Making Decisions Based on Your Records

Bill BurtonArea Agricultural Economics Specialist

Family Business ProductionBills Paid Bills Paid Crops and Soils

Employment, Earnings

Income, Receipts Livestock

Accounts Accounts Machinery & Equipment

Credit Credit Computers, Office

Insurance Farm Insurance Buildings

Inventory & Assets

Business Management

Other Inventory

Important Papers

Where Do You Keep Your Records?

Wallet File cabinet Safe deposit boxDriver’s license Lots of stuff… List of records in the home

fileCredit/debit cards List of insurance policies

Card with medical info- Certificates: birth, death, etc.

Health insurance Contracts, notes, deeds, etc.

Memberships Copy of bank account info-, list of financial advisors

Mini-version of living will Copy of will

Organ donor card Stock certificates, bonds, etc.

Personal ID Household inventory & photos

Using records

• Historical analysis• Current assessment• Forward planning

• Financial performance• Financial position

• Whole farm• Enterprise

Questions that records can answer

• Am I making more on crops or livestock?• Should I buy or raise hay?• Are my costs of production too high?• What is my break-even calf price?• What can I do if I want to be more profitable?• What can I do to provide incentives for hired

help to do a better job?• What kind of risk management strategies

should I be using?

What do good records offer?• Cold, hard facts • Ability to compare to benchmarks• Insights into strengths/weaknesses,

problem identification• Identification of profit and loss centers• Direction for maximizing the returns to

owned resources• Documentation to obtain/maintain credit

Can You Answer Correctly?

• What is your calving percent?• How many calves died?• How much cost do you have in a bale of

hay?• How much does it take to run a cow for

one year?• Can I afford to buy that new pickup?

Can You Answer Correctly?

• Is it cheaper to bale my own hay, or buy it?• Which of my cows need to be culled?• How much fertilizer can I afford to put on my

pastures?

FinancialRecords

Cash records:tax reports,

financial statements, Quicken

AccrualAdjustments

ProductionRecords

Standardized Performance Analyses

Cow-calf

SPA

Production Performance

85.5 82.1

3.50

102030405060708090

100

Calving % Weaning % Death Loss %

Perc

ent

NM-TX-OK, 1991-2002

Production Performance522

429

300

350

400

450

500

550

Avg. Weaning Weight Lb. Weaned/Exp. Female

Poun

ds

NM-TX-OK, 1991-2002

Weaning Percent

85 83 81 80

0102030405060708090

100

Top 25% 2nd 25% 3rd 25% Low 25%

Perc

ent

Income Quartile

NM-TX-OK, 1991-2002

Pounds Weaned Per Exposed Cow

455 432 427 402

0

100

200

300

400

500

Top 25% 2nd 25% 3rd 25% Low 25%

Poun

ds

Income Quartile

NM-TX-OK, 1991-2002

Capital Investment Per Cow(Market Value)

3,8873,398 3,328

5,061

0

1,000

2,000

3,000

4,000

5,000

6,000

Top 25% 2nd 25% 3rd 25% Low 25%

Dolla

rs

Income Quartile

NM-TX-OK, 1991-2002

Cost of Production ($/Cow)

264323

383

568

0

100

200

300

400

500

600

Top 25% 2nd 25% 3rd 25% Low 25%

Dolla

rs

Income Quartile

NM-TX-OK, 1991-2002

Production Cost

6075

129

78

74

170

86

78

219

106

113

349

0

100

200

300

400

500

600

Top 25% 2nd 25% 3rd 25% Low 25%

Other CostGrazing Cost Per CowFeed Cost Per Cow

Dolla

rs

Income QuartileNM-TX-OK, 1991-2002

Return on Assets (%), Market Value

6.72.4

-1.2

-7.5

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

Top 25% 2nd 25% 3rd 25% Low 25%

Perc

ent

Income Quartile

NM-TX-OK, 1991-2002

Production Cost

131

118

265

111

91

147

92

105

195

7168

252

6775

238

6270

219

5272

187

0

100

200

300

400

500

600

1-49 50-99 100-199

200-299

300-499

500-999

1000+

Feed Cost Per Cow Grazing Cost Per Cow Other Cost

Dolla

rs

Number of HeadNM-TX-OK, 1991-2002

Net Income ($/Cow)

-192

6

-45 -33-13

16 29

-29

-200-175-150-125-100

-75-50-25

02550

1-49 50-99 100-199

200-299

300-499

500-599

1000+ Avg.

Dolla

rs

Number of HeadNM-TX-OK, 1991-2002