You Can’t Improve What You Don’t Analyze

As livestock producers you are constantly reminded of the importance of collecting all kinds of measurements: weaning weight, sale weight, pasture height, days on pasture, pounds per acre….the list goes on and on. All of this data is important, but if you don’t put it into dollars and cents to measure the cost of doing business, then the chance of your farm making a profit is at risk. I accept that of all the measurements collected, financial data are the least fun to keep. However, after a couple years of keeping financial records and most importantly turning those records into information, I've found the pain begins to diminish while the value of this information to your farm grows. The number one reason for keeping records is to conduct a financial analysis. It helps you identify strengths and weaknesses of your farm. Known as benchmarking, initially you will compare your values to other farms, but after you have several years of your own records, you will benchmark against own operation. There's an App For That One of the tools you can use is a piece of software called FINPACK©. Many states that have trained educators and/or technicians who will help you complete a financial analysis using this software. Let’s take a look at what it can show us, using an example from the University of Minnesota's Center for Farm Financial Management's (CFFM) FINBIN© Farm Financial Database. We used farm information from the database, looking at the least profitable 20%

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