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Weathering the Storm: 5 Financial Risk Strategies to Protect Your Farm

Iowa farmers know better than anyone: agriculture isn’t just a business; it’s a way of life. One built on grit, preparation, and the ability to adapt when conditions change. From unpredictable weather to rising input costs and tighter margins, staying financially strong requires more than a good season. It requires a solid long‑term strategy.

At Bank Plus, we understand the pressures producers face. Our ag lending team works with farmers across Northwest Iowa to build financial plans that reflect real‑world conditions, not one‑size‑fits‑all templates.

Today, we’re sharing five practical, focused strategies to help protect your operation from financial uncertainty and position your farm for long‑term success.

1. Strengthen Your Working Capital Cushion

Working capital — that is your short‑term financial safety net — is one of the strongest indicators of farm resilience. As operating costs continue to rise and margins tighten even further nationwide, maintaining adequate liquidity helps ensure you can weather surprises without jeopardizing next year’s crop.

Why it matters:

  • Cash on hand supports you during price swings, delayed payments, or unexpected repairs.
  • Strong working capital also improves your position when applying for or restructuring loans.

What you can do:

  • Review your balance sheet at least quarterly.
  • Work with your ag lender to adjust loan terms or restructure debt if liquidity tightens.

2. Diversify Revenue Streams to Reduce Exposure

Today’s ag landscape comes with more volatility in the form of higher input prices, shifting export demands, and unpredictable weather events. Adding supplemental income sources can help stabilize cash flow during difficult years.

Options Iowa farms are using successfully:

  • Livestock integration to balance crop fluctuations.
  • Custom services such as spraying, harvesting, or hauling.
  • Agritourism, farm‑to‑table products, or specialty crop trials.

Diversification isn’t about changing who you are as a farmer; it’s about strengthening the backbone of your operation.

3. Build a Written Marketing and Risk‑Management Plan

Hope isn’t a marketing strategy — and in challenging markets, timing is everything. A written plan helps protect your farm against reactive decision‑making and emotional price swings.

A strong plan should include:

  • Target prices for grain and livestock
  • Selling windows based on cost of production
  • Hedging tools you’re comfortable using
  • Crop insurance coverage levels that reflect your specific risk tolerance

Industry experts emphasize that “risk management should always be part of your plan” — especially when margins are thin and lending standards feel tighter.

If you’re not sure where to start, our Bank Plus team is here to walk through scenarios and help you find the right mix of coverage and marketing tools.

4. Control Costs Without Sacrificing Efficiency

When profits tighten, cost control measures become one of your most powerful levers. Across Iowa — and the nation — farmers face rising production expenses that are outpacing savings. But smart adjustments can make the biggest impact — and we’re not just talking about cuts.

High‑impact cost strategies include:

  • Equipment planning: keeping machinery expenses under 10% of gross revenue per acre whenever possible.
  • Right‑sizing input purchases: buy strategically, not automatically.
  • Repairing instead of replacing when safe and cost‑effective.

When you understand the true cost of production, you can make decisions that protect profitability year‑round.

5. Partner Early and Often With Your Lender

Strong communication with your lender is one of the most important financial risk strategies you can implement. In challenging cycles, early conversations lead to better outcomes, whether you need to restructure debt, access an operating line, or plan for growth.

At Bank Plus, we take pride in offering personalized guidance based on your farm’s unique goals, risk profile, and cash‑flow needs. Our ag lenders can help you:

Your Farm Is Built to Last. Your Financial Strategy Should Be, Too

Uncertainty will always be part of the agriculture business, but with a proactive strategy, you can build resilience into every season. By strengthening liquidity, diversifying income, planning your marketing approach, managing costs, and partnering with the right lender, you’re setting your operation up to withstand whatever comes next.

If you’re ready to take the next step, our ag lending team is here to help. Visit your local Bank Plus branch or connect with us online to start building a financial plan that supports your goals today and far into the future.