The deeper the hole you dig, the more
opportunity to bury yourself. During profitable cycles, everyone wants a piece of the
In today’s environment, some producers believe that around. The recent commodity super cycle was like a
more must still be better. They continue to borrow more magnet that attracted many into the industry. However,
money, or refinance based on equity, or continue to there is another old adage that says when everyone is
grow the business in hopes it will pull them out of their running, walk; and when everyone is walking, run.
financial slump. Well, often it is not about how much Recently, proactive producers have found opportunities
more, but about how much less. Instead of pushing to acquire machinery and equipment at 60 cents on the
upward, several producers need to consider scaling back dollar, and livestock for 50 cents on the dollar. This, of
the operation, and reassessing the assets and resources of course, places them in a better position to negotiate the
the business, particularly, as market dynamics change. farm land purchases or leases. While it takes commitment
For those that attempt to borrow more money and discipline, implementing a well-planned strategy in
because of losses, a one-page, written recovery plan or tough times can result in growth and opportunity for the
road map is critically needed. This type of simple plan business.
requires one to think critically about the short and long-
term goals, the production and marketing plans, and sayings and phrases, when applied to agriculture, these
possible cash flow scenarios. This work necessitates the little words of wisdom can be very helpful. And while
calculation of working capital, equity loss and burn rates. a simple phrase will not make one a multi-millionaire, it
Of course, the updated balance sheet will detail negative can spur critical thinking which leads the wa