Increasing Farm Profitability Through Whole Farm Record-Keeping and Analysis

Final report for EDS18-06

Project Type: Education Only
Funds awarded in 2018: $43,000.00
Projected End Date: 03/31/2020
Grant Recipient: Southern Sustainable Agriculture Working Group
Region: Southern
State: Arkansas
Principal Investigator:
Elizabeth Young
Southern SAWG
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Project Information

Abstract:

The purpose of this project is to provide at least 190 more small-and mid-scale diversified producers with tools and management training that will help them improve their record-keeping systems and business analysis skills so they can make better, more data-informed business decisions that improve their profitability.

We will deliver training to farmers and farm service providers through an 11-hour Growing Farm Profits course at the 2019 Southern SAWG Conference. Producers will be educated on how to track expenses, make better business decisions based on records, appropriately price products, and calculate profitability. During the course we will also equip ag professionals with knowledge, techniques and tools that will make them better equipped to conduct their own trainings or to incorporate new techniques and tools into their on-going outreach and assistance.

By the end of the project, we expect that 90 percent of the producer participants will begin to implement a record-keeping and cost analysis system, or improve their existing record-keeping systems, leading to better decisions that increase farm profits.

This project was developed as a direct response to farmers who have asked for more information on record-keeping, business analysis, and profitability, and farm service providers who requested this training. It builds on past Growing Farm Profit courses, but introduces three important improvements: management tools for livestock producers as well as horticultural crop producers; the combined training of farmers with service providers supported by an online learning group; and facilitation of one-on-one assistance for 13 producers for a year after the course.

Project Objectives:
  1. At least 40 producers will gain the knowledge and tools to track and analyze the economic impacts of their production and marketing decisions so that they can improve future decision-making toward increasing overall farm profits.
  2. At least 90 percent of producer participants will begin to implement a record-keeping and cost analysis system, or improve their existing record-keeping and analysis, leading to better decisions that increase overall farm profits.
  3. At least 30 agricultural professionals who assist commercial producers will improve their functional understanding of tools that producers can use to track farm financial data, analyze the data, and make business decisions that lead to increased farm profitability.
  4. At least 25 of these agricultural professionals will incorporate more effective record-keeping and business decision-making tools into their farmer assistance programs by the end of this project.
  5. Another 150 producers will receive assistance from agricultural professionals or producers who participate in this project on systems for tracking and analyzing the economic impacts of their production and marketing decisions so that they can improve future decision-making toward increasing overall farm profits.

Cooperators

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Education

Educational approach:

Through this project, at least 190 producers will receive tools and management training that will help them improve their record-keeping systems and business analysis skills so they can make better, more data-informed business decisions that improve their profitability. At least 40 producers will receive direct training through an 11-hour Growing Farm Profits course and further coaching through participation in a learning group for one year afterward. Thirteen of these producers will also receive one-on-one assistance from a local farm service provider. Another 150 producers will receive assistance from farm service providers or farmers who have participated in the Growing Farm Profits course.

At the heart of the project, we will deliver training to farmers and farm service providers through an 11-hour Growing Farm Profits course at the 2019 Southern SAWG conference. Using the Veggie Compass and Livestock Compass Whole Farm Management systems as teaching tools, instructors Ellen Polishuk, Jim Munsch and John Hendrickson will teach participants how to calculate the value of their products, and how to analyze and maximize their markets with informed decisions about pricing. They will teach participants how to identify and collect farm data that is important to their business decision-making, and how to calculate profitability by crop or market. Participants will learn ways to use farmer-friendly templates and mobile devices for recordkeeping and analysis that fits with busy schedules and regular on-farm activities. Instructors will provide real farm data and real-life decision points throughout the course so participants see how other farms dramatically increased profits. They will demonstrate actions participants can take to improve profits, such as a focus on labor management.

Growing Farm Profits curriculum topics include:
• Setting Goals
• Managing for Profitability
• Calculating Profitability
• Discovering True Cost of Production
• Pricing Products
• Evaluating Market Channels
• Assessing and Controlling Labor Costs
• Investing in Infrastructure & Equipment
• Making Critical Decisions
• Keeping Records that Matter
• Useful Tools

After covering the topics that are applicable to all producers, course participants will be divided into those who want to focus on horticultural enterprise tools and those who want to focus on livestock enterprise tools. There will be time in each group for participatory exercises that will enhance learning. By the end of the course, each producer participant will set some realistic goals for the upcoming year regarding record-keeping and business analysis. For instance, goals may include analyzing the profitability of a particular crop or a particular market.

At the end of the course, participants will receive a thumb drive with recordkeeping templates and additional resources for continued education. They will also receive instruction on how to use course materials that are available for free on the Southern SAWG website.

Southern SAWG will provide scholarships to 13 farmer support organizations (one from each state in the region) to enable them to send a service provider and a farmer to the training course to work as a pair. Each scholarship will include a registration fee waiver for the Growing Farm Profits course and reimbursement for a portion of travel expenses to the course. In return, scholarship recipients must agree to stay engaged in the project for the full year and participate in the activities described in this proposal. We will provide a $200 stipend for each of the 13 farmers if they stay engaged and complete their evaluation questionnaire at the end of the project.

A scholarship application will be developed by Muntz in consultation with the project team, and the scholarship opportunity will be advertised widely through all of Southern SAWG’s 2019 promotional channels. Southern SAWG staff will also notify organizations that have expressed interest in participating in our next Growing Farm Profits course about the opportunity. Two months before the conference, the project team will review applications and choose the scholarship recipients.

The “pairs” who receive scholarships will work together on improving the farmer’s knowledge and skills during the course and on their goal-setting. Then each service provider will provide assistance to their “paired” farmer for a year afterward on achieving their goals. This might consist of help in setting up the specific system for gathering records on their farm or help in analyzing the data at the end of the season or something else determined by the producer.

Although another 40-50 course participants will not be part of a training pair, they will all benefit from having farmers and service providers in the course together. Agricultural professionals will hear the priorities and concerns of farmer participants. Producers will benefit from added expertise in the room and a chance to form relationships with professionals interested in assisting them. Also at times, we will pair up producers and assistance providers who aren’t scholarship recipients for exercises.

All course participants will be offered an opportunity to participate in one of two online learning groups – horticultural or livestock – for a year after the course. This will be required of the 13 farmer-service provider pairs, and be optional for all others. Using an online service (such as Huddle) designed for team communication and collaboration, participants will be encouraged to share experiences and post questions to the learning group. Ellen Polishuk will monitor the horticultural group, while Jim Munsch will monitor the livestock group. They will provide information as needed and guide the conversation toward continued, shared education. Hendrickson, Muntz, and other project team members will also check in on the groups periodically, and act as resources for Munsch and Polishuk when needed.

Near the end of the year of shared learning, members of the project team (Muntz, Polishuk, Munsch, and Hendrickson,) will provide a coaching session by phone with the 13 farmer-service provider pairs. They will help each pair look at the data gathered and determine the value of their information. They will assist them in using the management tools to consider the implications of the data to the overall profitability of the farm operation. Then they will discuss the process for using that information to inform decisions for the next year. They will also coach the farmers on what data they might want to gather in the future and ways that might be used.

We recognize that because most farmers are extremely busy and focused on production and marketing, they are less motivated to spend time on tracking metrics and sharpening their business management skills. This project is designed to help them overcome that reluctance by having experienced sustainable farmers lead the training, by demonstrating the practical benefits of using financial management tools and techniques, by introducing participants to farmer-friendly tools, by providing an online learning group to encourage communication and coaching among peers, and for the 13 scholarship farmers, having a farm service provider assist them for at least one year.

We also recognize that most farmers face a steep learning curve before they get truly proficient at the record-keeping and financial analysis side of their businesses. We expect to speed up the learning curve somewhat by providing the online learning group, and by having a farm service provider assist the 13 scholarship farmers for at least one year.

At the end of the year-long educational activities, producer participants will have received a framework for understanding costs and profitability on diversified small- and mid-size farms, and specific tools for recordkeeping and analysis. They will have seen the process in action through real examples, and be given the opportunity to use the management tools on their own and discuss their successes and challenges with peers in a shared learning environment. Also thirteen of the producers will have received additional assistance in implementing their own systems. By the end of the project, we expect most of these producers will begin to implement a record-keeping and cost analysis system, or improve their existing record-keeping system, leading to better decisions that increase farm profits. We also expect that some of these producers will share the tools with other producers and pass on tips that are useful peer to peer.

Through the Growing Farm Profits course, the online training materials, and participation in the online learning group; the agricultural professional participants will learn about tools that producers can use to track farm financial data, analyze the data, and make business decisions that lead to increased farm profitability. They will also see the challenges that come up in the learning process and examples of how to move producers along in their learning curve. The service providers will be better equipped to conduct their own trainings or to incorporate new educational techniques and tools into their on-going outreach and assistance to producers. We expect at least 25 of these agricultural professionals will incorporate more effective recordkeeping and business decision-making tools into their farmer assistance programs, and they will assist at least 150 more producers during the life of this project.

Educational & Outreach Activities

2 Consultations
2 Webinars / talks / presentations
1 Workshop field days
2 Other educational activities: Two online learning groups provided; one for horticulture producers/service providers and one for livestock producers/service providers.

Participation Summary:

72 Farmers participated
45 Ag professionals participated
Education/outreach description:

Our target audience for the educational activities of this project included both producers and farm service providers. Our primary audience was farmers and ranchers in the Southern Region who manage small- and mid-size diversified farms, and are interested in becoming more sustainable.

Many of these farmers produce a large number of high-value, sustainably-produced crops with intensive methods. They market through multiple channels, such as farmers markets, CSAs, restaurants and local grocers, or through food hubs, cooperatives or wholesalers. They often have extensive experience at sustainable production methods, but less experience at maximizing their markets, and very little training in accurately tracking expenses or analyzing for profitability in a way that gives them an accurate picture of how to manage financial risk. Many belong to historically underserved groups – minorities, women, limited resource farmers, and beginning farmers.

Our secondary audience was farm service providers who provide education and assistance to the farmers described above. This includes staff of farm organizations such as the Southeastern African-American Farmers Organic Network or Grass Roots Farmers Cooperative, agencies such as Cooperative Extension or NRCS, and private farm consultants.

For the Growing Farm Profits course, we conducted outreach to the targeted farmers and farm service providers in several ways. We promoted the course and scholarship opportunities through several Southern SAWG conference promotional channels, including a printed brochure mailed to 9,000 addresses, press releases and advertising in targeted media, email blasts to over 87,000 people, and Facebook and other social media posts. We posted complete information about the course on the Southern SAWG website. Southern SAWG staff also contacted all organizations that had expressed interest in participating in the course, and notified them of the course and scholarship application process. 77 people attended the course, including 60 who self-identified as farmers and 32 who identified as farm service providers (Extension, University or NGO staff).

Since the livestock compass is a new tool, Southern SAWG hosted a webinar that introduced the livestock compass system in the fall of 2018, a few months before the Growing Farm Profits course. Instructors Munsch and Hendrickson, who developed this tool and are both farmers, led the webinar. This served to educate participants about this new whole farm management tool, and promoted the upcoming Growing Farm Profits course. We promoted the webinar to our target audience through a notice on the Southern SAWG website, email blasts, and Facebook and other social media posts. 64 people registered for the webinar and 24 participated. 

Throughout the project we promoted the availability of free extensive educational resources for the Growing Farm Profits course on the Southern SAWG website at http://www.ssawg.org/growing-farm-profits/ These include:

  • Veggie Compass Whole Farm Management template and example
  • Introduction to the Livestock Compass tool
  • Eight tutorial videos on using the Veggie Compass tool
  • Samples and templates of various other recordkeeping spreadsheets including Ag Decision Maker
  • PowerPoint presentations from past Growing Farm Profits courses
  • Other useful resources referenced in past Growing Farm Profits courses
  • Five webinars on aspects of financial management designed for farm service providers who assist farmers in our target audience

We also introduced these resources to participants in the Growing Farm Profits course.

At the end of this project, Southern SAWG hosted a webinar on the lessons learned, including success stories of some of the farmers who improved their profitability by tracking and analyzing the economic impacts of their production and marketing decisions. We showed the extensive Growing Farm Profits resources available on the Southern SAWG website. We promoted the webinar to our target audience of farmers and farm service providers through a notice on the Southern SAWG website, email blasts, and Facebook and other social media posts. Because this webinar was delayed into the growing season in the midst of the pandemic, we had 8 participants.

At the end of the project, we added the two webinars to the free Growing Farm Profits resources on the Southern SAWG website, and promoted the resources and lessons learned through the Southern SAWG e-newsletter and social media.

Immediately after the Growing Farm Profits course and each webinar, we surveyed participants about the usefulness of training information and materials. This included questions about our outreach, farmer participation, and the expected reach of the information learned. We also captured information about farmer participation in the educational activities and other farmers reached during the project at the end of the learning group.

Learning Outcomes

44 Farmers reported changes in knowledge, attitudes, skills and/or awareness as a result of their participation
Key changes:
  • Identifying farm data that horticultural and/or livestock producers need to track in order to make well-informed business decisions

  • Identifying farmer-friendly tools and other resources needed to help horticultural and/or livestock producers track and analyze data on their farms

  • Analyzing farm data that horticultural and/or livestock producers need to track in order to make well-informed business decisions

  • Making business decisions based on key drivers of profitability

  • Managing labor for profitability

  • Considering profitability and business management whenever making any production or marketing decisions

Project Outcomes

44 Farmers changed or adopted a practice
10 New working collaborations
Project outcomes:

This project introduced concepts of whole farm profitability planning to over 70 farmers and 45 farm service providers, and provided training, tools and resources to assist them.  A majority of farmers who participated, reported immediately afterward an increase in their ability to keep better records and manage for profitability, allowing them to make better production, marketing and business decisions based on the drivers of profitability on their farms. After 12 years of training hundreds of farmers and farm service providers, we’ve found that even more impactful changes will come after several years.  In the first year after participating, most farmers gain a new awareness of how profit is generated on the farm and whether it is generated, and an increased curiosity about what crops and enterprises are profitable for them.  Participating farmers begin using the principles learned in the course to make better business decisions based on records and analysis, and gain more confidence about taking charge of their business decisions based on more than production issues.  Then they tend to build on this new expertise and confidence by using the concepts and tools more extensively in coming years – all leading to more profitability and sustainability on their farms. 

Southern SAWG is closing as an organization in 2020, but we have made plans for all Growing Farm Profits videos and resources to be available for free.  They will be available until December 2020 on the SSAWG website at www.ssawg.org/growing-farm-profits

All of the videos are now available on YouTube at http://www.youtube.com/southernsawg

All Compass tools are available though the U-W Center for Integrated Agricultural Systems (CIAS) at: compasstoolbox.com

CIAS will also add all the Growing Farm Profits videos and resources to the compasstoolbox.com site in 2020.

 

Recommendations:

Since earlier trainings in the Growing Farm Profits program had focused on either farmers or farm service providers, we planned to use this project to bring them together, giving the service providers experience in using compass tools to assist farmers while in a shared learning setting. Although there was some limited success, there were obstacles that should be addressed in any future projects.  First, more time should be spent on training the service providers before pairing them up with a farmer.  Many didn’t reach a level of comfort and commitment to the techniques and tools before working with farmers on their own.  Second, the timing of the training – at the end of January – was not optimal.  It didn’t give farmers and service providers enough time to work together before the growing season consumed farmers’ lives.  Ideally, training should take place in fall at the end of the growing season or even start earlier for the service providers, and then one-on-one interactions could take place throughout the winter.  Third, the listserv we used was not conducive for learning group communication.  An experienced  IT person should have been part of the project team to make sure a better platform was utilized.  And other forms of communication should be explored, since many farmers still have limited internet access.  Finally, all tools, training and resources need to be adapted to the needs of limited resources farmers.  Constant evaluation and refinements need to be made in development and implement of project activities with limited resource farmers as part of the project leadership.

 

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.