Building Farm Equity

By: Jodi Henke

Building net worth in your farm business happens by retaining earnings in the business, contributing equity from off-farm income, or by inflation from the value of the farm assets. The retained earnings will generate additional income in future years for retirement or to help the next generation run the farm business.

Kelvin Leibold is an Extension farm and ag business management specialist with Iowa State University. He says how you allocate net farm income has a direct effect on increasing equity.