The essentials of management on modern farms and ranches has grown with the need to track income and expense details to determine a profit in a business with very tight margins. Just as each farm or ranch operation is very different, so goes the financial picture and the need for tracking of the operation’s cashflow. A producer’s ability to track expenses, to determine break-evens for pricing commodities, leads into marketing strategies that can be shared with lenders and others invested in the operation. With a record keeping system in place, we can manage toward a profit by knowing our costs and making decisions within the farm or ranch as to what expenses we may need to reduce. Basically, we need to know income and expense at least for quarterly reports throughout the year not waiting until the end just for tax purposes. This will lead to better management decisions during the year and a much more accurate pre-tax meeting with your accountant.

With established record keeping throughout the year, producers can recruit the help of marketing specialists, agronomists, nutritionists, and a host of other agriculture professionals to help with management decisions. Provide these experts the proper information to implement their tools to help you in the very trying and stressful business climate of todays markets in agriculture. If we can build a few years of trends, the needs for your farm or ranch will become apparent and we can establish long term goals unique to each operation.

The South Dakota Center for Farm and Ranch Management’s key feature is to help producers develop good records with the goal of maintaining a financially-sound business. The ability to track income and expense plus capital purchases is the focal point of completing an analysis of the whole farm. Most farms operate on a cash basis which is commonly used to file income taxes; however, those numbers do not reflect the true profitability of the farm. A clearer picture of a farms actual performance emerges after making the appropriate inventory changes on an accrual basis.

Students enrolled with the South Dakota Center of Farm and Ranch Management are happy with the support and information they receive to develop a sound record keeping system. They are farmers and ranchers from across South Dakota and is certainly not just for college aged folks. The program is set up over 3 years and will compile records to establish trends in operations that can be continued on a consulting basis after completing the program. If this is something that interests you in your operation, please give us a call.

For more information please contact me at either 1-605-995-7193 or Blaine.Carey@mitchelltech.edu if you would like more information about the SD Center Farm/Ranch Management.