Help for a Family Farm in a Financial Crisis
A family that owns a farm and is in financial trouble must work toward a common goal or risking losing the entire business. A variety of factors can hinder a farm's productivity and output, including bad weather, pest infestations, a poor crop season and livestock illness.
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Cutting Expenses
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A family farm in trouble must look at the daily costs that can be cut from the farm's current operating budget. Services that are being outsourced should be taken on by the family members instead. Some items, such as feed, can be downgraded to save money. The downgrading of food by purchasing a less expensive type should be carefully studied, because the nutrients in the new food need to be sufficient for the livestock.
Selling Off Assets
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Unnecessary equipment can be sold off to raise cash for a financially strapped farm. Newer models that would fetch more money on the market should be considered first if the family has older, reliable equipment that can perform the same function. Livestock, especially animals for breeding, can be sold if the sale would not dramatically slash the farm's output.
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Mortgages
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The family farm can be mortgaged for a cash influx, or, if the farm is already under a loan, refinanced, depending on the financial situation of the owners. Refinancing, or getting a new mortgage to pay off existing loans, results in lower monthly payments if the lender's credit criteria are met. The owner may be able to borrow against his existing equity, or the percentage of his land he owns free of other loans, when he refinances, enabling him to receive cash proceeds from the mortgage.
Branching Out
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A farm that produces a specific set of products benefits from creatively expanding the output type during financial troubles. A family farm that produces mainly apples can make and sell other apple products at very little additional cost for a higher profit, such as homemade apple pies. Some farms take advantage of the holiday seasons by offering small events during which themed farm crops can be sold, such as a pumpkin festival before Halloween.
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