Cash Flow Forecast Template for Farms

Farming has the longest gap between spending and income of almost any business. Seed, fertiliser, fuel and labour are paid in spring and summer; the crop is sold months later, sometimes stored and sold later still for a better price. Operating loans bridge the gap, and have to be repaid from harvest. A farm cash flow forecast built on the crop calendar is what lenders expect and what keeps the farm solvent through the year.

Why farm cash flow is different

• Income is seasonal and lumpy. Harvest sales may bring in most of the year’s revenue in two or three months.
• Inputs come first. Seed, fertiliser and chemicals are bought months before harvest.
• Operating loans are drawn and repaid. Many farms borrow for inputs in spring and repay after harvest.
• Prices and yields vary. Weather and markets can move income by 20 percent or more from one year to the next.
• Land rent and machinery are big fixed costs. Rent may be paid once or twice a year, and equipment payments are large annual or semi-annual amounts.

A worked example

An arable farm starts October with $110,000. Harvest sales bring in $180,000 in October and $120,000 in November, and stored grain sells for $90,000 in February. Inputs of $70,000 a month are bought in March, April and May, funded partly by an $80,000 operating loan drawn in March and again in April. Land rent of $60,000 is paid in December and June.

November is the biggest cash-out month because last season’s operating loan is repaid from harvest income. June is the tightest point of the season: inputs are paid, land rent is due, and the next harvest is still four months away. The forecast shows how much of the harvest to hold back, and how big the operating loan needs to be.

How to build a farm cash forecast

1. Lay out your crop and livestock calendar for the year.
2. Estimate sales by month using expected yields and conservative prices.
3. Schedule seed, fertiliser, chemicals, fuel and labour when they’re paid.
4. Add operating loan draws and repayments, land rent and equipment payments.
5. Include government program payments when they’re expected.
6. Build a low-price or low-yield scenario.

Common mistakes

Budgeting on last year’s prices. Forgetting that stored grain has storage and interest costs. Spending harvest income before the operating loan is repaid. And not planning for a poor season.

What the template gives you

The Farm & Agriculture template includes a Crop Calendar tab where you list harvest sales, input purchases, program payments and loan draws and repayments with their months. The forecast updates as you move a sale or a purchase, and the scenario switch shows the effect of a lower price or yield.

Key assumptions built into the Farm & Agriculture template

• The Crop Calendar tab lists large, irregular payments with the month each starts, how many payments there are and how often they repeat. The example includes harvest sales, harvest sales, stored grain sale, program payment and operating loan draw. Each one is routed to the right line of the forecast, and there are spare rows for your own.
• 5 cash in lines and 8 cash out lines are already named for farm & agriculture businesses, and every one can be renamed or extended. Loans and investment (operating loan draws) are kept out of the runway calculation and don’t grow automatically in the 3-year outlook.
• The example figures follow a fairly even year, which suits most farm & agriculture businesses; add your own seasonal pattern if you have one.

Every assumption sits in a yellow input cell, so you replace the example with your own numbers in minutes. The same figures flow through a 13-week weekly view, a 12-month monthly view and a 3-year outlook, and a dashboard shows your lowest balance, the weeks that fall below your minimum buffer and your cash runway.

Free or premium?

If you only need the basics, the free 12-month template or the free 13-week template will get you started today. The premium Farm & Agriculture template saves the setup time and adds the tabs above, best and worst case scenarios, and an actual vs forecast tracker that shows where your forecast was wrong, so next month’s is better.

Farm & Agriculture cash flow forecasting: questions

Why do farms need operating loans?

Because inputs are paid months before harvest income arrives. An operating loan funds seed, fertiliser and running costs and is repaid from crop sales.

How should a farm forecast crop income?

Use expected yield times a conservative price, in the months you plan to sell, and test a lower price or yield in a worst-case scenario.

What do lenders look for in a farm cash flow forecast?

A realistic crop and livestock plan, input costs, loan draws and repayments, and evidence the farm can repay operating credit from harvest income.