Annual Farm Business Summary and Analysis Season Is Right Around The Corner

John Hanchar, Farm Business Management
Northwest New York Dairy, Livestock & Field Crops

December 2, 2013

BackgroundRisk management continues to be a common challenge faced by farm business owners. Recent succession planning workshops were presented within the framework of successfully managing human resources, legal and financial risks. Many upcoming programs can be thought of as designed to increase risk management capacities. Risk management tools and their availability receive emphasis.
RiskRisk is variability in outcomes. Agricultural risks relate to production, price, legal, human resources, and financial aspects of the business. For farm businesses, production, prices (both output and input), and financial outcomes, among others vary. Results are not known with certainty. The ability to meet cash obligations in a timely manner, the ability to generate profits, and other financial outcomes are not known with certainty -- they vary over time.
Sound Financial Planning and Control are Keys to Successfully Managing Risks 
An overall strategy for successfully managing financial risk includes sound financial planning and control. 
Financial planning is using financial information to answer the following questions.
1. Where is the business now?2. Where do you want it to be?3. How will you get the business to where you want it to be?
Financial planning practices include

• generating financial statements (balance sheet, cash flow statement, and income statement)
• using results to identify strengths and weaknesses
• developing projections, including those associated with proposed changes to the farm business.

Financial control involves measuring financial condition and performance over time to determine whether or not the business is achieving desired results, and if not asking “Why not?” to identify and implement needed changes.

As the end of the year draws near, the next few months present good opportunities to examine your business’ financial management practices. As a farm business owner, you have financial objectives and goals, written hopefully, or unwritten. These direct your efforts. Do you measure the financial condition of your farm business using the balance sheet? Do you measure financial performance using the cash flow statement and income statement? If you don’t measure financial management factors, then how do you expect to successfully manage the business toward achieving desired financial results?

The statement “If you can’t, or don’t measure it, then you can’t manage it” with its emphasis on measuring outcomes underlies the value and need for sound financial management, especially as it relates to successfully managing risks.

Business Summary and Analysis Tools

Cornell University Cooperative Extension’s Dairy Farm Business Summary (DFBS) Program

  • The objective of the DFBS Program is to allow producers to analyze their production and financial situation, set future goals, and make sound financial decisions.
  • The DFBS allows producers to compare their business performance to that of other dairy producers.
  • The summary and analysis for each farm includes profitability analysis, balance sheet analysis, analyses of annual cash flows and repayment ability, capital and labor efficiency as well as analyses of the cropping and dairy aspects the business.

The DFBS program is a preferred financial management tool for summary and analysis for dairy farm businesses of all kinds.

Financial Statements for Agriculture (FISA) Program

  • FISA is a computer based spreadsheet program that can be used by all types of farm businesses to achieve an objective similar to the one above for the DFBS Program.
  • In practice, FISA’s ability to provide for peer to peer comparisons is limited.
  • The summary and analysis for each farm includes profitability analysis, balance sheet analysis, analyses of annual cash flows and repayment ability, as well as some capital efficiency measures and analysis. The program does not summarize and analyze production aspects of the business. 

Farm Business Summary and Analysis with the NWNY Dairy, Livestock, and Field Crops Program

If you are interested in improving your farm business’ ability to practice sound financial management, then please contact me to learn more about some of the tools available and their value and, or to discuss plans for completing a farm business summary and analysis for 2013. The NWNY Dairy, Livestock, and Field Crops Program has the capacity, using the above tools, to develop valuable farm business summary and analysis. The NWNY team has the capacity and desire to work with a variety of farm businesses -- dairy (small, medium, and large; conventional; organic; grazing; and others), field crop, livestock, and others.



Dairy

Dairy

Livestock

Livestock

Grazing

Grazing

Forages

Forages

Grains

Grains

Upcoming Events

Announcements

From Our Team to Yours: COVID-19 Resources for Dairy Farmers

The South Central NY Dairy and Field Crops Team has compiled a list of articles that we think may be useful to dairy producers and their service providers as we all navigate the COVID-19 situation. Please stay safe and reach out to our team if you have questions or need help finding information. We are here to help with tools and resources to support all of the normal day-to-day dairy and field crop management considerations, in addition to emerging topics related to COVID-19.

For the full list, click here: COVID-19 Resources for Dairy Farmers


South Central Dairy & Field Crop Team Welcomes Summer Intern, Carolyn Wright

The South Central Dairy and Field Crops team is pleased to welcome summer intern, Carolyn Wright, a Cornell student studying Agricultural Sciences with a focus on education.

Carolyn is working closely with the team's Farm Business Management Specialist, Mary Kate Wheeler, on a project examining the needs around managing the financial, legal, and human risks associated with the succession planning process specifically related to dairy farms. Her main focus is on conducting a needs assessment that encompasses the South Central team's six-county region. The needs assessment involves compiling data from existing sources, interviews with experts and past program participants, focus groups, and surveys that can be examined to provide an accurate picture of producers' needs surrounding specific components of succession planning, barriers they face along the way, and ways extension can more effectively meet those needs. The results of the needs assessment will be used to inform future grant application and program development decisions.

Carolyn is from a small farm in Franklinville, NY where her family milks 50 cows and operates an 8,000-tap maple operation. Wright's farm has been in the family for several generations and has seen many changes. Carolyn has enjoyed growing up and working with her family on the farm. She values how the experiences she has had developed her work ethic, taught her responsibility, but most of all, fueled her passion for agriculture and sharing it with others. 

Prior to attending Cornell, Carolyn earned an Associates Degree in Agricultural Business from Alfred State College. She plans on pursuing a Masters degree in teaching after graduating from Cornell in the spring of 2021, with future career goals of being part of the family farm and pursuing a job in agricultural education whether that be high school, extension, or something similar.


Regional Team Operations During COVID-19

Click here for an operations update.


Dairy Acceleration Program Funds Available

Funds available for the
  • organization of financial records/benchmarking up to $1,000
  • continued business planning (for farms awarded in a previous year) up to $2,500
  • business planning up to $5,000
Guidelines remain the same DAP covers 80% of the cost up to the value of the award and the farm is responsible for 20%.  Visit https://prodairy.cals.cornell.edu/dairy-acceleration/

New Paraquat Certified Applicator Training Available

Paraquat Certified Applicator Training to Prevent Poisonings Now Available | US EPA

https://www.epa.gov/pesticides/paraquat-certified-applicator-training-prevent-poisonings-now-available

www.epa.gov



HEMP GROWER'S EXCHANGE BOARD

CCE Hemp Exchange Board On-Line
Dear Hemp Growers & Processors: Our exchange board has its first postings; plenty of interest in selling and purchasing. You can check it out at http://www.nyhempexchange.org/

 *The NY Hemp Exchange Board is posted for your information and research purposes. Cornell Cooperative Extension does not endorse or recommend any product, service, individual, business or other entity. All "Hemp Exchanges" are posted at the discretion of CCE. "Hemp Exchanges" requests may be denied or removed at any time for any reason Maire Ullrich, MBA Agriculture Program Leader Eastern New York Horticulture Team - Vegetables Cornell University Cooperative Extension Orange County


2018 Drug Residue Prevention Manual

For more than 30 years, the U.S. dairy industry has focused educational efforts on the judicious use of antibiotics through the annual publication of a Best Practices Manual. The 2018 edition of the National Dairy FARM Program: Farmers Assuring Responsible Management? Milk and Dairy Beef Drug Residue Prevention Manual is the primary educational tool for dairy farm managers throughout the country on the judicious and responsible use of antibiotics, including avoidance of drug residues in milk and meat.

The manual is a quick resource to review those antibiotics approved for dairy animals and can also be used as an educational tool and resource for farm managers as they develop on-farm best management practices necessary to avoid milk and meat residues. Visit the Manual and Form Library to download copies of this important tool!

http://www.nationaldairyfarm.com/drug-residue-manual


Follow us on Facebook

The team updates our facebook page frequently - follow us to be updated on our events, see some fun videos and get local area updates!

facebook.com/SCNYDairyandFieldCropsTeam


Dairy Grazing Apprenticeship

Western New York Dairy Farmers Kim Shaklee and Janice Brown make the news with their successful Dairy Grazing Apprenticeship match. Kim and Janice are Master Graizers, and they are working hard with their Apprentice, Travis Belmore and preparing Lauren La Mar for an official Apprenticeship. 

http://www.americanagriculturist.com/dairy/guiding-next-gen-dairy-graziers-win-win

ProDairy Forage Management

Are you prepared to change your routine this spring?

By: Joe Lawrence, Cornell CALS PRO-DAIRY and Ron Kuck, Cornell Cooperative Extension North Country Regional Ag Team


While spring tasks vary by farm, there are many "rites of spring," and they are often completed in a fairly rigid sequence. Depending on the farm, these often include fixing fence, spreading manure, planting new seedings, planting corn and harvesting first cutting, and are often performed in this order.

We are optimistic that the upcoming turn in weather will allow these task to be accomplished in a timely manner, but at this point it is time to ask yourself: Are you willing to change your spring routine?

In addition to adverse weather it is no secret that everyone is facing extremely tight economic times, and dealing with forage inventories of poor digestibility forages from 2017. This combination of factors makes it more critical than ever to be ready to tackle the task that will have the most impact on your business at the proper time.

Recent reference articles on dealing with tough times:
• Key Opportunities to Optimize 2018 Crop Production Efficiency
• Resources for Dealing with Spring Weather Delays
First Cutting
The number one focus should be on timely harvest of first cutting.
• Park the corn planter when a field of first cutting is ready for harvest.
o Monitoring 1st cut harvest timing
• Approach harvest by the acre, not by the field. Be ready to skip over a field that has passed its optimum harvest stage.
o Dynamic Harvest Schedules
• Strategically plan feed storage to best utilize forage inventories for the right group of animals.
o Strategic Forage Storage Planning
o When More is Better
Corn Planting
The window for planting for silage is generally wider than for grain, which is why first cutting can and should take priority over corn planting. However, in the event of extreme delays in planting corn, performance will diminish with late plantings. If corn planting progresses into late May or early June, begin to consider alternative options for those acres. Previous research from Cornell and Penn State suggest a 0.5 to 1 ton/acre per week decline in silage yield for planting after mid to late May.

Multi-Tasking
First and foremost during a time of year that can be very busy and stressful, taking every precaution to keep your team safe is critical.

The idea of fitting all of this work into a condensed time period, and still getting key tasks completed before critical deadlines can seem impossible, but year after year many find unique ways to get it all done. Consider working with neighbors, custom operators or renting equipment to accomplish these key tasks on time.

If you currently utilize custom operators, now is a good time to set up a time to meet with them and make sure you are on the same page to get tasks accomplished in the time-frame needed. Make sure that your expectations and goals are clearly defined. They will also be under stress to fit their work into a condensed period and meet their customers' expectations, so defining expectations and pre-planning how to most efficiently get the work accomplished when the custom operator arrives can go a long way to increase the chances for success.



NYSERDA Agriculture Energy Audit Program

NYSERDA offers energy audits to help eligible farms and on-farm producers identify ways to save energy and money on utility bills. Reports include recommendations for energy efficiency measures.

Eligibility
Eligible farms include but are not limited to dairies, orchards, greenhouses, vegetables, vineyards, grain dryers, and poultry/egg. The farms must also be customers of New York State investor-owned utilities and contribute to the System Benefits Charge (SBC). Please check your farm’s current utility bills to see if your farm pays the SBC.

Energy Audit Options
You can request the level of energy audit that best fits your farm’s needs. NYSERDA will assign a Flexible Technical Assistance Program Consultant to visit your farm and perform an energy audit at no cost to you.

For more information and the NYSERDA Agriculture Energy Audit Program Application click here


NEWSLETTER   |   CURRENT PROJECTS   |   IMPACT IN NY   |   SPONSORSHIP  |  RESOURCES   |   SITE MAP