Acquiring Benchmarking Skills for Beginning and Progressing Farmers and Ranchers
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This project addressed the financial and production risks of beginning and progressing farmers and ranchers in south central Utah. Through workshops and monthly one-on-one instructions, participants 1) identified the cost and profit centers of their businesses, 2) used QuickBooks classes to assign financial transactions to their identified cost and profit centers, and 3) identified useful benchmarks within their cost and profit centers for comparison to industry enterprise benchmarks:
- Management accounting practices,
- Knowledge and risk management skills,
- Ripple effects mapping,
- Development of a strategic operating plan, and
- Increased ability to manage risk.
The emphasis was on:
- Implementing management accounting practices by identifying cost and profit centers.
- Developing improved management knowledge and risk management skills by focusing on Management Accounting.
- Utilizing management accounting principles to evaluate costs of production and analyze businesses through comparison to industry benchmarks.
- Coupling analysis to development of a strategic operating plan that increases the producer’s ability to manage risk.
Following the Project
All of the participating farmers improved their record keeping skills, many showing significant improvement, noted by their financial lenders. The 24 participants who completed the full FINAN analysis reduced much of their financial and production risk as well as improved their management abilities, (21 of the 24 were included in the 2015 Utah College’s Farm/Ranch Management Annual Report.).
Mind Mapping Example
The opportunity to do “Ripple Effect Mapping” as a measure of the many and varied outcomes that rippled out from the project, brought forward impacts otherwise unrecognized by the project delivery team and the participants alike. For example: One participant who had the most “ripples” also is the most open to talking about the change in his family, particularly his father in-law’s paradigm change and the change in his farm/ranching operation. Additional areas of risk addressed by the farm included: 1) Production Risk, beginning a grass-fed, direct-marketing beef enterprise. The producer’s wife has a marketing degree and feels more a part of the business, using her talents and abilities. 2) Marketing Risk, the producer focused on marketing replacement heifers rather than weaned calves, and custom grazing rather than harvesting and selling forages. 3) Human Risk, the family relationships have improved through increased family time, resulting from grazing and not spending as much time feeding hay. In addition, they have seen success with winter grazing, bringing his father in-law to support grazing rather than feeding for those four or five months.
Participants identify their cost
(farm business enterprises).
Participants gained skills to
and revenues to the
Participants developed potential
cost/profit center benchmark
variances and provide
guidance in managing
financial and production risk.