Got about a minute past noon. And one thing I learned as growing up on a dairy farm and dairy farming is
[00:00:48.810]Robert Tigner: You start on time.
[00:00:51.360]Robert Tigner: So good afternoon. I'm Robert tickner an extension educator and Ag systems economist and the Department of Agricultural Economics
[00:01:01.020]Robert Tigner: At the University of Nebraska, Lincoln, on behalf of the Department. Welcome to our webinar today. Today is part of a weekly series of webinars produced by our farm and ranch management team. You can find recordings of these sessions a schedule of upcoming webinars and other firstname.lastname@example.org now.edu
[00:01:24.390]Robert Tigner: One of the resources that we would like to highlight is the Nebraska rural response hotline in times of stress, knowing when to reach out is essential.
[00:01:36.270]Robert Tigner: The Nebraska rural response hotline can provide mental health counseling information regarding legal assistance financial clinics mediation and more
[00:01:47.790]Robert Tigner: The hotlines a toll free number is 1-800-464-0258 in addition to a wealth of resources related to stress or wellness can be found at rural wellness dot you and l.edu
[00:02:07.440]Robert Tigner: During today's webinar, you are welcome to ask questions in the chat box located on the bottom of your screen. We will address those during the Q AMP a period at the end of the presentation.
[00:02:21.180]Robert Tigner: Today's topic stems from the current pandemic and was originated with dairy producers in mind dairy producers had suffered four and a half years of low prices.
[00:02:32.700]Robert Tigner: Had just peeked out of the clouds and lake with better prices, only to be hit again with falling prices due to the shutdowns resulting from code 19
[00:02:45.000]Robert Tigner: Many producers were faced with potentially tough decisions include including dumping milk, the thousands of pounds of milk did get dumped in was never processed.
[00:02:58.380]Robert Tigner: A series of articles was written for progressive dairy dairyman that challenge dairy farmers to consider what camp. They were in long haulers guardian transition owners or on the fencers for the long haul, or group, the short term management challenge with cash flow.
[00:03:18.600]Robert Tigner: presenting today is Kevin Bernhardt who has a split appointment that is 50% University of Wisconsin extension with a center of dairy profitability and 50% teaching
[00:03:31.890]Robert Tigner: In agribusiness at the University of Wisconsin Platt bill is extension and teaching efforts are in the area for management, particularly for financial and marketing management.
[00:03:45.480]Robert Tigner: Kevin grew up in north central Iowa and it has a bachelor's degree from Iowa State masters from North Carolina State and a PhD from UL
[00:03:57.450]Robert Tigner: So Kevin Welcome to a URL. Again, welcome back.
[00:04:02.130]Robert Tigner: And
[00:04:03.960]Robert Tigner: We can start sharing your screen and
[00:04:08.490]Robert Tigner: Head through the webinar.
[00:04:11.250]Kevin Bernhardt: All right. Thank you, Robert. And it is a nice to be back with the Nebraska crowd, even if it is by distance, I would like to
[00:04:20.220]Kevin Bernhardt: I would like to change that sometime and be back there in person. We my wife and I thoroughly enjoyed our time we spent in Nebraska and we love every chance we get to go back that way. Let me get my screen going here first, before we get started.
[00:04:45.420]Kevin Bernhardt: Okay, you should all be seeing a PowerPoint.
[00:04:50.520]Kevin Bernhardt: That showing cash flow budgeting at the top. So if that's not the case. Robert or Ryan, let me know. But I think we should be there.
[00:04:57.540]Robert Tigner: You're good to go.
[00:04:58.470]Kevin Bernhardt: We're good to go. All right. Thank you.
[00:05:02.280]Kevin Bernhardt: Yeah, this, this is
[00:05:04.110]Kevin Bernhardt: This presentation today is on cash flow budgeting primarily
[00:05:08.190]Kevin Bernhardt: But I wanted to take you back a little bit as to what some of the motivation was for this. Now, we've been doing cash flow budgeting, of course, for forever and fire management. I happen to think that probably that is a tool that is underused
[00:05:25.140]Kevin Bernhardt: underused by by farm business managers as well as maybe sometimes even lenders as well. But I think it's an underutilized tool. It's especially an underutilized tool when we have stressful periods in profitability, like the dairy industry has had
[00:05:43.710]Kevin Bernhardt: Robbed Robert in his in his introduction mentioned that if you're not familiar with the dairy industry as much as some other kind of commodities. Let me give you a rundown quick there the dairy industry had low prices going. We had a great year in 2014
[00:06:01.200]Kevin Bernhardt: And that was the end from on. We had a a very low price period doesn't mean there wasn't people who made money there's
[00:06:10.410]Kevin Bernhardt: There's folks on both sides there, of course, but there was a lot of operations that were very challenged in profitability during those years because of low prices, was it was expected at first because every commodity is cyclical
[00:06:25.920]Kevin Bernhardt: We knew we were going into that low price part of the cycle. The problem is we never came back out of it and and went on and on and on and on until we got to about the end of
[00:06:37.440]Kevin Bernhardt: When we finally hit some good profitable prices in november december of 2019 at about the same time we started hearing news clips about this virus in China.
[00:06:50.970]Kevin Bernhardt: And of course we all know the rest of the story there. And I think all of you see see me and you can see that I'm in my my son's spare bed or in my spare bedroom, which our son used to have. And that's where life is taking place now for a lot of us in the education realm, at least, and
[00:07:12.870]Kevin Bernhardt: You can tell it's my son spare room by the way up there in a corner is is the w that he put on the wall with with tape for his cheering for the Wisconsin badgers
[00:07:25.890]Kevin Bernhardt: But anyhow, the dairy producers went through this tough time just just coming out of it. And now back into it again with coven 19
[00:07:36.390]Kevin Bernhardt: Now if you've been following the dairy prices is all that was a V shaped recovery as well. So we've had a tremendous recovery and prices, especially in the nearby months but in the out months as well.
[00:07:50.220]Kevin Bernhardt: I had a reporter call me just yesterday and said, What does this mean for the fall for the rest of the are these prices going to stay there all man.
[00:07:58.920]Kevin Bernhardt: Who wants to answer that question right now. It's not a risk anymore. It's uncertainty, we just really have no no s probability of what could possibly happen there. So we have to be prepared for everything. So anyway, this led to
[00:08:17.070]Kevin Bernhardt: This idea for this series of articles.
[00:08:20.730]Kevin Bernhardt: Based on the fact that in the dairy industry in particular, but other industries as well, some farms. We're going to be facing some tough conversations
[00:08:30.300]Kevin Bernhardt: Lot of profitability pressures, not only from the virus, but also previous to that in the case of dairy.
[00:08:38.340]Kevin Bernhardt: What is it mean what what camp might a farm operation find themselves in. And we came around to this idea of these three different camps.
[00:08:49.710]Kevin Bernhardt: The first one is the long hauler and the long hauler is someone who's been in this industry for a long time there someone who believes that there is profitability in their operation. They have the kind of production, they have the kind of infrastructure.
[00:09:07.890]Kevin Bernhardt: They have the kind of efficiencies marketing abilities management abilities etc that they believe they're going to be in this industry for the long haul.
[00:09:17.790]Kevin Bernhardt: They believe they will have some profits in the future and what they need to do is to cash flow until they get to the other side of better profitability and that's what we'll come back to you back to here shortly is this whole tool of cash flow.
[00:09:37.440]Kevin Bernhardt: The second group was the Guardian transition years. This is a group that because of their infrastructure, the age of their infrastructure, maybe their own age.
[00:09:47.700]Kevin Bernhardt: Because of perhaps the scale of their operations. Whatever the reason might be, they are just not a group that is seen long term profitability.
[00:09:59.460]Kevin Bernhardt: Even when prices, get back to a more normal range or even better than normal range, they still would be pressed for profitability and the only thing that they're probably doing at this point is losing equity.
[00:10:13.980]Kevin Bernhardt: And you just don't want to do that forever. You don't want to take the good equity that you have earned and lose it. And so the challenge for this group is how do I protect my equity by transitioning to something else. Now that's something else may be something else in farming.
[00:10:30.570]Kevin Bernhardt: Or it may be a complete exit from the, from the farming industry but whatever it is something somewhat major maybe very major has to change in a strategic way for The Guardian transition or
[00:10:44.850]Kevin Bernhardt: The third group is a group that's on the fence and they may end up being a long haul, or they may end up being a guardian transition or. But at this point, they just don't know.
[00:10:55.800]Kevin Bernhardt: Is the picture shows there they feel like there's alligators on both sides of them and they just don't know which way to go to get off this fence so that particular article
[00:11:06.180]Kevin Bernhardt: Tried to help this group look at ways of analyzing their long term profitability to see which way they should go. Should they try to be a long haul, or
[00:11:16.290]Kevin Bernhardt: Should they be a guardian transition or in transition to something else. So that was the nature of the series of the articles that sure in the dairy a progressive dairy. They're also located at Wisconsin's website as well.
[00:11:33.810]Kevin Bernhardt: If anybody wants those articles certainly feel free to get in touch with me be glad to send them to you.
[00:11:41.670]Kevin Bernhardt: But now let's look at the the result for the long haul, or was I know I can do I know this operation has a potential for profitability.
[00:11:51.060]Kevin Bernhardt: I just need to be able to cash flow and the rest of our time here today we'll be talking about this tool of cash flow budgeting.
[00:11:59.130]Kevin Bernhardt: Now the first thing I would say about cash flow budgets is don't look at it as a financial document. It's not like a balance sheet. It's not like an income statement.
[00:12:08.370]Kevin Bernhardt: Don't look at as a as a financial document rather look at it as a planning document. That's why I like cash flow budgeting so much, not because of the financial information. It gives you, but because it enforces enables that planning function of management really well in my opinion.
[00:12:29.460]Kevin Bernhardt: So what is a cash flow. It is a projected summary of all the inflows of cash that are coming into the operation.
[00:12:37.800]Kevin Bernhardt: And all the outflows of cash and recourse what's left over the key word there is cash so of cash is not exchanging hands, then it does not go on a cash flow budget that's why it is different.
[00:12:52.650]Kevin Bernhardt: Than an income statement. It's not a profit and loss statement, it's not showing you what profits and losses might potentially be is just showing you how cash is coming in and out of the operation. So a couple quick examples. Now I'll come back to these
[00:13:10.530]Kevin Bernhardt: Depreciation does it go on a cash flow. And the answer is no because depreciation is a non cash expense very real expense. I'll submit to you.
[00:13:21.510]Kevin Bernhardt: Especially over time, but it's not cash today so it does not go on a cash flow statement principal payments, whenever you make a principal payment and write out a check for that. That's cash.
[00:13:34.230]Kevin Bernhardt: So it does go on a cash flow statement, but you'll never find principal payments on an income statement principal payments, do not show up on an income statement.
[00:13:44.490]Kevin Bernhardt: But they do show up on a cash flow because their cash accounts payable. I don't have this one up there but accounts payable accounts payable is going to affect an income statement but accounts payable is not going to affect a cash flow because it doesn't go on there.
[00:14:04.080]Kevin Bernhardt: I think a question we always have to ask in farm management ask an answer is, why spend the time. Why spend the time on a balance sheet. Why spend the time on an income statement.
[00:14:15.030]Kevin Bernhardt: Same thing here. Why spend valuable time on a cash flow. And I think there's kind of three primary reasons I'm sure we could come up with others.
[00:14:23.970]Kevin Bernhardt: But the three primary reasons. The first one is the one that's most important to me is it forces the planning function of management.
[00:14:32.130]Kevin Bernhardt: And you'll see here shortly, because I'm going to show you an example of a cash flow. There's a lot of planning that has to go in
[00:14:39.270]Kevin Bernhardt: To just being able to put a cash flow together. You have to know what you're going to be doing for an operation. First of all, how much corner, you're going to grow. How much forger unigram how many cattle, you know, race.
[00:14:50.760]Kevin Bernhardt: You gotta know what inputs, you're going to put into those operations and what the likely price is going to be the cost for those inputs.
[00:14:59.340]Kevin Bernhardt: You have to know how much you think you're going to produce and what kind of price, you're going to get for that production when you go to sell it.
[00:15:06.420]Kevin Bernhardt: You have to know what your labor needs are and how much it's going to cost you. You have to know how much you think you're going to have to borrow and how much interest rates, you're going to have to pay for that.
[00:15:15.870]Kevin Bernhardt: All kinds of planning that goes into just being able to complete your original cash flow. That's a lot of planning period for the operation. So that's a primary and what I believe is the most important reason for why cash flow budgeting is budgeting is useful.
[00:15:37.590]Kevin Bernhardt: Second, secondly, it's a great way to communicate with your lender.
[00:15:42.360]Kevin Bernhardt: In for a couple reasons. One was just the one I just mentioned was the planning by showing that cash flow document to your lender.
[00:15:51.210]Kevin Bernhardt: You are showing your lender as well that you have thought significantly and deeply about what this operation plans to do in the next 12 months.
[00:16:02.850]Kevin Bernhardt: What's your inputs can be what you think the costs are being out. Now, the lender might not agree with you on what you put in there as a cost.
[00:16:09.600]Kevin Bernhardt: Or what you put in there for a price. What you're going to sell things for how much you think you're going to produce, but it gives you something to go back and forth on as to what this operation is going to do this year.
[00:16:23.280]Kevin Bernhardt: So I see that as another big reason for why a cash flow is important. A third reason why cash flow is important is because in times of poor profitability cash is king.
[00:16:37.320]Kevin Bernhardt: You have to be able to pay your bills in order to get to the other side. When you hopefully do have profits. So the cash flow becomes particularly important when you have those times of poor profitability.
[00:16:50.880]Kevin Bernhardt: Cash Flow is not an income statement, we mentioned that there's things that are included on the cash flow that are not included on an income statement.
[00:16:59.640]Kevin Bernhardt: Accounts Payable receivable being those being one of those things.
[00:17:04.890]Kevin Bernhardt: A cash flow does include principal payments. It does include the cash that you pay for a capital asset like a new tractor or whatever that does not go on an income statement. So there they have some commonality, but they are very different as well.
[00:17:21.840]Kevin Bernhardt: In fact, you can cash flow, by the way, very, very nicely while going broke on an income statement. So think about selling capital assets you want to cash flow sell 40 acres of land hundred acres of land.
[00:17:35.040]Kevin Bernhardt: Sell your cows that'll help you cash flow, but it doesn't do much good for your income stream, certainly not for your future income statements.
[00:17:44.850]Kevin Bernhardt: Cash Flow is also not the same thing as an enterprise budgets for some of the same reasons. So I'm going to go through this kind of quickly because I want to get to the meat of this stuff.
[00:17:54.330]Kevin Bernhardt: But if we were to have time to do a little quiz here, I might have you answer these questions my cash flow budget is a positive 75,000 so that means that I've had a profitable year and the answer that, of course, is false because you don't know where that cash came from.
[00:18:12.240]Kevin Bernhardt: Depreciation is a real cost that reflects the loss of value of capital asset due to wear tear and ops lesions house. However, it is a non cash costs. So it should not be on the cash flow budget. And that answer is True to appreciation does not go on cash flow budget.
[00:18:32.760]Kevin Bernhardt: cost of capital asset like a tracker is recognized on the income statement by depreciation, not any principal payments paid for that tractor.
[00:18:42.150]Kevin Bernhardt: That is principal payments are not on an income statement for the same reason. They are also not on a cash flow budget.
[00:18:51.630]Kevin Bernhardt: The answer to that statement is false principal payments are on a cash flow budget because cash is exchanged hands.
[00:19:01.260]Kevin Bernhardt: Okay, this particular slide is probably the most important if you were to walk away with one slide from this presentation. This would be yet.
[00:19:09.900]Kevin Bernhardt: What is the structure of the cash flow and there's kind of, I think there's like eight categories here. So first of all, let's start with the things that
[00:19:19.650]Kevin Bernhardt: Result in cash inflows so I get cash inflow from operations. So as I do things and sell my corn sell my milk etc do custom work. I'm going to get an inflow of cash.
[00:19:32.550]Kevin Bernhardt: If I sell any capital assets, I may get some cash for that. I also may have some nonfarm sources of cash that I'm going to use in the farming operation or use to make my cash flow.
[00:19:45.960]Kevin Bernhardt: Perhaps that's the off farm job. Maybe that's a welding shop that I have on the side, whatever it might be. But if it creates cash that I'm going to use to meet cash flow requirements, then that is a potential source of cash inflows
[00:20:02.670]Kevin Bernhardt: Follow following these inflows or a bunch of outflows I can I have my expenses for seed feed fertilizer fuel, etc.
[00:20:11.580]Kevin Bernhardt: I may purchase some capital assets if I do that, that's going to be cash out of my pocket, not of the operation. I may have some nonfarm cash flows that are paid by the farm.
[00:20:23.580]Kevin Bernhardt: Perhaps a son's car insurance payments for example are paid from farm sources. If so, that goes on the cash flow as an outflow.
[00:20:33.150]Kevin Bernhardt: And I have to do my, I have to pay the bank. So I have to pay my principal and interest payments that are scheduled to be made this year.
[00:20:41.910]Kevin Bernhardt: So after all of that, there's one more inflow of cash and that is new borrowing.
[00:20:49.140]Kevin Bernhardt: So that anytime I have new borrowing that's putting cash in my pocket. It may not be in there very long, but it is a cash inflow, at least for a while.
[00:20:57.720]Kevin Bernhardt: So when I do the adding and subtracting here I end up with my final net cash flow. Now I want to make a point here in a spreadsheet, this is, this is how the spreadsheets broken up by the way is into these categories.
[00:21:10.470]Kevin Bernhardt: On the spreadsheet. I could end up with a negative cash flow, but in life. I cannot
[00:21:17.130]Kevin Bernhardt: There it is, it is impossible to have a negative cash flow in real life, something will give now that something may not be very good for the farm operation, but something will give if I get to the end of a month or end of a year and a quarter, whatever it is.
[00:21:37.080]Kevin Bernhardt: And I have a negative cash flow, so to speak.
[00:21:41.820]Kevin Bernhardt: Then one way that I make it positive or at least zero is I don't pay my bills. I don't pay my loan.
[00:21:50.010]Kevin Bernhardt: Accounts payable goes way up something will give even in a bankruptcy situation.
[00:21:56.310]Kevin Bernhardt: That you do cash flow at the end. The question that the only question is how does that happen. Does it just happen by not paying your bills. How does it happen.
[00:22:05.550]Kevin Bernhardt: So obviously there's ways to do that. That is good for an operation and ways to do that is not good. But the point is, you will cash flow at the end. Question is, how will you do it.
[00:22:17.100]Kevin Bernhardt: Now I'll come back to this slide later on because the one we get to the very important part of what can I do to improve my cash flow.
[00:22:24.720]Kevin Bernhardt: go right back to the same categories. What can I do to improve the amount of inflow that I'm getting what can I do to decrease my cash outflows. That's how I can improve my cash flow.
[00:22:38.520]Kevin Bernhardt: So we will come back to that later on.
[00:22:44.040]Kevin Bernhardt: Well, let's get our hands dirty and when I mentioned that. What I want to do is go. I'm going to shift gears here.
[00:22:51.870]Kevin Bernhardt: I'm going to stop sharing for just a second and share a different screen.
[00:23:00.450]Kevin Bernhardt: And hopefully
[00:23:05.610]Kevin Bernhardt: Let me make size a little bit bigger. Let me know Robert and Ryan. If this is not the case, but hopefully you're seeing the spreadsheet right now.
[00:23:13.260]Robert Tigner: Yep, it's all good.
[00:23:15.090]Kevin Bernhardt: Okay, great. So this is a spreadsheet. Now this is this particular spreadsheet is one I used for teaching purposes. That's why there's some different colors in there.
[00:23:25.650]Kevin Bernhardt: I do have the same spreadsheet that is available for producers to use or others lenders or others. This particular spreadsheet system is not for the faint of heart.
[00:23:36.900]Kevin Bernhardt: There is much, much easier ones out there much more user friendly more pleasing to the I
[00:23:43.680]Kevin Bernhardt: Ones that a person could use and certainly the University of Nebraska has all kinds of cash flow spreadsheets and other cash flow works worksheets that you can use as well.
[00:23:54.210]Kevin Bernhardt: This particular one is also a little bit more geared towards the dairy producer. And when I say it's not for the faint of heart.
[00:24:02.520]Kevin Bernhardt: That's because there's a lot of help tabs on it and so forth that allow for more accuracy in the cash flow allow for more analysis type stuff to be done.
[00:24:13.020]Kevin Bernhardt: But you'll get the gist of it. So, this particular one is a quarterly cash flow in part of its quarterly because that's just easier to present
[00:24:21.360]Kevin Bernhardt: And the way it works. You can see over here. I'll give you a quick feel for how we start this here's those categories. So the first category start. I think you can see my cursor circling this
[00:24:33.630]Kevin Bernhardt: Is cash inflows from operations. So I can have crops sales, I can have milk sales, I can have feed sales custom work program a program
[00:24:46.920]Kevin Bernhardt: Cash coming in from egg programs, etc. So that gives me my operations. The next category is cash inflows that I might have from selling capital assets, I could sell breeding livestock. I could sell machinery, I could sell real estate, etc.
[00:25:05.160]Kevin Bernhardt: The next category is cash inflow from non farm sources. So I could have other businesses. I could have off farm wages, etc. In this particular case study that you're looking at there isn't any cash inflows from nonfarm sources.
[00:25:20.670]Kevin Bernhardt: Those things, those three things together, given me my total cash inflows and now I have cash leave the operation I pay for chemicals conservation expenses employee benefits for labor, etc, etc.
[00:25:34.890]Kevin Bernhardt: That that are cash outflows for farm operations. And you can see there's fuel. There's freight there's repairs all kinds of items. These are the kind of things you'd see on the Schedule F for your tax return.
[00:25:50.070]Kevin Bernhardt: I also have cash outflows for capital asset purchases for this particular case study. It looks like the farm is going to buy some some land but $270,000 worth of land that's a cash outflow.
[00:26:04.170]Kevin Bernhardt: They're going to buy about $112,000 machinery in the second quarter. So there's some activity that this farm is planning on doing in the next 12 months.
[00:26:14.310]Kevin Bernhardt: There's also cash outflows for non farm sources. In this case, the only thing that's there is some taxes.
[00:26:22.590]Kevin Bernhardt: And their schedule debt. So in the first quarter. This particular farm has 150 $2,000 of term debt loan payments that they have to make
[00:26:33.000]Kevin Bernhardt: They have $72,000 in the second quarter that they have to make. They have some operating loans that they want to pay back. This is their planned interest in principal payments that they plan to do in the next 12 months.
[00:26:49.050]Kevin Bernhardt: The total of all those activity gives them their total cash outflow.
[00:26:54.840]Kevin Bernhardt: If this is if the cash inflow minus the total cash outflow is not positive, then the one thing and you have left to do is new borrowing.
[00:27:04.290]Kevin Bernhardt: So in this particular case. This case farm is going to borrow 260 3000 of new term debt. Remember, they were going to buy that land for 270,000
[00:27:15.210]Kevin Bernhardt: They're going to put a little cash into that rest of it, they're going to borrow and they're going to borrow for that machine repurchase they had as well so they know they have that coming up so they have that plan.
[00:27:28.020]Kevin Bernhardt: Once all this is complete. And again, I want to come back here and I'm going to spin back to the top.
[00:27:39.060]Kevin Bernhardt: To make the point about all the planning that's taking place. I have to know when my income is coming in for corn sales for milk sales for cattle sales.
[00:27:51.420]Kevin Bernhardt: I have to know how much I'm going to get. So I have to know how much I'm going to produce I have to have an estimate how much I'm going to produce
[00:27:59.490]Kevin Bernhardt: I have to have a feel for what price. I'm going to get it. And on top of all that I have to know when it's going to come in.
[00:28:06.630]Kevin Bernhardt: In this case, quarterly, is it going to come in the first quarter second quarter third quarter we could have a monthly cash flow. So we have to know if it's going to come in January, February, March when it's going to come in.
[00:28:18.510]Kevin Bernhardt: I have to know what all. My ex capital assets sales are going to be in this case, I think I'm going to sell some machinery for $7,000 worth in the first quarter.
[00:28:28.650]Kevin Bernhardt: I put that into my cash flow budget. That's a lot of planning.
[00:28:33.210]Kevin Bernhardt: I have to know what all. My operation expenses are going to be for chemicals for car and truck expenses labor expenses. I have to know what they are. I have to know when i think those expenses are going to be. That's a lot of planning.
[00:28:48.690]Kevin Bernhardt: That's taking place.
[00:28:52.140]Kevin Bernhardt: I have to know what kind of new capital assets. I'm going to purchase. In this case, I know I'm going to purchase that land, and I believe it's going to cost me 270,000
[00:29:01.620]Kevin Bernhardt: I know I want to replace some machinery. I'm going to purchase some new machinery in the second quarter. Again, that's a lot of planning that's taking place anywhere from one to 12 months in advance.
[00:29:15.120]Kevin Bernhardt: A cash outflow for nonfarm purposes, etc. I have to know what kind of what my bank is going to be expecting this next year and when that's going to happen again. That's a lot of planning that's taking place.
[00:29:30.030]Kevin Bernhardt: Once that's all said and done, I now can look at my final net cash flow. Well, does it look so good, does it on the screen there. Hopefully you're seeing a big fat red number for the first quarter. I'm 260 $1,000 short
[00:29:44.880]Kevin Bernhardt: Uh, well, I have a problem, man. So now in remember again on the spreadsheet, I can be negative, but in real life. I cannot
[00:29:55.050]Kevin Bernhardt: If I just ignore this then something is going to give in real life, either. I'm not going to make my payments.
[00:30:02.400]Kevin Bernhardt: Or something is going to happen to sell some inventory or something is going to happen so that I have to come back to a positive number.
[00:30:10.590]Kevin Bernhardt: Well, I haven't borrowed I paid off my operating loan, but I haven't borrowed any new operating
[00:30:16.650]Kevin Bernhardt: So I'm going to come back here and I realized that I need to have at least 260 $1,722 of money operating money.
[00:30:27.930]Kevin Bernhardt: In order to be able to break even. Now I could do some other things I could come, but I could go back. This is the planning part, by the way.
[00:30:35.490]Kevin Bernhardt: I could go back to where my incoming where I think my ink inflows are going to be and I could look and see, could I move something from the second quarter to the first quarter.
[00:30:46.260]Kevin Bernhardt: Could I move something from later into that I was going to plan on selling later in the year. Can I move it forward.
[00:30:53.700]Kevin Bernhardt: Can I sell more of something
[00:30:56.670]Kevin Bernhardt: I could look at my operating expenses or my my plan, the capital purchases, could I ignore some capital purchases. Can I put them off to later. So instead of getting that buying that land in the first quarter, could I do it later, or is the opportunity now and only now.
[00:31:15.120]Kevin Bernhardt: Could I put off some other kinds of purchases of capital assets. This is some of the planning that I could do to try to make this number closer to zero.
[00:31:25.440]Kevin Bernhardt: I'm not going to do that in this particular case, I'm going to take the kind of the easy way out here. I'm going to go to the bank and I'm going to borrow. I don't know. Let's put
[00:31:34.140]Kevin Bernhardt: 270 2000
[00:31:39.180]Kevin Bernhardt: At leaves me with $10,000 of positive cash flow.
[00:31:43.500]Kevin Bernhardt: Now that the first quarter is done. I can go through and do all those same things for the second quarter. Again, I'm going to take the easy way out. I'm just going to borrow some operating money, I'm going to borrow 64,000 of operating money.
[00:31:56.760]Kevin Bernhardt: And I'm going to make my cash flow positive. Now my cash flow is positive actually goes to a lot more positive. By the end of the year.
[00:32:05.340]Kevin Bernhardt: In fact, I could go back into my cash flow and I can make some payments. So I know I have quite a bit of operating loan here I could come back here and make some payments, I can make $100,000
[00:32:17.940]Kevin Bernhardt: Of payments and still have 16,000 cash flow leftover so I could do this planning, not only for myself, but also with my lender with other business partners and plan my year out, so plan my operation plan for profits work my plan.
[00:32:38.010]Kevin Bernhardt: So that's a quick, real quick run through of how a cash flow can work it also hopefully shows the point of the amount of planning that goes into it and some of the different ways that I can assure that I end up with that positive cash flow.
[00:32:54.120]Kevin Bernhardt: All right, I'm going to stop there and I'm going to go back to my PowerPoint now.
[00:33:08.400]Kevin Bernhardt: Okay. Hopefully you're seeing all those teenagers are college students that looks like they're having a good time getting dirty.
[00:33:17.070]Kevin Bernhardt: So, uh,
[00:33:19.770]Kevin Bernhardt: Why waste my time. Again, we have to answer that question. Why waste my time doing a cash flow.
[00:33:26.940]Kevin Bernhardt: And I, and I have some examples here, but I'm looking at the clock and I'll come back to these if we have time.
[00:33:34.230]Kevin Bernhardt: But I want to get to something here. What this is, by the way, the next couple of slides are just some examples of how farms have used cash flow budgeting.
[00:33:44.100]Kevin Bernhardt: And what what other kind of management advantages they they received from using that cash flow. So this first one here with j&j dairy, they were able to make some better marketing decisions.
[00:33:56.610]Kevin Bernhardt: As a result of their cash flow. The second example, and I'm not gonna spending time on in here but s&s green. They looked at buying a combine
[00:34:05.340]Kevin Bernhardt: They looked at doing some leasing but they decided to buy it. Instead, but they realized because of their cash flow work that they wanted to work that combine a little bit harder. And so they did some custom work with that combine to help self liquidate that loan.
[00:34:21.180]Kevin Bernhardt: b&b grain they realized they were going to be negative in their first quarter. So they did some borrowing.
[00:34:27.300]Kevin Bernhardt: And then they realize they're going to be have a lot of positive cash flow for a couple quarters. So they also set up some ability to do something with that cash.
[00:34:36.240]Kevin Bernhardt: In be able to gain some interest income for a short period of time. So those are just three examples of how these different farms.
[00:34:45.900]Kevin Bernhardt: Use cash flow to make some decisions. But what I want to come back to. I want to make sure I got to the. That's why I went kind of quickly there.
[00:34:53.700]Kevin Bernhardt: Is I want to come back to that original slide I showed you a little bit ago and look at how we can use that to develop strategies for increasing our cash flow.
[00:35:03.720]Kevin Bernhardt: So here's that same slide and now our question is, let's go back into each of those areas and look at a couple quick things that we might be able to do and this is not an exhaustive list by far.
[00:35:15.360]Kevin Bernhardt: But just kind of wet the whistle here a little bit on some different strategies for how you could increase your cash flow if you see that you have the need to do so.
[00:35:26.070]Kevin Bernhardt: So let's look at the first one increase cash flow from operations. Well, this is one. And by the way, by the way, let me come back.
[00:35:33.900]Kevin Bernhardt: Some of these areas. If I increase cash flow in some of these areas. It's also going to result in greater profitability.
[00:35:41.910]Kevin Bernhardt: So the two can go together better cash flow and better profitability. However, there's also some of these areas where I can increase cash flow.
[00:35:50.850]Kevin Bernhardt: But it either has no impact on profitability or maybe even have a negative impact on profitability.
[00:35:57.840]Kevin Bernhardt: So again, the cash flow is not the same thing as the profit loss statement. Sometimes the two go together. Sometimes they don't. In this first
[00:36:08.430]Kevin Bernhardt: Let me go to the next slide. Now, this first one, increasing cash flow from operations will also help my profitability as well.
[00:36:16.890]Kevin Bernhardt: So what can I do their greater production efficiency. How can I get more milk or cow. How can I get more bushels of corn per acre.
[00:36:26.640]Kevin Bernhardt: Keeping in mind that I don't want to spend more getting it than what I get out of it. So how can I increase that efficiency.
[00:36:34.260]Kevin Bernhardt: If I'm looking at a dairy my might look at feeding. How do I, how am I doing my feeding. How am I making sure that my cows are getting the nutrition they need
[00:36:43.500]Kevin Bernhardt: How am I making sure that those slowpokes that don't come to the feedback right away. How do I make sure that they are getting the kind of feed that they need. How can I get them to be better producers.
[00:36:54.360]Kevin Bernhardt: Is there some things I can do with respect to cow comfort. That's going to increase the ability of my cows to produce milk. Can I do better in marketing, is there a way that I can capture some better prices through marketing.
[00:37:09.210]Kevin Bernhardt: I could sell inventory. I can make better calling decisions. Is there something I can do. Do I have some excess capacity either of machinery.
[00:37:18.420]Kevin Bernhardt: Or of the labor that I have, or both. Do I have some machinery and some labor that is sitting around a part of the month. If so, can I do some activities there to increase some custom work, perhaps, or something there that can increase my inflow from the operations that I have
[00:37:39.240]Kevin Bernhardt: Another second areas capital asset sales. Do I have some capital assets and tractors and machinery some land some cows.
[00:37:48.450]Kevin Bernhardt: That are not working as well for me as I would like. Are they under utilized, or are they just not producing the income that they
[00:37:58.200]Kevin Bernhardt: That I need them to produce. If that's the case, get rid of them sell them get that cash do something better with that cash so sell low profitability enterprises.
[00:38:09.300]Kevin Bernhardt: Do some enterprise accounting accounting. If you're feeding out your, your bull calves, maybe you shouldn't be. Maybe it's if it's not, if you're not earning income off that that you would like maybe that's a place to get some get some cash flow and also improve your profitability as well.
[00:38:28.560]Kevin Bernhardt: In case increasing from non farm sources off on job, of course, but maybe there's some things I can do with the assets that I have on the farm to this, we always talk about economies of scale.
[00:38:40.680]Kevin Bernhardt: Getting larger getting bigger, but there's also a thing called economies of scope where I'm doing more with the assets that I have
[00:38:48.330]Kevin Bernhardt: So can I do something with agritourism hunting fees horse sporting storage for boats and campers small things, they're not going to save the farm. But there are things that might put a little bit of extra cash in your pocket.
[00:39:00.990]Kevin Bernhardt: Is there things. Is there some things I can do there with the assets. I have for something like a welding shop or small engine repair or whatever it might be.
[00:39:09.960]Kevin Bernhardt: Lots of things that might increase my ability to make money with what I already have in the farming operation.
[00:39:17.730]Kevin Bernhardt: Can I reduce cash if it you know I can improve cash flows by increasing cash inflow. I can also improve cash by reducing the outflows of cash that I have. So I can keep more in my pocket.
[00:39:30.060]Kevin Bernhardt: So can I reduce my variable costs. Oh, man. There's all kinds of things we can do here and talk about so I can negotiate lower prices for leases.
[00:39:39.450]Kevin Bernhardt: For the different
[00:39:42.480]Kevin Bernhardt: Seed feed and fuel that I have to
[00:39:45.360]Kevin Bernhardt: Purchase cheaper ration ingredients, if that makes sense. Better feed management so that I'm not wasting so much feed variable rate application.
[00:39:53.910]Kevin Bernhardt: Application, all kinds of things that you folks have done already in the past and are doing all the time to try to improve your profitability. This will also improve your cash flow.
[00:40:05.910]Kevin Bernhardt: Can I reduce labor costs. I think it seems like nine times out of 10 when you go and look at a operation that's not performing well labor quite often is the culprit.
[00:40:18.630]Kevin Bernhardt: better management of the late. It's not. It doesn't mean I have too much labor, necessarily, but it might mean that the labor that I have is not being utilized to its full potential.
[00:40:29.340]Kevin Bernhardt: So is or isn't actually more investment that I can put into that labor that makes that labor more productive. That makes that labor increase the amount of of
[00:40:41.100]Kevin Bernhardt: Cash flow that I'm getting and by so doing, I'm increasing a month decrease the amount of labor per unit of product that I'm producing
[00:40:51.360]Kevin Bernhardt: I could also negotiate contracts and so forth there. I might collaborate with neighbors to be able to do some bulk buying shared field work some of these things might be
[00:41:03.810]Kevin Bernhardt: A way to reduce cash flow as well. Now you see the big yellow box. It's on this slide. You do have to be careful on this one. There's you can reduce cash outflow.
[00:41:14.760]Kevin Bernhardt: By ultimately hurting the amount of inflow that you get to. So just to be completely
[00:41:22.710]Kevin Bernhardt: weird about it here. You know, I can reduce my expenses that I have and reduce the amount of cash outflow. I have by not feeding my cows.
[00:41:31.890]Kevin Bernhardt: You know, if I don't feed them anything. And I'm not, I'm not having any expense there. Well, obviously, that's going to be not the way to do things in the long run.
[00:41:42.000]Kevin Bernhardt: So you have to be careful of where you do those cuts at but there's certainly some games to be played. Here are some management to be done in this area.
[00:41:51.270]Kevin Bernhardt: I could delay capital asset purchases. Do I can, you know, what's the, what's the cost benefit of repairing that machinery and equipment versus buying new machinery and equipment.
[00:42:02.910]Kevin Bernhardt: Can I make it last. Another year, another six months, whatever that might be to get through a point to a point where I have better profitability and can replace that asset.
[00:42:12.780]Kevin Bernhardt: Can't go on forever. But is there a way to delay that capital asset purchase. Can I sell something and Lisa, can I sell something and do some some
[00:42:24.390]Kevin Bernhardt: Custom higher of it is that make more sense. Maybe there's some things that can be done there.
[00:42:32.070]Kevin Bernhardt: I could reduce nonfarm outflows the family living withdraw. I got to be careful going there. We obviously don't want to be extravagant with family living during times when we need that cash.
[00:42:43.140]Kevin Bernhardt: By the same token, we can reduce Family Living to a point where it starts to affect management as well. So I think, I think we have to be a little careful on that front.
[00:42:51.930]Kevin Bernhardt: But certainly, it has to be within line we might want to look at some family bonuses that take place. Is there some things that the operation is paying for that in times of poor profitability, at least, it just can't afford
[00:43:05.760]Kevin Bernhardt: You know, the very bottom one. There's one. I ran into here not too long ago where there was a farm operation. I was working with and they were paying a lot of cash.
[00:43:15.330]Kevin Bernhardt: Each year for the tractor pulling hobby that one of the sons had. And that's a family decision, that's a value decision by the family. They certainly got a lot of a
[00:43:27.150]Kevin Bernhardt: Good family time out of that tractor pulling hobby that they had it brought the family together.
[00:43:32.490]Kevin Bernhardt: But in this particular period of poor profitability. That probably wasn't a time to be putting out money for the tragic plane expenses. So there may be some things there that have to be put off at least for a short term.
[00:43:46.110]Kevin Bernhardt: Reduce scheduled debt payments. Now this is one that you can take advantage of potentially in working with your lender your lender. So is there a time period where we can do interest only payments.
[00:43:58.650]Kevin Bernhardt: Can I go back and restructure my loans that I have put them together, consolidate them.
[00:44:05.610]Kevin Bernhardt: Put some perhaps some real estate behind them as as collateral and an amortized them out over a longer period of time. Now, one has to be careful about doing this.
[00:44:16.170]Kevin Bernhardt: Because at some point, your. Let me give you an example. I bought a tracker. I took a loan out for it. And now I restructured my loan that debt for that tractor went into a long term loan that I'm going to pay out for the next 2025 years
[00:44:32.940]Kevin Bernhardt: That tractor now has been traded off and as long gone, the tractors gone but for the next 10 1520 years I'm still paying that tracker debt.
[00:44:44.790]Kevin Bernhardt: So you have to be careful when you consolidate debt and amortize it over a long period of time because at some point.
[00:44:52.560]Kevin Bernhardt: You're paying for stuff that is long gone in terms of of it being a capital asset in your farm. Nevertheless, this is certainly a way to increase cash flow is by restructuring your debt.
[00:45:06.660]Kevin Bernhardt: And then finally, after all that we can do new borrowing. So I think we want to exhaust some of those other areas.
[00:45:12.840]Kevin Bernhardt: And if if we still need some cash flow at the end of that, then we can go in and do the restructuring, or we can do a new operating line of credit borrow some operating money, but when we do so, we also want to keep in mind a plan for how we're going to pay that debt back
[00:45:32.970]Kevin Bernhardt: Okay.
[00:45:34.980]Kevin Bernhardt: My clock says
[00:45:37.110]Kevin Bernhardt: In front of me 1245 Robert so that leaves us a little time for any questions and answers that people might have. I'm going to stop sharing here for a moment and I will come back.
[00:45:51.180]Kevin Bernhardt: To all of you and see if you have any questions.
[00:45:56.340]Robert Tigner: I've got a couple um
[00:46:00.180]Robert Tigner: So you talked about
[00:46:03.600]Robert Tigner: Those various types of farms that the Guardian transition. There's a long haulers and the fence sitters so
[00:46:16.110]Robert Tigner: How do I as a farm or ranch.
[00:46:22.110]Robert Tigner: Identify which I really am. I might think I'm setting on offense, but I'm really not. I'm, I'm the Guardian transition or
[00:46:35.970]Robert Tigner: So how do I figure out so that I don't go off and make it make errors.
[00:46:45.840]Kevin Bernhardt: Yeah, good question. Let me, let me back up. Let's, let's assume for a second to our that on the fencer
[00:46:53.610]Kevin Bernhardt: Now, you may have a feeling that you're a guardian transition or because the farm. Just that just has not been profitable for a long time.
[00:47:02.400]Kevin Bernhardt: It's getting harder and harder and harder to make your expenses. You're watching your barn. You're watching your equipment and machinery lion get older and older and older and you can't afford to replace it.
[00:47:15.990]Kevin Bernhardt: Now for the last few years, and the dairy industry that that fit almost everybody because we were in that low price time. But if you budget and look ahead and you see that even with higher prices, you still are going to have this challenge.
[00:47:33.420]Kevin Bernhardt: That means that your long term profitability is at risk if this if this operation does not have the capacity to be able to get to some profitability under normal pricing conditions.
[00:47:49.950]Kevin Bernhardt: That is a strong indicator that you have to transition to something
[00:47:54.600]Kevin Bernhardt: So I think Robert, the answer to your to the question in terms of how do I determine which camp. I'm in is really a question of what you believe your long term profitability.
[00:48:08.160]Kevin Bernhardt: Potential is now that's a loaded question.
[00:48:12.690]Kevin Bernhardt: Because you tell me what prices are going to be for the next five years, you tell me what kind of things are going to come down the pike in terms of geopolitical events presidential elections, everything else. And what kind of impact that's going to have at the farm gate.
[00:48:27.720]Kevin Bernhardt: Then I can tell you a little bit better what long term profitability is going to be so it is not an easy question to answer.
[00:48:35.280]Robert Tigner: Yeah, if, if I'm, if I'm doing cost of production calculations or projecting my costs say out for the next five years and and and my cost of production is like
[00:48:52.230]Robert Tigner: Three and a quarter 340 okay so I the the probability of corn prices, let's say in that range is probably pretty high.
[00:49:06.060]Robert Tigner: That's, that's a that's an estimate of course. But if I if I start projecting and understanding that okay if I'm going to be in business for the next five years.
[00:49:16.830]Robert Tigner: I really do have to replace machinery and when that machinery replacement pushes my cost production up to, let's say, maybe four and a quarter for
[00:49:29.820]Robert Tigner: The probability of being
[00:49:32.700]Robert Tigner: in that price range, the next five years is probably
[00:49:38.490]Robert Tigner: A great deal smaller
[00:49:40.830]Robert Tigner: Yep, so then at that point, I know I'm probably one of those guardian transition owners, rather than the fence better than I thought I was
[00:49:51.060]Kevin Bernhardt: Yep. Yep, that's right.
[00:49:53.280]Kevin Bernhardt: You know you can live off of depreciation for a while. But at some point, those capital assets have to be replaced.
[00:50:01.080]Kevin Bernhardt: And so you you if you don't see that possibility happening with the with with what you think the distribution of potential prices is going to be going into the future.
[00:50:15.060]Kevin Bernhardt: Then you're right. That's when you. That's when you have to start looking at what can I do different. Now let's let's just
[00:50:22.080]Kevin Bernhardt: Let's just think aloud for a second of the things that that particular farm that you mentioned could do different
[00:50:27.840]Kevin Bernhardt: So they're they're seeing a cost of production. That's that they have when they include asset replacement. That is just larger than what the market is likely to give. So what can they do to bring that cost down
[00:50:43.110]Kevin Bernhardt: Well, one thing is is scale.
[00:50:46.620]Kevin Bernhardt: They could get larger, they could get bigger. If they're if their management style and their management ability in their infrastructure is allows that to happen.
[00:50:58.020]Kevin Bernhardt: Another thing they might do is change the business model that they have
[00:51:03.120]Kevin Bernhardt: So you might have an operator that was strictly a a grain commodity producer corn and soybeans.
[00:51:12.780]Kevin Bernhardt: Now, they're going to transition to something that's a completely different business model.
[00:51:18.780]Kevin Bernhardt: That still taking advantage of the acres. They have but it's taking advantage of them in a different way instead of producing commodity corn, soybeans, they're going to produce
[00:51:30.240]Kevin Bernhardt: Organic corn and soybeans. If they have a market for it. They're going to produce, they're going to have some vegetable production, they're going to
[00:51:39.540]Kevin Bernhardt: produce some hops for a brewery that they have a contract with, you know, these different kinds of activities and of course I don't know about Nebraska here in Wisconsin industrial hemp.
[00:51:51.540]Kevin Bernhardt: Hit like a freight train. Not this year. But last year and it exploded, like a freight train at the end of the year, too. So you have to be really careful about those different value added.
[00:52:06.240]Kevin Bernhardt: possibilities that you could get into it is a different business model. I use that terminology purposely raising corn, soybeans, as a commodity has a certain business model associated with it a certain type of good management that makes it successful.
[00:52:22.230]Kevin Bernhardt: Those other kind of value added businesses and so forth, like hops like industrial hemp like vegetables like organics. It's a different business model. It takes a different set of management characteristics to make it successful. But it can be
[00:52:41.760]Kevin Bernhardt: The, the person involved just has to make sure that they have that kind of a management capacity to do those operate that kind of business model successfully. But you're right. If the, the alternative is that you just keep on doing that corn and soybean commodity business.
[00:53:01.170]Kevin Bernhardt: And the way that you make it work is that you spend your equity.
[00:53:05.910]Kevin Bernhardt: Because if you can't make it profitable through its normal operations.
[00:53:11.820]Kevin Bernhardt: Then, the reality is you do cash flow at the end. And the way you do it is by spending your equity.
[00:53:19.050]Kevin Bernhardt: And at some point you've run all that out and then you are in that bankrupt situation. You don't want to get there.
[00:53:26.430]Kevin Bernhardt: So that's when you want to try to switch to something else.
[00:53:30.180]Kevin Bernhardt: You know, one thing that's a if you're looking. If you're a livestock business, for example, maybe you're a dairy operation where you are a good dairyman
[00:53:39.030]Kevin Bernhardt: You know how to get milk out of cows in a very financially efficient way. But you are lousy at crops you don't like them. You don't like machinery everything you ever get into breaks down.
[00:53:52.680]Kevin Bernhardt: Your neighbor is just the opposite.
[00:53:55.950]Kevin Bernhardt: They can't stand going out in the barn every morning and every night and they're not good with their cows, but they're pretty darn good with cropping
[00:54:05.880]Kevin Bernhardt: Combined align network with each other and maybe the two of you could end up having a different business model that takes advantage advantage of what it is that you're good at.
[00:54:21.090]Robert Tigner: So one other question that I have here is
[00:54:26.460]Robert Tigner: Okay, so I produce this cash flow.
[00:54:30.780]Robert Tigner: Should I, should I review it periodically, or should I or does it, does it have any any management.
[00:54:41.430]Robert Tigner: Capabilities for me.
[00:54:45.030]Kevin Bernhardt: That's a great question and I'm glad it was asked, and the answer is absolutely yes. You should review it on a very continuous basis if you really want this particular management tool to work for you. I think it has a great capacity to increase your management skill so
[00:55:05.430]Kevin Bernhardt: So let me play this room. It's November, it's October, and I'm doing my cash flow for the next year. Let's assume it's a calendar basis. I'm doing my cash flow for the next year.
[00:55:17.790]Kevin Bernhardt: And you remember what I just showed on the spreadsheet there. Let's suppose I went through that in October that made sense in October, November, the prices, I use the production, I use the cost of that I used the timing of everything made sense.
[00:55:33.720]Kevin Bernhardt: But things happen. So as I go through the year that there's not ever been a budget that's been put together that ever worked right
[00:55:44.790]Kevin Bernhardt: There's never been a budget that anybody's ever put together that at the end of the time period that it turned out just exactly as you budgeted it
[00:55:52.740]Kevin Bernhardt: That doesn't happen, life happens. So you get to January, you get to February, you get to march, you go back to that cash flow you put the numbers in that actually occurred in January or actually occurred in the first quarter, whichever you're doing
[00:56:09.780]Kevin Bernhardt: And then you have to adjust the rest of the year. Accordingly, think about the management that's happening there. I'm sitting down at the end of, let's say, February I feel in January's numbers.
[00:56:21.660]Kevin Bernhardt: And I look at what that impact has been on the cash maybe prices were higher than I thought maybe costs were higher than I thought. Whatever.
[00:56:29.160]Kevin Bernhardt: I put that in there. I now see what the impact is on the rest of the year, I can adjust the rest of the year in a planning way and start putting those plans into place by the decisions I make
[00:56:41.940]Kevin Bernhardt: I do the same thing after the first quarter I did the same thing. After the half of the year. I'm it's now July, I'm looking at what's happened the first half of the year. I see what the impact is on the rest of the year and I start making plans accordingly.
[00:56:56.760]Kevin Bernhardt: That's management to me. I'm making those decisions every month, every quarter, rather than just letting it happen to me, and see what the result is. At the end of the year.
[00:57:08.700]Robert Tigner: So we're almost to one o'clock and so. Thank you, Kevin. Thank you everyone for joining us today.
[00:57:17.700]Robert Tigner: A recording of the webinar will be email@example.com now.edu where you can also register for other upcoming webinars. You saw a brief list of those on the slide at the very beginning of this series as a reminder, check farmed at you and our edu for a schedule of more of them.
[00:57:39.450]Robert Tigner: As the time goes on, we plan to do more and more of these. Not just the ones that are listed the series continues next Thursday at noon with an overview of land values and cash rental rates that have just been released in the final 2020 Nebraska farm real estate report.
[00:57:59.850]Robert Tigner: You will be receiving a short 32nd survey in your email, and we would really appreciate your feedback on today's webinar and your input for future
[00:58:11.520]Robert Tigner: Webinars sessions. Thanks again for joining us. And thank you, Kevin for being willing to do this for us.
Log in to post comments