Navigating Financial Fitness for New Zealand Farmers: Insights from the “Get Financially Fit” Webinar

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In a recent webinar hosted by CMK Chartered Accountants and presented by Sally Coombe, a Chartered Accountant, she presented a guide to achieving financial fitness in preparation for the 2024-2025 dairy season. The session, aimed at equipping dairy farmers with the knowledge to navigate the year ahead, highlighted the importance of thorough financial planning and being operationally ready heading into the new season.

Sally opened the discussion highlighting the dairy industries dynamic nature, marked by fluctuating milk payouts, varying operational costs, and unpredictable weather patterns. These factors mean that that farmers need a robust understanding of their financial health to manage their business. Sally illustrated how essential it is for farmers to be aware of their financial position, especially as they approach the winter months when funds traditionally tighten due to lower milk payments.

A vital part of this as highlighted by the webinar was dedicated to understanding and managing cash flow, with Sally explaining the calculation of break-even points using the Dairy Women’s Network calculator and the importance of cash flow forecasts. These tools are crucial for farmers to determine the minimum milk price needed to cover costs without any financial loss. By accurately predicting this, farmers can make informed decisions about their income strategies and any changes they may need to make to their farm working expenses.

Operational readiness was another important topic. Sally stressed the importance of being well-prepared beyond finances. This includes ensuring compliance with environmental regulations, maintaining equipment, managing feed inputs, and handling labour requirements effectively. Each of these components plays a vital role in the smooth operation of a farm and can lead to significant financial implications.

The webinar also addressed the tools available to farmers for managing financial risks, such as the fixed milk price option from milk supply companies, which allows farmers to lock in a portion of their milk solids at a set price. Understanding these options can provide stability in an industry known for its volatility and can help farmers have some certainty.

Advice and support from a team of professionals, including accountants, farm consultants, and bankers, were highlighted as invaluable. These experts not only provide dairy farmers with advice tailored to the unique needs of each farm but also offer a full support system to help farmers navigate uncertain times.

The webinar highlighted the very important need for financial fitness as farmers head into next season. Farmers face a landscape of significant economic and environmental changes, and having financially understanding about their business is no longer just beneficial, it’s crucial for sustainability and success.

CMK Chartered Accountants continues to offer guidance and support to farmers across New Zealand, ensuring they are well-equipped to meet their financial goals and overcome the challenges of the coming seasons. If you missed the webinar, the link is available HERE.

If you are wanting any specific advice for your farming business, please do not hesitate to reach out to Sally to arrange a consultation.

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