The Lucknow Sentinel, 1985-03-20, Page 43Focus of sheep production changing
In 1975 it was possible to get a Farm Credit
Corporation loan for fixed assets at about 8
per Dent interest. FCC loans were 161/4 per
cent at the height of the recent interest rate
crisis and currently FCC • lends at 123/4 per
gent for five years amortized over 20 years.
Farm improvement loans were seven, per
cent in 1975 and now they' are over 13 per
gent. Ws difficult to get long term credit and
the chances of intermediate cYedit) are iffy.
Some danger signs to look for, warns
Pullen, include using more credit for feed
-bills and supplies. Suppliers and feed
companies charge two per Dent interest per
month which is 30 per gent a year and that
kills. Another danger sign is borrowing more
each year to plant crops or buy replacement
livestock.
Good financial management has its featur`
es. One is proof - physical records to support
your request for loans and cash flow cairns.
Budgets will show . how much debt you can
service and records allow regular monitoring
of your financial situation and permit a
marketing strategy.
Such a strategy includes calculating returns
on resource units and cost control resulting in
unique ideas for controlling costs or decisions
to repair, rather than buy new.
By Sharon bietz
Sheep breeders have traditionally focused
their attention on production more than
economics because they spent so mirth time
trying to keep the "litters" alive, according
to Don Pullen of the Clinton . OMAF office.
Sheep producers figure -if they can keep
production up -the finances will take more of
themselves.
But the decline in sheepproduction due to
predators and internal parasites, the two
"profit robbers" as Pullen phrases it, has
caused agriculture representatives to become
more involved in the financial management of
. sheep production.
When farmers think of financial manage-
ment they think of bills and the need for
money to pay them, says Pullen. This require-
ment reinforces the need for record keeping.
The heart of sound financial management
is information which allows you to analyse
current and past performance to plan for the
future, states Pullen. Records provide the
basis for effective decision making:
Cash records are okay for Revenue Canada
purposes but this type of record does not take
into account receipts, balance payable and
inventory.
Farm records are one the last chores a
farmer gets done, says Rillen. Usually
fanners tackle their bookkeeping late at night
when they're finished with fGther jobs around
the farm and they are tired. But farm records
provide financial. and physical information
which, if kept properly, are irreplaceable.
Physical information includes barn record
sheets and ewe record cards while financial
information includes the, balance sheet, a list
of what you own and owe to others at any
given time. A balance sheet can be used to
support a loan request as it is the most
commonly requested document by lenders; to
show fano business progress and as a snap-
shot of farm solvency.
A balance sheet has its limitations,
however. When land values turned around
banks,were no longer looking at the balance
sheet but at the cash flow to see if farriers
were capable of servicing the debt.
Input costs are up dramatically with no
increase in commodity prices and credit is no
longer based on fixed assets but rather the
cash flow projection.
Berm reroutes water
to underground tile :..•
from page 10
berm ponds the water rerouting it to an
underground tile, preventing the water from
running across the land creating, a gully right
across the farm. The berm also prevents top
soil from being swept into the drainage
system where it has to be removed. The basin
is big enough to store water from 60-70 acres.
Two smaller structures are required down
stream about 1,000 feet apart.
Control of spring runoff in this manner
would effectively stop the erosion of gullies
along the Huron shore line if fanners inland
were employing soil erosion practices. Such
erosion control would also effectively reduce
the cost to the township for cleaning
municipal drains and to the taxpayers who
pay to dredge Goderich harbour.
The Farm Edition, Week of March 20. 1985 - 23
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