For most agricultural producers, February is the moment of maximum financial clarity. Planting has not yet started, but all key technological decisions have already been made. The crop structure is clear, the list of resources is finalized, and work schedules are outlined. And it is at this moment that many farms face a simple and unpleasant fact: there are not enough funds to implement everything planned.
This situation is not exceptional. On the contrary, it is typical for agribusiness with a classic production cycle, where costs arise long before the first revenue is received. The problem is not that agribusiness is “performing poorly,” but that the financial logic of agriculture differs significantly from most other businesses.
Why a shortage of funds before planting is a systemic problem, not a management error
Agribusiness operates under conditions of a long cash conversion cycle. Costs are concentrated at the beginning of the season, while income appears several months later. Even in stable farms with predictable yields, this time gap creates liquidity pressure.
Additionally, several factors influence the situation. First, seasonal price fluctuations for seeds, fertilizers, crop protection products, and fuel. Second, the need for advance payments or purchases “ahead of time” to lock in terms. Third, parallel obligations—rent, taxes, personnel costs, equipment repairs.
As a result, agribusiness finds itself at a point where all costs are real and unavoidable, while revenues are future and deferred in time. This creates the illusion of a shortage of funds, when in reality it is a gap between the moment of expenditure and the moment of receipts.
Why “waiting it out” or “somehow managing” is the worst strategy
When there is not enough money for planting, many farms choose the tactic of postponing decisions. Purchases are moved “to later,” some operations are performed outside optimal timeframes, and technology is adjusted to available resources. At first glance, this seems like a rational solution, but this is where future problems are laid.
Planting does not forgive compromises. Any deviation from technology, even minimal, multiplies over time and transforms into losses in yield or product quality. What looks like savings today often turns into lost income at the end of the season that far exceeds the initial “savings.”
That is why a shortage of funds before planting is not a question of survival “at any cost,” but a question of proper risk management.
Where to start if funds are objectively insufficient
The first and most important step is a complete financial inventory up to the moment of receiving the first revenue. Agribusiness needs to clearly understand not only the total amount of costs, but also their distribution over time. When exactly does the peak load occur? Which payments are critical, and which can be shifted without harming processes?
In practice, it often turns out that the problem lies not in the total volume of funds, but in the fact that costs “overlap” with each other. Without such analysis, any decisions will be intuitive and risky.
Costs that cannot be touched, and costs that can be managed
One of the key mistakes is trying to cut all costs equally. In reality, agribusiness has a clear division between costs that form the harvest and costs that affect it indirectly.
Saving on basic elements of technology almost always leads to a decrease in results. On the other hand, there are costs that can be optimized by reviewing delivery terms, supply conditions, logistics, or internal processes. The manager’s task is to find this balance, not to cut the budget “to the bone.”
Time as a money management tool
When there is not enough money, agribusiness starts looking at finances exclusively through the lens of amounts. However, time is an equally important resource. The ability to change the timing of an expense often has the same effect as reducing its size.
Distributing payments over time, synchronizing costs with the production cycle, postponing certain stages without harming technology—all of this allows reducing the peak load on liquidity. This is the modern approach to financial management in agribusiness.
Why financial flexibility is more important than a “perfect plan”
Even the best financial plan will not withstand the reality of the season without flexibility. Weather, market, logistics, prices—everything changes faster than budgets are updated. When agribusiness enters the season with a rigid financial structure, it loses the ability to respond.
Flexibility is not about the absence of a plan, but about the ability to adapt without losing control. It is what allows not only getting through planting, but also maintaining control over the business throughout the entire season.
Shortage of funds as a signal for strategic changes
If the situation of insufficient funds repeats year after year, it means the problem lies deeper than one season. This is a signal to review the farm’s financial model, planning approaches, and cash flow management.
Winter is the best time for such decisions. Right now, agribusiness has time not only to “patch holes,” but also to establish a different logic of financial management for the future.
