Financial Planning Insights To Keep Your Farm Growing

Like many peers in other regions, growers in the western U.S. are grappling with an unsettled market, which could make the path to success in 2026 less than direct. There is an overarching feeling of uncertainty for growers. We are not necessarily in a crisis, but global competition, cost pressures, shrinking margins and new regulatory pressures, specifically in California, are complicating decision making when it comes to profitability.

Two important elements of many farm plans in our region include water access and labor, both of which are highly volatile right now because of recent regulations and changing policies. Growers are navigating a more conservative credit market, tighter access to capital, and the added uncertainty of tariffs, which is making an already difficult puzzle that much harder to put together.

Here are a few financially focused considerations that may help growers respond to uncertainty, build flexibility, and potentially position their operations to capitalize on opportunities.

DEVELOP A CAPITAL MANAGEMENT PLAN

Financing options are still plentiful, but in a tighter credit environment like we are in, it is helpful to know how you intend to spend your budget. An intentional capital management plan, built with a clear understanding of what you need to spend and where, makes it easier to evaluate financing offers strategically.

Creating this clarity starts before you shop for financing. Mapping expenses and cash flow needs against expected harvest revenue, which may also include storage fees if you do not plan to sell immediately, can provide a clearer view of where potential gaps may exist, and what kind of capital makes sense to fill them.

This exercise will look different depending on what you are growing. For example, table grapes are among the most labor-intensive and input-heavy crops in the region, with costs front-loaded well before any crop income is captured at harvest. Understanding your spending needs over time can help you build a strong foundation for managing capital, and once that picture is clear, you can focus on borrowing costs.

Comparing terms, rates, origination fees, early payment penalties, and promotional rate structures associated with a financing offer might take some time, but it is a worthy exercise to build a little extra cushion around your margins by avoiding overpayment on borrowing costs. In a year where inputs, labor, and cash rents continue to pressure profitability, the details behind borrowing costs are important.

MANAGE YOUR RISK

The ag industry has always run on a baseline acceptance of variability. Even with orchard farming, which has less year-to-year volatility compared to row crops, no two seasons are alike. It is natural to shy away from long-term planning, but along with capital management, it is a task that can meaningfully influence your risk position, particularly now when so many variables can dramatically impact your bottom line.

For example, the Sustainable Groundwater Management Act (SGMA), which requires local agencies to manage groundwater sustainability, has complicated the risk position for growers in the Central Valley of California. They don’t know how much water is actually available and at what cost, making planting decisions more difficult. Labor costs and regulatory complexity, like we are seeing with SGMA, also add risk pressures on top of price uncertainty and changing consumer demand trends. All this variability means growers may have less financial flexibility than they had in the past.

The good news is that long-term planning can help you manage risk associated with all these variables, and it requires flexibility rather than certainty. Even a rough projection built on prior years’ expenses and realistic inflation assumptions gives you a general breakeven point to measure decisions against. With this planning framework, you may find more clarity and confidence in how much risk your operation can absorb. For tree nut growers in particular, that view can be especially helpful in managing acreage decisions and investments over the long term.

BOOST YOUR OPTIMISM BY FOCUSING ON WHAT YOU CAN CONTROL

While the industry is recalibrating and crop markets transition through various stages of correcting, recovering, or booming, you might benefit from coming back to the basics and getting clear on your financial position.

A productive path forward is likely to start at the intersection of good farming and sound economics, which are two fundamentals that you can control to influence outcomes. How you execute your agronomic plan, how you manage your costs and stick to budgeting discipline — these variables often serve as the building blocks of profitability, and your decision making here can still have a profound impact on success.