The farm still has debt. When it comes to the business we look at it a little differently. Although we would like to be free and clear, for us some debt is necessary to keep the farm in a profitable position. We are very cautious when it comes to borrowing money. We ask ourselves if:
1. It is a profit-generating project
2. If not doing the project will have a negative impact on the farm
3. Can we make the payment even if the market tanks?
4. Have we paid other debts off? ( or are we just be stacking another one on?)
5. Is it really needed? (or are we just being wishful in our tiredness?)
We also pay attention to things such as our net worth, asset: liability ratio, cash flow and other financial indicators.
Proverbs 27:23 "Be diligent to know the state of your flocks and herds."
From the beginning we have wanted to build a barn to house the cows in. It was our goal to save up enough money to do so. We still could, but we really need the barn now. In muddy/inclement weather situations we are using the same amount of space for 118 cows that we used for 60. Now that we own some equipment, we need to be able to put it inside for the winter to extend its usable life. So the plan is to use the old housing for storage for equipment & feed, and build new housing for the cows. The cows haven't complained about being out-wintered, but now the lanes will take less of a beating, the cows will be cleaner on the muddy days, and feed (read $$$$) will be saved now that it's under cover. It may also be a little bit easier to find or retain team members with a better facility. If not, at least we will enjoy it!
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| Signing on the loan for the new barn. I signed too, but someone has to take the picture! Look how happy the farmer is! He has worked so hard-now he can go at least another 34 years! |
Proverbs 22:7 The rich rule over the poor, and the borrower is slave to the lender.
We do not feel like we're a slave to our lenders. We feel more like we're on a team, working together to win the game of dairy farming. Truth is though, if we become irresponsible and make bad financial choices, we will have to do what they say, because they have a stake in our business. Until the last payment is made, it is our obligation to prove that we are worthy of their trust and investment. We honor God as best as we can by not taking on more debt than we can repay. We also sleep better. We encourage you to take a good hard look at your personal and business finances. The first step is often the hardest one to take, but it may be as simple as picking up a book, or making a list of debts you're going to focus on paying. What matters is that you take that step, or keep walking (for some of you) to reach your goals.
-Terri
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