Issue #1
Agricultural
Profitability and Sustainability
Problem,
Opportunity Statement
Long-run sustainability of farm
businesses is dependent upon the farm management team’s ability to plan for the
future and to implement and adjust those plans. Integrated planning should focus
on financial management, marketing, production, business succession, environmental,
community and organizational changes.
As farm sizes change over
time to adjust to market signals, the average number of employees on each farm
is growing. Furthermore, the probability of a given farm worker having a farm
background is decreasing as workers are attracted from other industries.
Coupled with this is the increasing number of employees from different ethnic
or cultural backgrounds. Farm managers report a lack of skills necessary to
manage this diverse human resource.
Producers have an
ever-growing amount of complex information at their disposal. They could better
understand the information that needs to be gathered and analyzed in their
business. This requires a record keeping program as well as methods for
analyzing the information.
Pressure on production
agriculture, in the form of laws, regulations and less formal challenges, is
increasing. Producers looking to make changes may deal with legal/regulatory
issues related to maintaining, growing or changing enterprises. The use of
production and marketing contracts is becoming more prevalent. Furthermore,
enterprise specialization has led to increased use of custom operators.
Producers
face many sources of risk that can impact cash flow, profitability and
long-term profitability and sustainability. Tools such as crop insurance,
forward contracting, futures and options, etc. can help to mitigate risk and
stabilize farm finances.
An increasing number of
farmers are exploring direct marketing to increase profits, leading to long-term
sustainability. The skill set leading to success is often weak or lacking. Many
producers do not understand the skills, the amount of time or other resources
that are needed to effectively direct market products.
·
Business
Planning
·
Marketing
·
Human Resource
Management
·
Information
Management
Program Titles and/or Program Topics by Subject
Matter Area
·
Business
Planning
o
Tilling
the Soil of
o
Farm Service
Agency (FSA) training
o
Risk
management strategies ( production, processing, marketing, human resources)
o
Crop Insurance
o
Choice of business structure
o
Agricultural
law
o
Policy
issues
o
Contract use
·
Marketing
o
Marketing
of differentiated agricultural products
o
MARKETEER
(FINPACK companion software)
·
Human Resource
Management
o
Human
Resource Management
o
Interpersonal
communications
·
Information Management
o
Business
record keeping
o
Cost
of production
o
Production
and financial benchmarks and trend analysis
o
Financial
ratios and their interpretation
o
Capital
investment analysis
o
Benchmarking
o
FINPACK
o
Rich
Stup
o
Jim
Beierlein
o
o
Programs jointly dealing with
family/business issues (PA Farm Link identifies this as
important)*
o
Cornell
Publications
o
More people doing
this*
o
Brad
Hilty
o
Greg
Hanson
o
Jay
Harper
o
Agricultural
Alternatives
o
Jeff
Hyde
o
o
Farm Credit
Associations
o
FINPACK
o
Benchmarks across
commodity/product lines*
o
John
Becker
o
Agricultural
o
Alyssa
Dodd
o
Charlie
Abdalla
o
Ginny
Ishler
o
Bob
Graves
o
Sarah
Roth
o
o
Penn
Ag
o
Extension specialists in
production of vertically integrated commodities (hogs, poultry, vegetable,
fruits)*
o
Neil Hamilton & his book
(
o
o
Ken
Bailey
o
Jay
Harper
o
Jim
Dunn
o
Guy
Metzler
o
Tom
Murphy
o
John
Berry
o
Gene Gantz (RMA employee housed
at PDA)
o
Marketeer (FINPACK
Product)
o
Brokerage house as a
partner*
o
Dairy Coop as a
partner*