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Top farmers are exceptional at financial management, as well as focusing on physical farm performance, farm consultant Gareth Baynham says.

Gareth, who is a beef and dairy consultant in Northland with AgFirst, noticed when he attended discussion groups and monitor farm days the focus was on the physical side of farming, how to increase revenue, with very little mention of the financial aspect.

“As one farmer said to me ‘who goes farming to look at numbers all day Gareth?’ But when we look at our best clients, they are all extremely good at managing the financial side, as well as the physical side, of farming.”

Farmers who are striving to achieve a goal could benefit from a fifty-fifty focus on tightening up what they do in the financial management space as well as refining the cows and grass side of their business, he says.

“We have had guys using BankLink but when we are really trying to analyse, in-depth, what drives their business, something like Cashmanager is so much more powerful.”

The budgeting feature is what Gareth uses most, as well as looking at trend reports and different scenarios.

For many of his dairy clients, the last few seasons have been particularly tough, and scenario planning has been important.

“You can put in a $4.25 milk price at the start and being able to update it is handy. We can try different price scenarios and see what impact it will have. For me, that’s critical. People always say ‘the budget is wrong’ and I don’t disagree, but it’s the ability to keep an original, revise the budget as you go along and look at different scenarios.”

This season, it’s been the milk production that’s challenged farmers and their financial management.

“Milk production has been back in the North Island this season. We didn’t have a peak, we had a very flat curve. We were in the middle of October wondering ‘what is happening?’ It was about trying to salvage the rest of the season. The milk price was up but production was down, so we had to look at what the net effect would be.”

Gareth says the use of a product like Cashmanager is ultimately about farmers having confidence and feeling in control of their decisions.

Finances are one thing you can control in farming – what you are planning to spend and make, and being able to adapt to change.

“It’s incredible how many farmers you work with who have never really cracked the financial or budgeting side…Guys who have done it all (moved to Cashmanager) look back and say ‘I wish I had done this 15 years ago, being able to understand and feel in control of where I’m going’.

“It really is staggering, I can’t think of one of our top farmers, production and profitability wise, who don’t have a really good financial focus. And the overwhelming majority of them use Cashmanager,” Gareth says.

“Clever farmers have worked it out, that farming is a business and the stock and grass is just one part of it.”

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