by Jordan Howe
Every generation of growers inherits a different set of challenges. For young growers today, the on-ramp to a successful career can be short, as they navigate tight margins, high land values and increased scrutiny when it comes to credit markets. How you respond to these challenges in the early years of your farming career may carry long-term weight.
This is why it’s so important to prepare yourself financially if you plan to transition into farm ownership or operatorship.
Financial literacy and discipline are key to building financial resilience that can carry you through various economic cycles. They also are useful to effectively manage your creditworthiness and make the most of land decisions that could positively impact farm profitability.
Here are three financial tenets to keep in mind as you work toward farm ownership or operatorship:
1. Strategic land decisions can drive sustainable financial growth. How you leverage your most important asset — farmland — in different stages of the economic cycle can impact your financial health. When conditions are strong and liquidity is high, adding acres and expanding your operation might feel like a worthwhile and attainable investment.
But when the cycle shifts and liquidity tightens, decisions shift from being growth-oriented to making the most of what you have.
That shift is happening right now, and it may create opportunities for young growers. As some strategically shed acreage to protect margins and stay profitable, land that was previously locked up may become available. If you find yourself with a chance to add acres, evaluate individual parcels carefully.
Which ones are net positives? Which ones drain resources? That level of granularity matters, especially when margins are tight.
Understanding the current land market can be helpful to make those tough decisions. Analysis from North Dakota State University found that cropland values increased almost 40% over the past four years, while cash rents rose at a far more modest rate — just 4.25% in 2025, about in line with inflation.
2025 data from the North Dakota Department of Trust Lands Annual Land Survey confirms that the spread between land values and cash rental rates continues to widen. This gap signals that the cost of land ownership is increasingly outpacing what the land can actually earn.
Conventional wisdom often favors ownership, but under current conditions, many growers will need to closely evaluate whether expected returns align with the cost of owning land.
Young growers may find other opportunities besides land ownership that better fit where they are today. Cash rents, while rising, remain more accessible than ownership costs at current land values.
Being strategic about which land you rent — by selecting parcels with a realistic path to profitability — might build a more sustainable financial foundation than chasing ownership at the wrong point in the cycle. Understanding how land decisions shift with market conditions, and anchoring those decisions to profitability rather than growth alone, may provide long-term financial advantages.
2. Smart money management is a catalyst for building cash reserves. If land is your most important asset, working capital might be viewed as a close second. Current assets minus current liabilities give you your working capital.
To get started as a career farmer today, your liabilities more than likely will outweigh your assets simply because startup costs — of land, equipment, infrastructure expenses, etc. — are high, even for young growers who stand to inherit an operation as their entry point to ownership.
Understanding your working capital position and managing it with discipline is another important habit for young growers to develop.
One approach to managing working capital is to evaluate alternative financing options for certain expenses. For example, rather than paying cash upfront for seed, fertilizer and crop protection products, financing is one option to consider as a means to preserve cash reserves and free up bank operating lines to meet other obligations that can’t be deferred.
Using strategic financing options to help manage cash flow and improve your working capital position can help you be more proactive with your financial strategy by timing cash outlays against your revenue cycle. It also allows you to keep your credit capacity open, which may help boost your creditworthiness.
3. Manage credit relationships and credit history. The capital needed to start or take over a family farming operation tends to put young growers in a highly leveraged position, with heavy dependence on credit to establish their financial footing.
As Dave Kohl observed in a recent Farmer Mac analysis, financial institutions are scrutinizing more variables today before lending money, including management behavior and communication patterns alongside hard numbers.
Borrowers are typically evaluated through the lens of the five C’s of credit: character, capacity, capital, conditions and collateral. Understanding this framework can help clarify how financial institutions evaluate lending decisions.
For example, paying bills on time and honoring your loan terms shows your financial character. Keeping your debt load manageable relative to your income is a measure of your capacity. And being transparent about the full picture of your assets — including land, equipment and off-farm income sources — demonstrates your collateral.
For young growers with limited credit history, it’s important to focus on business planning and proactive communication as part of your financial health.
While your credit score is still important, consistent habits and intentional planning that outline cash-flow projections can demonstrate financial responsibility over time. And when challenges arise, reaching out before a problem snowballs and payments are missed can build trust and keep conversations open as conditions change.
Howe is an area manager with Nutrien Financial and oversees operations across the Corn Belt, western U.S. and Canada. He provides leadership and innovative solutions to help growers increase their buying power and maximize every opportunity for success. Learn more at nutrienfinancial.com.