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FarmCash Can Help Producers Leverage the Best Market Price

 
Written by Syeda Khurram

The largest stressors for farmers during harvest time are variability around production based on the weather and variability in market prices. Many farmers experience the highest negative cash position during harvest season when they continue to pay operating costs, while their main source of revenue is still in the field. Market price determines the bottom line of a farm operation, as farmers primarily rely on the market price to recover all operating expenses, reduce the liabilities, grow farm income and make future strategic investments for their business growth.

In order for a producer to be prepared for variability in market prices and production that could shrink their net profit margins, good cash flow planning with realistic projections are key. Cash flow planning involves tools that meet the emerging cash needs while maintaining farm operating reserves, ensuring income stabilization and maintaining the expected level of returns. With less or no cash coming in, applying for operating loans and other cash flow management tools are considered essential for maintaining short and long-term financial stability of successful farms.

One of the most applicable cash flow management tools that boosts the level of confidence in expected returns is FarmCash. It helps producers manage their production costs and market their crops when the timing is right to increase profitability, rather than making marketing decisions that are dependent on cash flow constraints. By filling the gap between when revenue comes in and when the expenses are due, farmers can increase the net worth of their farm by including FarmCash as part of their cash flow planning.

FarmCash is a federal loan program that provides producers with easy access to low-interest cash. Producers can assess up to $1 million with the first $100,000 interest free, and the remainder at a low interest rate of TD Prime minus 0.75 per cent. Alberta producers of over 50 agricultural commodities including crops, livestock and honey can apply for free through a simple online application and receive funds in three to five business days upon completion of their application.

FarmCash provides farmers the opportunity to leverage the best market price by allowing them to store grain until the price is yielding profits for their farm and repay when they sell their product based on the right market conditions for the continued success of their operation. FarmCash is an easy-to-use program that sustains farm cash flow in real time, increases bottom lines by providing the opportunity of gaining the best market price and generates cost savings by leveraging the lowest interest rates in the market. Fuel farm growth through FarmCash.

Producers can apply for FarmCash online at farmcashadvance.com or call 1.855.376.2274 to speak with a FarmCash representative.

The Advance Payments Program is a federal loan program administered by the Alberta Wheat Commission. It offers Canadian farmers marketing flexibility through interest-free and low interest cash advances.

Originally published on October 1, 2020 in the The Grain Exchange.

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