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This can help diversify assets for clients<br />
with primarily ag-based real estate<br />
holdings when there is concern about<br />
long-term water or market issues. For<br />
example, a family that has farmed for<br />
multiple generations may have accumulated<br />
a sizeable amount of farmland.<br />
From a financial perspective, it may be<br />
wise to consider diversifying a portion<br />
of those assets into other forms of real<br />
estate.<br />
Growers should also be mindful of<br />
the market dynamics regarding supply<br />
and demand for their crops. If water<br />
constricts supply by reducing the size<br />
of the crop, then in theory, the existing<br />
‘THIS IS ALSO A GOOD TIME TO ASK IF THERE ARE<br />
OPPORTUNITIES TO PRODUCE LESS PRODUCT BUT AT<br />
A HIGHER QUALITY OR CONSIDER ANOTHER VALUE-<br />
ADD THAT WILL HAVE A GREATER FINANCIAL RETURN<br />
IN THE MARKET.’<br />
demand levels should cause prices and<br />
overall returns to go up. This is also a<br />
good time to ask if there are opportunities<br />
to produce less product but at a<br />
higher quality or consider another value-add<br />
that will have a greater financial<br />
return in the market.<br />
Planning for Expense Variances<br />
Fickle water pricing and availability<br />
have led us to examine some best- and<br />
worst-case expense scenarios with our<br />
clients seeking preparedness and opportunities.<br />
We start with a budget or<br />
Continued on Page 40<br />
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<strong>Dec</strong>ember 2021 www.wcngg.com 39
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