From Results to Roadmap

Wednesday, December 24, 2025

Year-End Reviews Turn Numbers into Farm Strategies

By Emily Mckinlay

As the cropping season concludes, this transitional period between seasons is an ideal time for the farm management team to meet to review their production and financial performance to make decisions for next year.

A year-end review is an opportunity to check in with all the members of the farm and compare performance with goals and benchmarks. These reviews tell a story about the current state of the farm and can be used to set new goals for consecutive years and improve risk management strategies.

While many farms may have informal discussions about the year, taking the time to formalize a review and include a support team can be worthwhile.

Importance of a year-end review

A formal year-end review can help eliminate the speculation surrounding the farm’s productivity throughout the year.

Mark Wobick, a farm management consultant with MNP in Alberta, says that these discussions substantiate performance and financial outcomes.

“We want to validate where our clients are at,” says Wobick.

“We have a lot of clients around the Prairies who had decent yields this year. We have a lot of clients who think a big crop means big money, but with the high cost of production and prices being lower than they’ve been, a good yield times a poor price doesn’t necessarily mean they were super profitable.”

Wobick adds that it is better to review performance while the year is still fresh. He recommends starting by reviewing financial performance on an accrued basis to understand production and its impact on cash flow, working capital, and the balance sheet.

“We want to know these numbers at harvest rather than at the year-end,” says Wobick.

“You need to validate how you did now and understand what your performance was like for this year, because that affects what you are going to do next year. It’s the difference between making informed decisions versus uninformed decisions.”

Michael Menzi, a senior district director for Farm Credit Canada, explains that this helps identify areas for improvement while recognizing their strengths.

“A year-end review really helps producers take stock on their operation,” says Menzi.

“It identifies which areas are working well and can encourage questions like ‘Are there certain areas that we need to focus on, or are any areas not lining up?’ Being able to compare this year to previous years helps us dig into what is going on.”

A better understanding of the farm’s historical performance and the current situation can direct discussions about the farm’s future.

Menzi adds, “After a year-end review, we can assess future opportunities. Are there new strategies that we need to put in place? Have we identified risks or challenges that popped up unexpectedly? Should we be looking at forward contracting or hedging to manage risk with commodity pricing? Do we need to re-evaluate insurance or find ways to mitigate risk associated with weather-related challenges?”

To achieve the benefits of a formal year-end review, some preparation is required.

Preparing for the review

Which documents and datasets need to be compiled for a year-end review, and who should be involved in these discussions?

Menzi says that often the financial and production aspects of the farm are intertwined.

“The key areas to review are the production and financial sides of the business.

“Often those are intertwined and will tell a story. That gives a good macro-level overview of the farm.”

Wobick says that having updated books and records of inventory is an important first step.

“To better understand production, we should know yields per acre and bring crop insurance summaries. This helps quantify and verify how you did,” advises Wobick.

“There are a couple of other key things producers should have together in the fall. They should make sure their bookkeeping is up to date. This verifies what has come in for revenue and what has gone out for expenses.

“Inventories also matter. This helps with cash flow planning. What have you sold? What hasn’t been sold? This is critical to make a sales plan. Risk management documents should also be gathered.”

He suggests that producers tie in production economics and understand their cost of production to assess in their review.

Menzi recommends keeping good records throughout the year to ensure that all relevant factors in performance are recognized.

“Keep track of any key events through the year that tell the story of how and why the performance numbers were impacted,” says Menzi.

“On the production side, did everything go according to expectation or, if you are noticing a dip or increase, what variable impacted that? On the financial side, look at income and expense statements. You can compare that to the year before and see if you are gaining efficiencies or doing something that’s working well.”

Having the right members of the farm business and the support team present at a review is critical. The main decision-makers on the farm should be present, as well as other key team members. Involvement in year-end reviews can help employees feel involved and keep everyone working in the same direction. In addition to the farm operators, the advisory team on the financial side should be involved. That includes consultants, accountants, and potentially lenders.

“The starting point we suggest on the financial side is to sit down with your accountant. They are a valuable resource and a natural starting point for these discussions, and they can highlight areas they notice as important,” says Menzi.

“After that, have a sit-down with your financial institution and map out plans going forward. They can talk about areas they see as concerns and identify ways to work toward some goals.”

Wobick adds that the members of the advisory team can help assess the current financial status and next steps.

“Producers can discuss their capital budget and plans in the upcoming year, whether that’s buying equipment or land or expanding their livestock herd,” says Wobick.

“Be prepared to assess if you have the financial capacity or if you need more of a strategy with your lender.”

Menzi says that other members of the farm team can be consulted for the production side of the review.

“Livestock producers should sit down with their vet and feed representatives. Most producers are in touch with both throughout the year, but it is good to connect and talk about what they see as opportunities and areas to focus on,” says Menzi.

“On the crop side, producers should connect with their agronomist or input supplier to talk about potential tweaks to management based on what they’ve seen happen throughout the year.”

After reviewing the financial and production data from the current year, farmers can use the year-end review to start discussing goals and upcoming management decisions.

Looking to the next year

Understanding the full story of the current year’s production and financial status gives producers a basis for goal-setting.

“The information and reporting that comes out of a year-end review is critical. It tells you where you’re at and what kind of year you had. You can see what that means for your cash flow and how you plan out the next year, like whether you can go after that piece of capital or need to pull back,” says Wobick.

“It identifies – almost like an autopsy – where things went well or didn’t. For example, there are lots of farmers who don’t take crop or hail insurance, and a lot of guys say that they missed that mark by not taking out hail insurance this year. Now that you have good information, how can we use that to help cover off the risk better next year?”

Menzi says a year-end review can also help producers determine new targets for their production or finances.

“When you understand your operation, you can visualize previous trends and set new benchmarks for what you want to achieve,” says Menzi.

“Maybe that is working towards an expansion or a new project. It helps to be educated on what is happening on your farm to figure out how to realistically achieve the targets you want to set.”

Wobick recommends that any goals that are set should be measurable.

“This time of year, we recommend that farmers do a post-harvest review and immediately turn that into next year’s plan – What crops are they going to grow? What yields are expected? What prices are assumed, and how does that work into the farm?” says Wobick.

“We like to work with clients to set production and financial goals that can be measured. Many clients are expanding continuously. If they are going to add acres or another operation, one of the objectives should be building a projection to assess how that will impact their operation going forward.”

“If the goal is expansion, they need to model that out to see what the key success factors are to make that happen. They need to make budgets and try to not exceed the predicted expenses. Those are key goals that we can set, but we need to measure them throughout the year.”

Menzi recommends that small reviews throughout the year would be an opportunity to compare goals and current performance while there is still time to make changes to realign with those goals.

It can be difficult to make time coming out of a busy farming season, but making a point of reviewing the year allows producers to confidently plan their next farming season with more information and stronger goals. BF

SIDEBAR:

KEY TAKEAWAYS:

• A year-end review helps farmers see the real results of their yields and finances, not just bushels grown.
• Doing the review right after harvest gives better information for next year’s planning and risk management.
• Good records, updated inventories, and advice from accountants, lenders, and agronomists make the review more useful.
• These reviews guide clear, measurable goals for the next season and help set the farm up for growth. BF