The agricultural sector has been significantly impacted by world events and US government policies over the past few years. The combination of real estate devaluation and rising commodity prices are having negative impacts on dairy farmers and their suppliers.
The increased emphasis on ethanol, as well as the immobility in the blending cap, has stressed ethanol producers and negatively impacted any entity which relies on grain as an input. Chicken producers are feeling the stress of increasing feed costs with little sale price flexibility. Every aspect of agriculture is experiencing turmoil and uncertainty.
Agricultural enterprises are finding their collateral structures and cash flow both experiencing stress. Borrowers and lenders are searching for balance sheet structures and operating profitability metrics that will work in this environment.
Focus Management Group has experience in a broad range of agricultural related enterprises. Our professionals have hands-on experience in dairy, feed lots, chicken production and ethanol production.
Operating Performance Matrix© for the Agricultural Sector
One important aspect of agricultural enterprise analysis is an ability to evaluate multiple production and cost variables at the same time. To accomplish this, Focus Management Group has developed an Operating Performance Matrix© which is easily adapted to multiple types of agricultural enterprises.
When dealing with a dairy operation, for example, Focus Professionals consider the debt structure and the cost structure of the operation, and then overlay that information with varying prices received for milk, varying production per cow, and varying feed costs. When dealing with an ethanol producer, Focus Professionals consider the input costs of corn and natural gas, the price received for ethanol and by-product sales, and plant efficiency rates. This type of approach shows the operator and the lender the combinations of multiple inputs which will result in stabilized operations and financial performance.
Our portfolio of products offered to our agricultural clients includes:
- Corporate Bankruptcy Services
- Restructuring Advisory Services
- Interim Management Services
- Business Viability Assessment
- Operating Performance Matrix©
- Turnaround Management
- Asset Recovery
- Organizational Review
- Operational Process Improvement
- Cash Flow Optimization