A main goal of the M.A.I.N. group is learn from peers in farming operations with similar challenges. One of the ways we are trying to learn from each other is by comparing or benchmarking the operations in the group. But, at each group meeting we have discussed what is the best method for benchmarking. How do we account for labor and management? How do we break out equipment costs, etc.? Are we asking the right questions? We have taken as much time to discuss whether or not we are making the correct comparisons as we have discussing the comparisons themselves. These are good discussions and these questions are common throughout family businesses, not just agriculture.
Wednesday, January 25, 2012
Next M.A.I.N. Meeting in Nashville
The next M.A.I.N. Meeting is scheduled for Saturday, March 3, 2012 at the Hampton Inn & Suites near Opryland. The Hampton Inn is located on Rudy Circle. Other Hotels are close as well. Please get your rooms booked because the hotels are filling fast. The Commodity Classic appears to be at capacity.
230 Rudy Cir, Nashville, TN
Tuesday, November 1, 2011
How does your profitability compare?
I was reading through the Annual Summary for Grain Farms in 2010 from the Kentucky Farm Business Management Program. There is a set of comparisons with the lower 1/3 (LOW 1/3) and the high 1/3 (HI 1/3) in farm returns and return to management.
Farms in the LOW 1/3 tended to spend about $50/A more on all inputs. These broke out to about $20/A more for fertilizer, pesticides and seed, about $14/A more in power and equipment, about $9/A more in labor (biggest portion being unpaid labor) and about $7/A more from insurance and miscellaneous costs.
Farms in the LOW 1/3 also had lower gross farm returns (about $76/A less). Gross farm returns includes livestock, crops, tobacco, custom work, etc. Farms in the LOW 1/3 received about $64/A less in crop returns. Both yields and actual sale price of commodities contribute to this difference.
The M.A.I.N. group has looked mostly at production costs and that allows us to compare efficiencies. However, the group is missing another very large area, which is farm returns. We are reporting yields, but not actual prices for commodities. It would be very interesting to compare the numbers on farm costs (broken out for Crop Costs, Power & Equip., Building, Labor, Other) and look solely at costs per acre. But, I think it would be more useful to the group to compare actual prices received for commodities. That allows us to compare marketing skills. If someone really shines in this area, the rest can learn from it.
Farms in the LOW 1/3 tended to spend about $50/A more on all inputs. These broke out to about $20/A more for fertilizer, pesticides and seed, about $14/A more in power and equipment, about $9/A more in labor (biggest portion being unpaid labor) and about $7/A more from insurance and miscellaneous costs.
Farms in the LOW 1/3 also had lower gross farm returns (about $76/A less). Gross farm returns includes livestock, crops, tobacco, custom work, etc. Farms in the LOW 1/3 received about $64/A less in crop returns. Both yields and actual sale price of commodities contribute to this difference.
The M.A.I.N. group has looked mostly at production costs and that allows us to compare efficiencies. However, the group is missing another very large area, which is farm returns. We are reporting yields, but not actual prices for commodities. It would be very interesting to compare the numbers on farm costs (broken out for Crop Costs, Power & Equip., Building, Labor, Other) and look solely at costs per acre. But, I think it would be more useful to the group to compare actual prices received for commodities. That allows us to compare marketing skills. If someone really shines in this area, the rest can learn from it.
Monday, October 31, 2011
Harvest Progressing
How is your harvest progressing? Respond to this blog post so we all can see what's going on.
The USDA Crop Progress Report is due out at 4:00 pm today (October 31, 2011). I'm curious to see how your personal operations compare with the USDA Report.
The USDA Crop Progress Report is due out at 4:00 pm today (October 31, 2011). I'm curious to see how your personal operations compare with the USDA Report.
Peer Advisory Groups, Some Differences
In the last post, I highlighted some of the common themes among successful groups. Now, I want to address some of the differences. The point of this is to emphasize that each group must develop their own identity and their own guidelines for operation.
Peer Advisory Groups, Common Themes
Earlier this summer, I attended a meeting on Peer Advisory Groups hosted by Danny Klinefelter at Texas A&M. Several types of Peer Advisory Groups were introduced and discussed that the meeting. All of these groups had different compositions and structures. The successful groups had some things in common. They are listed here in no specific order:
1. Time and Money: Members must contribute money and time; members have to pay a price in money and must attend the meetings in person. In addition, rotating responsibilities across the group was a good thing (for example, each meeting one person takes the notes, one person keep track of time and one person makes sure everyone is contributing, perhaps another person is in charge of food, etc.).
1. Time and Money: Members must contribute money and time; members have to pay a price in money and must attend the meetings in person. In addition, rotating responsibilities across the group was a good thing (for example, each meeting one person takes the notes, one person keep track of time and one person makes sure everyone is contributing, perhaps another person is in charge of food, etc.).
Commodity Classic, 2012
The 2012 Commodity Classic is in Nashville, Tennessee during March 1 - 3.
Producers from commodity groups representing corn, soybean, wheat and sorghum will be in attendance. Topics will range from production to finance to policy. The trade show will be large again.
More details about the Commodity Classic are here:
Producers from commodity groups representing corn, soybean, wheat and sorghum will be in attendance. Topics will range from production to finance to policy. The trade show will be large again.
More details about the Commodity Classic are here:
Subscribe to:
Posts (Atom)