Cost of production is the farm's real dashboard
A farm cannot set its selling price, so the number that matters is what each unit costs to produce: dollars per acre for cash crops, per head or per hundredweight for livestock. Seed, fertilizer, chemicals, fuel, custom work, land cost whether rented or owned, and a machinery charge per acre all roll up into a break-even price, and once that break-even exists, marketing stops being guesswork. A forward contract offered in June is either above your number or it is not. We build the cost model from the field-level detail already sitting in AgExpert or QuickBooks Online and keep it current through the season, so pricing decisions happen against this year's costs rather than a three-year-old gut feel.
Land deserves a model, not an auction reflex
The buy-or-rent question is the largest capital decision most farm families ever face, and it is usually decided in the emotional heat of a neighbour's auction. The model is calmer: what the parcel adds to contribution margin at realistic yields, what the debt service costs at quoted rates, and what happens to working capital in a poor year with the new payment in place. Rented ground wins that comparison more often than pride likes to admit; owned ground wins when the balance sheet can carry it through two bad crops in a row.
Financing structure decides how survivable the answer is. Farm Credit Canada, the chartered banks and vendor take-backs each price and covenant differently, and every one of them reads accrual statements, not the cash-basis tax return that understates a growing operation. Walla Assaf, CPA came to public practice from banking and corporate finance, so the Business Financing Advisory file is built the way a lender actually reads it, with compilation engagement statements where the credit file needs them.
Risk gets bought, matched or carried
Ontario gives a farm a stack of risk tools, and a CFO's job is deciding which risk each one covers and what remains on the balance sheet. The residual layer is working capital, and we set its target in months of operating costs, then defend it in the years when equipment temptation runs high.
| Risk | Tool | What it actually covers |
|---|---|---|
| Yield loss to weather or pests | Production Insurance (Agricorp) | Yields falling below your insured level, by crop |
| Price declines on covered commodities | Ontario Risk Management Program | Market prices falling below support levels |
| Whole-farm margin collapse | AgriStability | Margins dropping more than 30% below your reference margin |
| Small dips and timing gaps | AgriInvest | Your own deposits, government-matched on the first 1% of allowable net sales |
| Everything else | Working capital | Months of operating costs held as cash and open credit |
Participation is a yearly decision with real premiums and paperwork, and the honest analysis depends on your own reference margins and crop mix, not on what the coffee shop says. We model where AgriStability would actually trigger for your operation before renewal, so staying in or stepping out is a calculation instead of a habit.
Succession is a financing problem wearing a family face
Most farm succession plans fail on arithmetic, not affection: the price that funds the parents' retirement is a debt load the successor's margins cannot service. A CFO's contribution is the honest middle, modelling what the operation can pay at realistic commodity prices, what the parents genuinely need, and how rollovers, gradual transfers and off-farm assets bridge the gap. The tax mechanics of the transfer belong to planning; the CFO work is proving the plan cash-flows for both generations for a decade.
Fractional CFO for a farm runs as a steady cadence, monthly or quarterly reviews against the cost model, plus a working session before any six-figure decision: the land bid, the quota purchase, the machinery trade, the succession term sheet. You keep the wheel; we keep the instruments honest. The fee is set out in writing after a free 15-minute discovery call.
