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Maintain and Improve Your Farmland Value with FarmCash

 

Written by Emily Johnson and Syeda Khurram

Farmland value is an important consideration when farmers are looking to grow and improve the profitability of their farm. Farmers can enhance the value of their farmland by adopting management practices that will yield the greatest possible returns and maintain the long-term financial sustainability of their farm. Key determinants can impact farmland value including farm earnings, efficiencies, cost savings, productivity, market prices, interest rates and profitability.

Farmland value can also be assessed through a farm’s yield, crop production and by how attractive it is to the potential investors. If land is generating better profits due to the improvement of maintenance and farm assets, it will in turn lift the value of that piece of land. Therefore, a high rate of profitability inevitably increases farmland value.

By using the right business management tools, producers can enhance their farm growth and ultimately boost their farmland value. That’s where FarmCash comes in.

FarmCash offers low-interest rate cash advances of up to $1 million, with $100,000 interest-free and the remaining $900,000 at TD prime minus 0.75 per cent on over 50 commodities including all major crops, honey and livestock with no application fees. FarmCash allows producers to make valuable investments and yield better returns for their farm that help maintain and increase farmland value.

A key factor of FarmCash that directly impacts farmland value is our interest rate. Low interest rates reduce the cost of capital purchases and allow producers to reinvest their savings in assets that generate additional income. In order to maintain and improve farmland value, it is imperative that farmers continue to drive reinvestment in farming operations. In addition to having increased purchasing power that allows farmers to make wise capital investments, low interest rates also reduce operating costs and increase farm efficiency and productivity.

In comparison, taking on a higher interest rate to finance a purchase reduces the level of profitability by increasing the borrowing cost and limiting opportunities to invest in revenue generating assets.

While investing in capital assets using operating reserves or exhausting cash may be other options, it would put a big hole on a producer’s balance sheet and increase the farm’s financial risk. Investing with FarmCash leaves a producer’s cash balance untouched and allows the cost of the purchase to be financed over its useful life. The only cost to the producer would be the minimal interest rate and the depreciated value of the equipment over years. Meanwhile, a wisely chosen investment could allow the farm to improve its profitability, translating to a very low risk, high return investment.

Guarantee your expected returns using FarmCash or guarantee a better rate of return for your operations using FarmCash.

With FarmCash, farmers can make informed business decisions that allow them to expand and optimize operations to improve the long-term financial sustainability of their farms. Producers interested in improving their farmland value with FarmCash can apply for free using our simple online application at FarmCashAdvance.com and receive their advance in as little as three to five business days, 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 January 1, 2021 in The Grain Exchange.

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