LINCOLN, Neb. -- Good planning is always key to success for agricultural producers -- but perhaps never more so than in today's economy, said a University of Nebraska-Lincoln agricultural economist.
"Planning what to grow in 2009 has many complications this year," said Doug Jose, UNL farm management specialist. "Among the possible unknowns at the farm level are market prices for commodities, the cost and availability of inputs and the cost and availability of operating credit.
"I say 'possible' because through contractual arrangements and forward pricing decisions, farmers already may have locked in many of these prices for the next production cycle," he added.
Like everyone, farmers are keeping an eye on the overall economy, Jose said.
"Agriculture needs improvement in our general economy and improved consumer confidence to prosper," Jose wrote in the Dec. 17 issue of Cornhusker Economics. "Yes, people will buy food, but they will spend more on food through buying more expensive items, more protein and more prepared meals, if they have more money in their pockets."
Jose offers these planning tips for 2009:
"The same applies to prepaying for inputs. Producers become unsecured creditors with prepayment arrangements," he added. "There were incidents this year of firms becoming insolvent and not supplying the inputs. Deal with suppliers who have been a part of your local economy and have a history of providing dependable service to their customers."
SOURCE: University of Nebraska.