Episode 120 - Will your BUSINESS MODEL stack up

For many, the last few years have been unique and positive – resulting from low inflation, low-interest rates, above-average commodity prices and above-average production.

Now, our current reality is very different.

We will likely see an extended period of increased inflation, increasing interest rates and softening commodity prices. In addition, from a production standpoint, there is talk of El Nino weather patterns ahead…

The question we should ALL be asking is: Can my farm business model handle this new reality?

In this episode, I call on the “Brains Trust”, inviting Farm Owners Academy Co-Founder Greg Johnsson and Executive Director at RLS Agribusiness Jeff McDonald to join me to explore this question in detail.

We discuss the importance of:

• knowing your numbers;
• presenting proactively to your bank;
• developing a compelling economic model for your farm;
• stress-testing your farming system based on long-term average yield & prices;
• knowing your ‘new’ cost of production; and
• being financially strong as a farm business owner.

In this, we share 2-3 key performance ratios we each need to be aiming for and emphasise the importance of considering these in confirming you have a business model that is agile, flexible, profitable (in most years) and resilient.

As always, a compelling conversation when I bring these two incredible minds together.

Enjoy, and all the best as you stress-test the strength of your business model.

Best,

Hutch & Team