When the economic times in ag are tough--as they have been recently--many farmers have found it extremely helpful to know their true breakevens. Maintaining a current calculation of breakeven points is very important to help a farmer gauge the viability of potential purchases and investments. If you don't have accurate and up-to-date financial information for your operation, you're left to just take a guess at the farm's current financial state...And that's dangerous.
Sometimes it's necessary to enlist the help of a financial advisor to get a handle on things. If you haven't gotten a full financial analysis of the operation, now's the time. It's the best place to start, and from there you can do updates as necessary to keep your breakevens current. Darren Frye has a few questions to ask yourself to see if you're getting the most out of your farm's number, and you can read the full article in his Finance First column at FarmFutures.com.