- Farm Business Management: business planning, financial management
Problem and Justification:
To achieve profitability despite tight margins, increasing competition, and rising costs, farmers need to make sound business decisions based on accurate knowledge of their farm businesses. Financial literacy and good financial record-keeping can support those decisions, but many farmers report that even once they create good record-keeping systems and habits, they are not sure how to use that information to improve decision-making. Existing agricultural benchmarking projects often do not apply to the diversified, small-scale operations typical of the Northeast, limiting farmers’ ability to understand how their operation compares to other similar farms, or to assess potential areas for growth and improvement. Researchers and service providers in Pennsylvania and New York have started building datasets to create benchmarks that will be relevant to Massachusetts’ farms, and this project will help expand those datasets to include Massachusetts farms. These benchmarks will help farmers understand their financial information better and help individual farms identify areas of strength and areas in need of improvement.
Solution and Approach:
This project will combine benchmarking data collection with technical assistance and peer-to-peer learning on financial literacy, record-keeping and analysis, and business decision-making. Target producers are beef, pork, lamb, and goat operations and diverse vegetable producers in Massachusetts. Data collected through in-depth support for 40 farms will contribute to two existing datasets, the Pennsylvania Sustainable Agriculture Association (PASA)’s Diversified Vegetable Financial Benchmark Study, and Cornell Cooperative Extension’s Cornell Meat Price and Yield Calculator. In addition, we will assess and synthesize existing benchmarking studies and convene benchmarking researchers for two video conferences. We will use the information gained through these methods to inform workshops on financial record-keeping and decision-making for additional farmers. Together, these methods will help farmers gain the skills and information they need to implement data-driven farm decision-making and improve farm financial sustainability.
Milestones and Performance Target:
Forty livestock and vegetable farmers will participate in benchmarking cohorts. One hundred additional farmers will participate in workshops on financial record-keeping and decision-making, using lessons learned from the work with benchmarking cohorts and our benchmarking research review. From these two groups (benchmarking cohort participants and workshop participants), 90 farmers (unduplicated) will increase understanding of financial record-keeping and decision-making. Fifty farmers will report that improved record-keeping and analysis helped them make better decisions, and thirty-five will report that their participation had a positive impact on farm financial sustainability.
Performance targets from proposal:
Seventy-five farmers will improve financial record-keeping by tracking key indicators. Fifty farmers will report that improved record-keeping and analysis helped them make better decisions, and thirty-five will report that their participation had a positive impact on farm financial sustainability.