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Finances

Contingency Planning with Cash Flow Shortages

A contingency plan is a course of action designed to help a business determine how to respond to possible future events. Contingency plans are often referred to as “Plan B”. One of the most common contingency plans used by a business, particularly a small business, relates to how to respond to the departure or absence of key personnel. Contingency plans relating to how to respond to changes in projected cash flow are also important. Given the recent increase in input prices for fertilizer and fuel and wide variability in expected prices, it would be prudent for a farm to examine the sensitivity of their cash flow and repayment capacity to changes in crop prices. This article illustrates the use of contingency plans for a case farm in southwest Indiana.

AgCast 219: Why Profitable Farms Still Run Out of Cash

Farm profitability and cash flow are not the same thing — and many operations are feeling the pressure. In this episode of the Commercial AgCast, John Maman of Nutrien Financial discusses operating lines, financing strategies, input decisions, and how strong farms maintain flexibility during tighter margins.

Indiana Farm Income Outlook Report, Spring 2026

U.S. farm income in 2026 appears stable, but increased government payments are masking weaker livestock receipts and rising costs. Indiana faces a sharper decline, with net farm income projected to fall 28%, highlighting tighter margins and growing financial pressure heading into 2027.

Inflation Is Falling… So Why Are Farm Costs Rising?

General inflation has eased from recent highs, but farm input costs remain elevated and in some cases are still rising. Fertilizer, fuel, and other key inputs continue to be driven by supply shocks and global market forces, creating a disconnect from broader inflation trends. That gap is keeping breakeven prices high and adding uncertainty to 2026 planning decisions. See how these trends are shaping cost expectations for the year ahead.

Trends in General Inflation & Farm Input Prices

Farm input costs don’t move in lockstep with inflation. Understanding which costs follow inflation—and which don’t—is key to managing margins in today’s volatile environment.

USDA’s First Forecast of the 2026 U.S. Farm Balance Sheet

USDA’s first 2026 Farm Income and Wealth Statistics release provides an early look at the U.S. farm balance sheet heading into the next production cycle. Farm assets and equity are projected to grow at the slowest pace since 2019–2020, while farm debt accumulation accelerates for the third time in four years. Non-real estate assets are expected to decline, driven by reductions in livestock and crop inventories, even as machinery investment continues rising. Key efficiency ratios remain near historic lows, signaling tighter production returns relative to asset values.

What 2026 Crop Budgets Mean for Profitability and Cash Rent Decisions

Margins remain tight for 2026. Purdue’s latest crop budget estimates show soybean rotations maintaining a contribution margin advantage over corn, while breakeven prices for both crops remain well above expected market prices. Negative projected earnings could slow machinery purchases and put pressure on cash rents, making careful cost management and crop budgeting essential.

Farm Income Outlook for Indiana

Farm income in Indiana gets a boost in 2025, but 2026 projections show renewed financial pressure. Here’s what’s driving receipts, expenses, and net income.

Rising Farm Debt and Financial Stress: Evidence from the Ag Economy Barometer

New Ag Economy Barometer data suggest rising operating loans—especially those tied to carryover debt—may signal increasing financial stress and thinning working capital cushions on farms.

Financial Stress, Labor Decisions, and Farm Resilience: Tools to Evaluate Your Operation

Adding a family member or employee to a farm is a long-term financial decision. These slides and self-assessment tools help evaluate financial feasibility, strategic risk, and business resilience before expanding labor.

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