Business Planning and Farm & Financial Management

Extension eDale Johnson, right, helps farmers to increase profitabilityducation in Farm Management is conducted by Dale Johnson, Farm Management Specialist. Dale holds a B.S. in Agribusiness Management from Utah State University and an M.S. in Agricultural Economics from Cornell. He has been with University of Maryland  Extension since 1985.
The objective of Farm Management Extension programs is to help Maryland farmers improve their business management skills to improve management productivity, increase profitability, and fulfill their long-term goals. It is accomplished through workshops, seminars, and individual on-farm consultations involving farm business management, strategic and tactical planning, recordkeeping, financial analysis, and computer applications for farm managers, educators, lenders, and others. Workshops and seminars are prepared and conducted at the request of, and in teamwork with Extension Educators, Specialists, and others. The program involves adaptive research on business planning techniques, crop and livestock enterprise analysis, farm machinery economics, crop insurance, computer use in agriculture, economics of alternative agricultural enterprises, and economics of sustainable agriculture methods. The program is also carried to the College Park campus through the AREC 306 Farm Management course. Individual programs are described below.

OUTREACH AND EXTENSION PROGRAMS

Business Planning for Maryland Agribusinesses -This program provides managers of commercial farms, small farms, greenhouses, and nurseries with education and assistance in developing effective business plans for their businesses. A business plan is a detailed, written document that will help them manage their operations in the short-term and long-term. It is an organized collection of all the important ideas that include mission statements, annual goal statements, resource inventories, marketing plans, production plans, financial plans, and business structure plans. Hardcopy and electronic materials on business planning are available to Maryland farm managers.

Dairy Farm Management Program - This program provides specific financial and business planning tools to Maryland dairy farm managers. Workshops are tailored specifically for dairy farm managers. Additional analytical tools have been developed to help dairy farm managers manage their operations. The Maryland Dairy Farm Business Summary is a major component of this program. In this summary, dairy farmers are taught how to use their IRS Schedule F tax forms to analyze the financial condition of their farms. The information on their tax schedules is converted to a per cwt (hundred weight) basis so that they are able to see the specific strengths and weaknesses of their businesses. They are also able to compare their businesses with other dairy farms in Maryland and in the northeast to identify their strengths and weaknesses.

Financial Management and Business Planning for Farm Service Agency Borrowers - This program trains farm managers who receive financial assistance from the USDA Farm Service Agency. Farm managers who receive FSA financial assistance are required to take this course. The course is 25 hours spread over 5 days. Farm managers learn how to prepare and analyze balance sheets, accrual adjusted income statements, cash flow budgets, and business plans for their operations. They are then required to complete these documents for their own farms and to pass tests to receive certification that they have completed the course.

PRO-FARM Financial Management and Computer Recordkeeping Program - This program helps farm managers improve their record keeping and financial management skills so they can enhance the profitability, liquidity, and solvency of their farm businesses. A secondary objective of the program is that farm managers will improve their computer skills and incorporate computer technology into the management of their farm operations.These objectives are accomplished by conducting two types of workshops. The first type of workshop is 2-4 hours in length andinvolves stepping the participants through the financial recordkeeping and analysis process through the use of fact sheets. They learn to develop monthly record keeping systems, balance sheets, income statements, and cash flow budgets. The second type of workshop is 6-9 hours in length spread over 2-3 days. Farm managers learn the "Six Easy Steps to Farm Financial Management," which include: balance sheet, projected cash flow, weekly record keeping, projected vs. actual cash flow comparison, inventory adjusted income statement, and enterprise analysis." Farm managers are taught how to do these steps on a computer using the "Quicken" and"Quickbooks" recordkeeping programs and the Excel spreadsheet.

Enterprise Budgeting for Maryland Farms - This method involves (1) identifying alternative crop, animal, and recreational enterprises for Maryland farm managers, (2) estimating output levels, output prices, input requirements, input prices, and profits from alternative enterprises, and (3) estimating labor, management, and financial requirements for different enterprises.This program resulted in Maryland farm managers having objective methods for evaluating alternative enterprises that they are considering.

Maryland Agriculture Web Page - A web page at www.marylandagriculture.info is the definitive internet source for linking individuals interested in Maryland agriculture. Consumers will find listings of local farmers' markets on this site as well as links to other interesting agricultural sites. Farmers can link to agricultural associations and organizations, financial institutions, suppliers and equipment dealers, educational and governmental sites, and publications and software that might be useful. Both consumers and farmers will find many sources of on-line, technical information.

International Extension Development - Theobjective of this program is to improve the knowledge and ability of people in agriculture of Central Asia to work and function in a market economy. To accomplish this, Extension systems are being developed which will provide the organizational frameworks for educational institutions to be more responsive to the demands of a market economy and provide up-to-date methods and technologies that have practical application to agriculture. In addition, the improvement of information networks and the delivery of information through distance education is a goal to enable people working in rural areas to have better access to all types of information on markets and production. This program currently includes two projects in Uzbekistan and Kazakhstan.

ADDITIONAL LINKS:

Agricultural &Resource Economics (AREC)

Marylandagriculture.info

Section: 
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