400. Farm Business Farm Management’s Dwight Raab on data-driven decisions + balancing innovation with financial management

·29 min·2 clips

Dwight Raab reveals how farmers can balance cutting-edge technology adoption with financial survival amid volatile markets and high costs.

Host Kayla Chidester introduces the episode by framing the challenges farmers face, including market volatility and high input costs, and introduces guest Dwight Raab from Farm Business Farm Management. Raab provides an overview of FBFM, founded in 1924, with over 100 staff serving about 5,500 farms primarily in Illinois and Indiana, boasting a 95% retention rate. He describes the deep, multi-generational relationships FBFM builds with farmers, extending beyond accounting to include personal dynamics and transition planning. The discussion shifts to current economic headwinds, with Raab noting farmers have drawn on working capital for two years due to lower commodity prices. He stresses the importance of understanding working capital and debt-to-asset ratios, labeling a ratio over 50% as dangerous. Raab addresses tax policy under the 'one big, beautiful bill,' highlighting extensions of standard deductions, lower tax rates, and increased estate tax exemptions, while noting state-level variations like Illinois's $4 million limit. He identifies characteristics of successful farmers, including organized financial systems, awareness of key metrics, and proactive planning. The conversation explores balancing innovation adoption with financial management, with Raab emphasizing FBFM's role in sharing best practices and cautionary tales. Raab discusses succession planning amid estimates that 40% of U.S. agricultural land will change hands, stressing the need for good financial information and preparation for multiple heirs. He advises farmers to build a 2026 cash flow plan now using five-year APH yields and WASDE prices to anticipate tight scenarios. The episode concludes with Raab's key advice to know your 2026 cash flow in advance.

As heard by us

A grounded farm management episode about making innovation answer to cash flow, profitability, and the farm's future.

This PlayNext review frames farm economics as a pressure test for management: preparing for technology change, weathering another stretch of $4 corn and $10 beans, and deciding whether a purchase can earn its keep.

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Why you'd press play

You want to weigh a technology purchase before the farm's cash flow tells you the answer too late.

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