With higher commodity prices, RaboBank Senior Grain and Oilseed Analyst Stephen Nicholson says farmers may want to consider strategies to help secure long-term financial stability. “Working capital depleted in the past seven years. Let’s rebuild the working capital first,” says Nicholson. “One lesson we took from the last uptick in commodity prices was if farmers pay down debt, they are debt free, but also cash poor.” Nicholson says balance will be important. Once farmers rebuild working capital, attention can shift to improving the farm business. “Maybe farmers should invest in a new business to help sustain the business longer-term. Perhaps it’s investing in new crops and then, farmers can be thinking about how to make the farm more efficient.” These strategies are part of a new Rabo AgriFinance report.
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