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The Management Calendar

Authors as Published

Gordon Groover (xgrover@vt.edu), Extension Economist, Farm Management, Department of Agricultural and Applied Economics, Virginia Tech

A few thoughts on management and planning:  The position I have requires planning for the expected, for example, this newsletter, and the unexpected, a visit from my department head asking me to chair a committee.  Regardless of our job or position we have to plan to meet the expected and the unexpected. The last statement, planning for the unexpected, sounds, well silly.  How can you plan for the unexpected?  How do you plan for a 20% drop in prices or rapidly escalating feed prices driven by the demand for bio-fuels?  To answer, I’ll quote Dwight D. Eisenhower, who said, "The plan is useless; it's the planning that's important."  So even though you spend months working up a superb business plan that lays out in detail how the business will succeeded, “it may be useless” when the uncertainty of normal life occurs.  Often the focus of getting the plan finished distracts us from the most important task when creating a plan; that is, knowledge and understanding how the business may respond to changes driven by unforeseen events. The key is the mental exercise you get from planning and developing what-if strategies. Working out hypothetical responses to problems (a 20% drop in net income) and opportunities (a long term lease is available for the 300 acres farm next door) will give you the mental and fiscal agility to make sound decisions.  The time spent planning is an investment in planning for the unexpected and the long-term survival of your business.  Listed below are useful resources from agricultural and small business planning:  

  • BeginningFarm.org provides links to a number of useful sites at: http://beginningfarmers.org/farm-business-planning/. • Extension is constantly adding new resources so visit their site at http://www.extension.org/ and search on “business planning.”
  • Visit the Ag Risk Library at the Center for Farm Financial Management under the header “Strategic and Business Planning”  http://www.agrisk.umn.edu/Library/Topics.aspx?LIB=AR
  • Our own Alex White has a number of resources for small business planning at http://www.extension.agecon.vt.edu/smallbusiness.html

Listed below are the items that need to be included on the farm business managers' calendar for spring of 2010:

  • Half the business year will soon be behind us and a six-month financial record check-up is in order. Updating your records through the month of June allows you to quickly gauge financial progress by comparing the farm's actual expenses and income to your budgeted amounts.  If you did not develop a budget, compare your mid-year expenses and income to half the items reported on your 2010 Schedule F.  Flag any items that are different from budgeted amounts. These differences are not necessarily problems, just items that need to be examined and explained. 
  • Watch your line-of-credit and be sure to keep in touch with your lender. They all know that we are in a time of uncertain returns.  Yet, it’s just good business practice to keep them informed of major changes and that you are managing the situation. 
  • Production records for livestock and crops should be updated for the first half of the year. Look for big changes from last year, and make sure to cross-reference these with production expenses.
  • Even with the time constraints of summer activities, try to plan and hold regular staff meetings with family members and employees to discuss work plans and set priorities for the next day/week. Consider brainstorming about alternative ways to deal with problems.  Use some of the time to help discuss positive outcomes of previous plans, and recognize individuals for being creative and doing a good job. 
  • Checking your credit rating in July should become an annual event.  Independence Day should remind you that you should be independent from identity theft and credit mistakes. All individuals and business owners should annually check their credit rating.  Additional information on your rights to access your credit report and links to the site for obtaining a free copy of your credit report can be found at the Federal Trade Commission’s (FTC) web site at http://www.ftc.gov/freereports. The FTC cautions consumers to make sure they use the correct site because there are “Imposter” sites.

Selective information available that might be useful for summer reading:

  • Interested in the annual per acre rental rates are for cropland and pastureland for the 2009 crop year?  Then take a look at VCE publication “2009 NASS Cropland and Pastureland Rental Rates” at http://pubs.ext.vt.edu/3004/3004-1444/3004-1444.pdf.
  • A recent USDA Economic Research Service study reported that half of farm expenditures are spent locally and the entire report can be found at http://www.ers.usda.gov/AmberWaves/June10/Findings/FarmExpenditures.htm. It is worth reading and forward to local officials about the economic impact of agricultural on localities. 
  • America's Organic Farmers Face Issues and Opportunities is the title of a recent USDA Economic Research Service study about the status of organic agriculture in the U.S. with comparison to conventional systems and the “locally grown” label.   http://www.ers.usda.gov/AmberWaves/June10/Features/AmericasOrganicFarmers.htm
  • Need a one-stop location for information about Virginia and all the other states?  Then visit http://www.ers.usdagov/StateFacts/. The USDA State Fact Sheet site provides information on population, per-capita income, earnings per job, poverty rates, employment, unemployment, farm characteristics, farm financial characteristics, top agricultural commodities, top export commodities, and the top counties in agricultural sales.
  • USDA released maps detailing the U.S. local meat processing facilities.  Interested in viewing these maps of small livestock and poultry producers and where they are concentrated?  See this link at: http://www.fsis.usda.gov/PDF/KYF_maps-050410_FOR_RELEASE.pdf.
  • Orchardists and nursery tree growers that suffered from a natural disaster on or after January 1, 2008 and before October 1, 2011, can avail themselves of the Tree Assistance Program. For more information on the new TAP program, please contact your county FSA office or the website at http://www.fsa.usda.gov.

Rights


Virginia Cooperative Extension materials are available for public use, re-print, or citation without further permission, provided the use includes credit to the author and to Virginia Cooperative Extension, Virginia Tech, and Virginia State University.

Publisher

Issued in furtherance of Cooperative Extension work, Virginia Polytechnic Institute and State University, Virginia State University, and the U.S. Department of Agriculture cooperating. Alan L. Grant, Dean, College of Agriculture and Life Sciences; Edwin J. Jones, Director, Virginia Cooperative Extension, Virginia Tech, Blacksburg; Jewel E. Hairston, Administrator, 1890 Extension Program, Virginia State, Petersburg.

Date

June 8, 2010