Transcript SFP Tracking Production Records

Tracking Production
Expenses
A tool for crop selection and market evaluation
The goal is PROFIT !
• P=I–E
• Profit = Income – Expenses
• The big picture is an average of:
•P=I–E
• P=I–E
• P
=I–E
Estimating Income
• Don’t plant until you know your market
• Talk to potential buyers about demand for
new products
• Estimate farmers’ market weekly sales for
each crop or product
• Put it together into a simple marketing
chart
Outlet:
Saturday
Farmers’
Market
Thursday
Farmers’
Market
Bunched
Greens
150 bunch/wk
@ $1.50
X 30 weeks =
4500/$6750
100 bunch/wk
@ $1.50
X 30 weeks =
3000/$4500
?
?
Total
Estimated
Sat FM
Income
Total
Estimated
Thurs FM
Income
CSA
Marin
Organic
Berkeley
Bowl
Total #
bunches/
Total
Estimated $
Bunched
Carrots
Salad mix
Oriental
Eggplant
?
?
?
?
Total
Estimated
Sales
Income $
Estimating Production
Expenses
• Production Operating Costs
– Land preparation
– Planting
– Irrigation
– Fertilization
– Crop Protection
– Support System
– Pruning
– Pest Management
Estimating Production
Expenses
• Production Operating Costs, continued
– Field Cleanup
– Harvest
– Post-harvest: clean, sort, pack
– Packaging and labels
– Equipment Operating Costs
– Interest on Operating Capital
Estimating Production
Expenses
• Cash Overhead (whole farm expenses)
– Property Taxes
– Insurance
– Office Expense
– Land Rent
– Investment Repairs
• Non-Cash Overhead : depreciation
Production Operating Costs
+ Allocated Share of Overhead
(Whole Farm Costs)
= Total Crop Production Expenses
UC Cost of Production
Studies
•
•
•
•
Available for a variety of crops
A variety of regions, production scales
Some for organic production
Diversified crop study coming soon
• Some studies include excel spreadsheets for farmer self-entry
and modification
• Studies chart profitability in relation to price and yield
(Ranging Analysis)
• http://coststudies.ucdavis.edu/current.php
Estimating Marketable Yield
• Ask other growers
• Ask your UC Cooperative Extension Farm
Advisor
• Ask your supplier
• Check county agricultural commissioner’s annual
crop reports
• http://www.cdfa.ca.gov/statistics/ to find average
crop yields, 1998-2007
Estimated Wholesale Break-even
• Break-even yield
– Number of marketable boxes per acre needed to pay
all costs = (total costs per acre)/(expected price per
box)
– Break-even yield varies with price per box
• Break-even price
– Price per box needed to pay all costs = (total cost per
acre)/(expected number of marketable boxes per acre)
– Break-even price varies with yield per acre
After the Estimates
• Revise your marketing chart
• Create a budget for each planned crop based on
your projected income and expenses
– Budget land, inputs, labor
– Include owners’ labor
– University of Florida’s One hundred Foot Row
Budgets:
• http://smallfarms.ifas.ufl.edu/planning_and_management/bud
gets.html
Recording Reality
• Create a crop journal for each crop
– Record all inputs, activities and hours
– Create a system for each worker to record time spent
on each crop
• Some use pocket notebooks in the field
– Record yields, harvest dates, etc.
• Keep a paper trail for every aspect of production,
not just finances
• Check reality (from journal) against crop budget
and estimates
Planning for Profit
• Compare budget to reality for each crop
• Evaluate new crops
• Plan the next year with a little bit more
information