Reading Time: 3 minutes The October 2015 Trans Pacific Partnership (TPP) agreement is a substantial trade treaty for its 12 members, and like other trade treaties, it will introduce concessions on market access, such as tariff reductions and increased import quotas, as discussed below. But there is also considerable focus on food safety regulations as well as on biotechnology […] Read more
What will the TPP mean for your farm?
AME Management: Overall, Canadian farmers get increased market access from TPP, plus better dispute settlement
Use financial ratios to diagnose operational issues
AME Management: Different farms have different factors affecting their performance
Reading Time: 3 minutes The profit and loss statement provides three financial ratios that can help identify operational issues and set priorities in your operations plan. The ratios and their benchmarks are: The first and third columns define revenue/earnings and cost categories deducted from them on a standardized operating statement. The second and fourth are the resulting operating and […] Read more
Clear rules for using futures options
AME Management: Define your objectives for commodities pricing
Reading Time: 3 minutes Many farmers say hedging is too expensive. However, there is an approach that can provide both relatively cheap price insurance plus an opportunity to enhance revenue. It’s also an approach that creates an opportunity to separate and take advantage of market movement both on commodities and on currency. Options Buying a futures option is insurance: […] Read more
Assessing risk in the farm business
AME Management: Develop a heat chart to see how your business can be impacted by adversity
Reading Time: 3 minutes The process of assessing risk in a farm business is no different than in any other business. In agriculture, however, the types of risks in agriculture can be unique. How an individual views risk, how much they want to accept and how they manage it varies from person to person. Even so, there is a […] Read more
Finance metrics you may not have thought of — measuring financial risk
AME Management Part 3: How balance sheets and operating statements help determine your exposure to risk
Reading Time: 3 minutes The first two columns in this three-part series focused on using the operating statement to monitor operating efficiency and to diagnose operating problems. In this column, we turn to the interaction between the balance sheet and operating statement to identify and manage financial risk. This is very topical currently because of concerns that lower grain […] Read more
Finance metrics you may not have thought of — diagnosing operating inefficiency
AME Management Part 2: The importance of watching and understanding trends and comparisons
Reading Time: 3 minutes Our last column introduced the concept of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and used it to define Operating Efficiency Ratio, (EBITDA/Total Revenue). With some exceptions, financially successful farms have Operating Efficiency Ratios above 35 per cent, i.e. with at least 35 cents left from every dollar of sales after paying all non-capital […] Read more
Finance metrics you may not have thought of — operating efficiency
AME Management Part 1: Basic financial tools to help determine your operating income
Reading Time: 3 minutes In good times or bad, there are some basic financial tools that allow farmers (and other managers) to gauge their operating efficiency, diagnose where they have problems, and measure the financial risk they are bearing or are about to undertake when they make a substantial investment. We find, however, that we hear very few people […] Read more
Would your farm business benefit from an advisory board?
Reading Time: 3 minutes A number of farm businesses have already appointed or are considering either a board of directors or an advisory board to help them define and execute on their strategy. In this article, several considerations in developing an advisory board are addressed. How does it differ from a board of directors? Why have one? How do […] Read more
Strategy: The foundation of your farm
AME Management: “If you don’t know where you’re going, any road will get you there.”
Reading Time: 3 minutes Many businesses, in farming and elsewhere, have no formal plan. Some are happy with the result, many are not. But many discover that developing a strategic plan and carefully implementing it has two effects. First is that it helps identify the desired outcome (where you’re going, your vision for the future). Second, it identifies the […] Read more
A message from April Stewart, Country Guide's Associate Editor
