Intensive Financial Management and Planning Support (IFMAPS) Damona Doye OSU Extension Economist damona.doye@okstate.edu 405-744-9836 Hi, I’m Damona Doye… In this segment, I want to introduce you to the IFMAPS program, the acronym for Intensive Financial Management and Planning Support, a special program of the Oklahoma Cooperative Extension Service. IFMAPS provides confidential business planning assistance to Oklahoma farm and ranch families. Assistance may consist of budgets for farm enterprises from wheat to sorghum, from watermelons to stockers, or financial statements, including a cash flow plan, income statement, balance sheet, debt worksheet and financial ratios. The aim is to help producers better understand their business financial position and performance over time, to help them make informed decisions and to encourage them to be proactive in managing their finances.

What is IFMAPS? A confidential service assisting Oklahoma farmers and ranchers with financial planning since 1985 Specialists work with farm families one-on-one to develop financial statements and evaluate alternative plans IFMAPS began operations during the farm crisis in the mid-1980s. It has continued to provide confidential one-on-one assistance to farm families since then. Farm families work with our area agricultural economics specialists or specially trained part-time Extension employees with farm backgrounds and economics training to prepare budgets and financial statements that provide insights into the business financial performance and position. Families and specialists may also collaborate in looking at alternatives.

Examples of Analyses Completed Can we purchase additional land (or machinery and equipment) and make it pay? How can our operation earn enough income to support a second generation? What is income likely to be with a scaled down herd or changed livestock enterprises? How will a new enterprise impact finances? Documentation for loan applications, Ag Diversification grants, etc. Some examples of alternatives for which producers have asked for assistance are about the financial feasibility of a project or plan, for instance: They may want to know how to expand the operation to generate enough income to support a second generation. Or perhaps drought has forced them to scale back the herd and they’re wondering what kind of income to expect or how they might plan longer term to rebuild the herd… Or the operators may be thinking about slowing down and want to know whether a smaller operation will generate sufficient retirement income. Maybe a new producer is thinking about getting established or an established producer is thinking about trying something new or different and wants to know what to expect financially. While we don’t fill out forms, the financial statements that we prepare for farm families may also serve to meet requirements for grant and loan applications.

IFMAPS can Prepare crop/livestock budgets plus financial statements Cash flow Balance sheet Income statement Financial ratios Identify strengths and potential areas of improvement in the whole farm plan Provide an objective point of view The typical process is to prepare both budgets and financial statements which are used in combination to project financial ratios. Analyzing the business using these tools helps identify both strengths and weaknesses in the operation. By comparing costs to industry benchmarks, opportunities to improve can be identified. ratios. …This process helps producers think about where they've been, where they are now, and look ahead to future outcomes. And it provides realistic insights. The specialists provide an “outsiders” perspective on things, which can be very helpful.

What farmers and ranchers say: “…helps individuals look at their overall program and see what pays and what does not.” “The information received was very important in establishing future plans for my farm operation.” “I think it’s a tool all of us in production need to use. It puts it on paper to see, what a lot of us assume we know. I appreciate what you are doing.” Here’s what farmers and ranchers have said about IFMAPS assistance:

IFMAPS Process Producer initiates contact with IFMAPS 1-800-522-3755 Case is assigned to local IFMAPS specialist IFMAPS specialist contacts producer to discuss information needed Producer gathers and summarizes farm records The process is straightforward:

IFMAPS Process (continued) IFMAPS specialist and producer arrange a mutually convenient time to meet IFMAPS specialist uses computer software to summarize data gathered into enterprise budgets and financial statements

IFMAPS Process (continued) IFMAPS specialist reviews the financial statements with the producer Confirms data is correct Discusses financial situation and expected performance Helps develop alternatives to be analyzed, if any IFMAPS specialist generates financial statements for alternative plans and reviews them with the producer

Cost? An upfront fee of $200 for the initial consultation and data-gathering session. An additional $300 payment upon completion of the budgets, financial statements and follow-up consultation. $50 per hour for more complicated cases or evaluation of alternative plans (more than 15 hours of consultation). Oklahoma State Marketplace (Agricultural Economics store) https://secure.touchnet.com/C20271_ustores /web/product_detail.jsp?PRODUCTID=1901 The program is fee-based….. The funding is used to provide wages for the employees, cover their travel expenses, purchase software, and maintain computers and printers. The costs are nominal compared to the valuable insights gained from the business analysis.

Producers Gain Improved understanding of the farm’s financial position and performance Assistance in identifying strategies to improve the farm finances Referrals to other agencies and programs where appropriate Producers know a lot about crop production and livestock production, but IFMAPS can help them with better understanding the business side. We work with the families to encourage them to be proactive in managing their finances so that they can take advantage of opportunities as well as take control of problems before they get out of hand. Being linked with others in the Oklahoma Cooperative Extension Service means that we can point you to other specialists to help with forage management or production problems for instance or to government agencies that may have helpful programs or resources.

What farmers and ranchers say: “It is a very good program. It puts information in order and perspective and makes it easier to understand.” Do something positive for your business today! Call IFMAPS... Don’t take our word for it. Other producers consistently rate the program highly and vouch for the insights they gain.

References www.agecon.okstate.edu/ifmaps At osufacts.okstate.edu: AGEC-239, IFMAPS: A Partner in Farm Financial Planning You may learn more about the program by reviewing materials online. Please contact your local Extension office or area agricultural economics specialist if you would like more information or are interested in having a program on this topic in your area.