By Tanner Bollum, Billings Ag Committee Co-Chair, Business/Ag Banking Officer, Bravera Bank
Agriculture is a rewarding but risky business, and anyone involved in it knows that it’s more than just planting seeds and harvesting crops. Farming and ranching are capital-intensive endeavors, requiring substantial investment in land, equipment, labor, and resources. What makes agriculture unique is the long cycle of return on investment. Producers often only get paid once a year when their commodity reaches the market, meaning their cash flow can be tight and unpredictable throughout the rest of the year.
Given the volatile nature of the industry, no farmer or rancher can afford to go it alone. Today’s successful agricultural operations are those that embrace collaboration with a diverse group of professionals. A strong, reliable team is essential to navigating the challenges of modern agriculture.
Key players on this team include:
- Banking and Lending Professionals: Financial stability is crucial in ag. Banks and lending institutions provide essential services, from crop loans to operating lines of credit. A good relationship with a bank or lender can help producers weather tough seasons, invest in improvements, or manage cash flow until the next harvest. This partnership often extends beyond just financial transactions; having a lender who understands the cyclical nature of agriculture and trusts the farmer’s ability to manage risk can make all the difference.
- Accountants: Ag producers face a unique set of tax laws and financial regulations. An accountant who specializes in agriculture can help manage these complexities, ensuring that a farm or ranch is financially sound and compliant. Accountants also help manage budgeting, track cash flow, and optimize tax strategies, allowing producers to focus on their operations without worrying about financial mismanagement.
- Attorneys: Legal issues can be a significant risk in agriculture, whether it’s land use disputes, regulatory compliance, or contracts with suppliers and buyers. A trusted attorney familiar with agricultural law can help navigate these challenges, ensuring that farmers and ranchers are protected from legal pitfalls that could threaten their livelihoods.
- Agri-business Partners: From feed stores and seed suppliers to equipment dealerships and farm machinery service providers, agri-businesses are integral to day-to-day operations. Credit lines from these partners allow producers to maintain operations, purchase necessary supplies, and invest in new technologies. Maintaining good relationships with these businesses ensures that producers can access what they need when they need it, often with favorable terms.
These professional relationships are not just transactional; they are built on trust and mutual understanding. In agriculture, one bad decision or missed opportunity can have long-term consequences, so working with professionals who understand the industry’s nuances and challenges is crucial. The more integrated the team, the better the support system for decision-making, risk management, and long-term success.
In essence, success in agriculture is not just about having the right equipment or land—it’s about the relationships that are formed to help navigate the complex, ever-changing landscape of the agricultural industry. These partnerships ensure that farmers and ranchers can manage risk, make informed decisions, and continue to thrive in a challenging yet rewarding field.
