# Farm and Agriculture Cash Flow: A Management Playbook Source: https://www.cashflowforecasttemplates.co.uk/guides/farm-agriculture-cash-flow-guide Updated: September 25, 2026 > Farm cash flow is managed around the production calendar: forecast input purchases and harvest or livestock sales by month, size operating loans to the gap between them, plan crop marketing and storage decisions with cash in mind, test price and yield scenarios, keep a reserve for poor seasons, and repay operating credit from harvest before spending the surplus. A farm’s year is shaped by seasons that no forecast can change, and its cash flow follows them: money goes out for months before any comes back. The farms that manage cash well plan the whole cycle in advance, borrow for the gap rather than for the shortfall, and treat marketing decisions as cash decisions. This playbook covers the routine. For how farm cash flow works and a worked crop-calendar example, see the [farm cash flow forecast page](/cash-flow-forecast-template/farm). ## Build the forecast from the production calendar List every major cash event by month: - **Inputs:** seed, fertiliser, chemicals, feed, fuel, when each is paid - **Labour:** seasonal and permanent - **Land rent:** often once or twice a year - **Equipment payments and repairs** - **Operating loan draws and repayments** - **Sales:** harvest, stored grain, livestock, contracts, custom work - **Program payments and insurance indemnities**, when expected The forecast should run at least from one harvest to the next, so the full gap is visible. Many farmers find an 18-month view useful, covering the current season and the start of the next. ## The monthly routine 1. **Actual receipts and payments** against forecast. 2. **Input purchases** made and still to come this season. 3. **Operating loan balance** and remaining facility. 4. **Crop or livestock marketing** position: what’s sold, what’s stored, what’s contracted. 5. **Price and yield outlook** against forecast assumptions. 6. **Lowest cash point** before the next major sale. ## Sizing operating credit The operating loan should cover the deepest point of the gap between input spending and sales, with a margin for lower prices or yields. Too small, and you’re short at planting; too large, and you pay interest on money you don’t need. The forecast shows the right size and when repayment comes from sales. ## Input purchasing Early-order discounts and prepayment can save money, but they pull cash forward. Compare the discount with the interest on borrowing the cash and the risk of paying early. Stagger purchases to match cash where suppliers allow. ## Marketing and storage decisions Selling at harvest brings cash in quickly; storing may bring a better price but adds storage costs, interest and price risk. Forecast both options: when the cash arrives, the storage and interest costs, and whether the farm can meet its obligations while waiting. Forward contracts and staggered sales spread price risk and smooth cash. ## Livestock For livestock operations, forecast feed, veterinary costs and purchases against sale dates. Weaning, finishing and sale timing all move cash by months. Build in mortality and weight assumptions, and test a price drop at the point of sale. ## Scenarios Farming carries price and yield risk that most businesses don’t. Build at least: - **Low price:** 15 to 20 percent below your expected price - **Low yield:** a poor season’s yield - **Both together:** the stress case The stress case tells you how much reserve or credit the farm needs to survive a bad year without selling assets. ## A worked season An arable farm starts October with $110,000 after last year’s harvest sales. The forecast shows harvest income of $300,000 in October and November, an operating loan repayment of $175,000 in November, land rent in December and June, and inputs of $70,000 a month in March, April and May, funded partly by an $80,000 operating loan drawn in March and April. The low-price scenario, with crop prices 20 percent lower, shows cash falling below zero in June. The farmer decides to forward-sell 30 percent of the expected crop at current prices, keeps $40,000 of reserve untouched until after planting, and agrees with the lender that the operating facility can extend by $50,000 if prices fall. The stress case now stays positive. ## Diversifying income Custom work, contract growing, direct sales, agritourism and renting out land or buildings can bring income at different times of year from the main crop or livestock sales. Even modest off-season income narrows the gap the operating loan has to cover. Forecast each stream on its own line, with its real timing and costs. ## Family living costs On many family farms, household spending comes from the farm account. Include a realistic monthly amount for family living in the forecast, rather than taking whatever is left. Lenders will ask, and a clear figure makes both farm and household planning easier. ## Reserves Keep part of good years’ income as a reserve for poor ones. A reserve covering a season’s input costs gives the farm choices in a bad year, and strengthens the lender relationship. Build it gradually: a fixed share of every good year’s surplus is easier than a single large target. ## Equipment Machinery is a major cost. Time purchases for after harvest, when cash is strongest, compare financing options, and consider sharing, leasing or custom hire for equipment used only a few weeks a year. ## Working with your lender Agricultural lenders usually want an annual cash flow plan before the season, updates during it, and actual results after harvest. Share the plan early, include the stress case, and report changes such as a poor yield or price drop as soon as you know. A lender who understands your plan is far more able to help in a difficult year. ## Warning signs - Operating loan not fully repaid from harvest - Input purchases on credit carried into the next season - Stored crop held for price while bills go unpaid - Equipment payments rising faster than income - No reserve after a good year - Family living costs rising faster than farm income ## When cash gets tight 1. Talk to your lender early, with an updated forecast. 2. Review marketing: sell stored crop or livestock to meet obligations. 3. Defer non-essential equipment and improvements. 4. Negotiate input supplier terms for the next season. 5. Check eligibility for government programs or insurance claims. ## Tools The premium [Farm & Agriculture template](/templates/farm-cash-flow-forecast-template) includes a Crop Calendar tab for harvest sales, input purchases, program payments and operating loan draws and repayments, scenarios for price and yield, and a dashboard. See also [seasonal cash flow](/guides/seasonal-cash-flow-how-to-plan-for-slow-months) and [scenario planning](/guides/cash-flow-scenario-planning-best-expected-and-worst-case). ### Why is farm cash flow so uneven? Inputs are paid in the months before planting, while most income arrives at harvest or when livestock are sold, sometimes many months later. ### How big should a farm’s operating loan be? Big enough to cover the gap between input costs and sales income at its deepest point, with a margin for price or yield shortfalls. ### Should a farm sell at harvest or store crops? It depends on prices, storage costs, interest and cash needs. A cash forecast shows whether you can afford to wait for a better price. ### How can farmers plan for bad years? Build a low-price and low-yield scenario, keep a cash reserve from good years, use crop insurance where available, and agree credit before it’s needed. ### What do lenders look for in a farm cash flow plan? A realistic production plan, input costs, conservative price and yield assumptions, loan draws and repayments, and evidence the farm can repay operating credit from sales.