Today's chaotic economic landscape reminds me of Mike Tyson’s memorable observation, “Everyone has a plan until they get punched in the face.” Regardless of your place in the economic cycle, preparing a financial house to weather the punches is critical among trade disputes, tariff shifts, breaking headlines, unpredictable weather, currency fluctuations, and more.

In the current environment, grain is struggling while livestock, especially beef and diversified farms, are financially strong. Securing success in this split economy requires essential financial disciplines. 

Disciplined Cash Flow
Cash flow planning is one of the most important litmus tests for mastering finances as cash flow projections are 80 percent of any solid business plan. Plan for production, costs, interest rate changes, debt service, family living withdrawals, income taxes, and capital expenditures. Develop a monthly or quarterly cash flow even if revenue streams are only annual. 

Support cash flow projections with an operational plan scheduling activities for production, marketing, purchasing, and debt management throughout the year. 

But What Ifs
Naysayers may argue that what is on paper does not work in reality. Decades ago, one of my favorite Cornell professors, George Conneman, taught us to develop assumptions of possible outcomes called “but what ifs,” commonly known as financial sensitivity testing. The best, worst, and average cases can be outlined using trend analysis for financial forecasting. 

Our goal in developing financial sensitivity tests is to be within 5 percent of estimated parameters at each end of the spectrum, noting that growth or abrupt changes widen the outcomes. The key is not achieving perfection or getting to home base, but the moves you make along the way. 
 
Financial sensitivity in the cash flow analysis allows you to call an audible, or a change in play, like famous quarterback Peyton Manning did as he would survey the field and yell out “Omaha.”

Omaha
For a grain operation’s marketing and risk management plan, a win may be to break even or minimize losses. However, for a livestock operation, and beef cattle especially in today’s red-hot market, a win may be a profit plan that utilizes profits for efficiency, builds reserves for financial liquidity, and avoids excessive debt. 

Cash flow discipline should extend beyond the business into a personal and family budget. The complexity of multiple generations living off the business or the use of off-farm income must be incorporated into the household management equation.

Financial Liquidity 
Another part of the financial one-two punch is disciplined financial liquidity. In prosperous economic cycles and a chaotic world, building working capital is a requirement. 

Determine what constitutes true working capital, the time it takes to convert inventory or receivables into cash flow, and account for prepaid expenses and cash conversion timing. Offset current assets with current liabilities over three, six, and 12-month periods. Marketing and risk management plans must be grounded in financial liquidity and discipline to execute and monitor objectively, not emotionally.

Comprehensive Protection Plans
These plans should include inventory or crops growing in the field, crop insurance protection levels, and marketing opportunities along with a tax management plan. Avoid spending a dollar to save 20 cents on taxes, only to be saddled with debt service for the next five years that drains your working capital. 

Reality on Paper
Refinancing operating debt may be necessary for some operations to replenish working capital for 2026 expenses. The key is meshing your cash flow statement with financial liquidity. When generating losses, which is natural for agricultural businesses during some parts of the cycle, determine the time it will take to burn through these refinanced reserves. Apply similar calculations when cash supports other business or personal needs. 

In this equity-rich, cash-flow-stressed era, determine how many months or years you can survive. Financial liquidity is not just about having money but knowing exactly how long that money will last. 

Navigating Challenges & Opportunities
Whether managing a household or a business, building a foundation requires financial discipline to execute and monitor effectively. This financial one-two punch with cash flow discipline and financial liquidity positions you to navigate challenges and opportunities with balance when it’s time to call your own “Omaha” in business and life.