Trees surrounding a vineyard on a sunny day.

Building Profitable Farms and Strong Financial Management in California

View the complete report online.

The “Building Profitable Farms and Strong Financial Management Project”, conducted by California Farmlink, focused on grower education and action on Financial Risk with subtopics that included debt and asset management -impacting cash flow; business and strategic planning -including business structures; farm financial bench marking and prudent use of credit; and financial records and analysis to support long-term success.

One hundred eight growers participated in four Preparing for Profitability Financial Clinics in three agricultural regions of California–the Central Coast, Sacramento Valley and North Coast. The clinics focused on increasing understanding of risks inherent in credit scores, types of agricultural credit, cash flow, financial statements and debt management. One hundred eleven growers worked in one-on-one technical assistance meetings with FarmLink and its partners to effectively implement cash flow and sales projections, develop income statements, and manage credit history in order to access capital and achieve profitability.

As a result of this program: 69 farmers implemented steps for building or growing strong relationships with lenders; decided and/or affirmed an appropriate business structure to manage financial risk and support their long-term goals; implemented a plan to build their credit history and performance; developed and implemented a plan for accessing and managing credit; and implemented plans and processes to successfully manage and expand access to credit/capital.

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Two farm partners who have established a good record keeping system, have developed their own financial statements which resulted in qualifying for a 2016 operating loan and a pre-qualification for a 2017 loan.

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One participant said – “It was helpful to hear and contemplate the possible loan combinations to accomplish our goals.”