2010 National Farm Management Conference

Breakout Sessions


A Farmer Business Model to use Biomass to produce Biochar and Renewble Energy

Breakout Sessions

Don Hofstrand, dhof@iastate.edu
Agricultural Marketing Resource Center
http://www.AgMRC.org

Biochar (the production of charcoal from the pyrolysis of biomass) holds great promise as a method of improving soil productivity, increasing nutrient efficiency, reducing environmental runoff and sequestering carbon.

The presentation will outline the framework for a farmer-owned business that will collect the biomass from member farmers, process the biomass in a farmer owned facility, distribute the biochar to member farmers and utilizing the renewable energy in a variety of ways. Potential benefits to member farmers are higher yields, less fertilizer, renewble energy income, renewable ammonia and carbon offset income.


Materials
Farmer Business Model to use Biomass to produce Biochar and Renewble Energy
 

A TEAM APPROACH TO TEACHING FARM LEASES

Breakout Sessions

Mary Sobba, sobbam@missouri.edu
University of Missouri Extension

With the current land prices, leasing farm land continues to be a common practice in farming. Recently, the shift has been from crop-share arrangements to cash leases. The number of requests for information has been an indicator of the need for educational training. A team of five agriculture business specialists worked together to take a traditional topic, update it and create an interesting and educational program. The end product was developing a program covering many aspects of leasing including current trends, how to legally terminate a farm lease, specific items to include in a lease, recreational leasing and important specifics in both crop and livestock share leases. This program was designed to be delivered by a team, using a combination of presentations, discussions on-site and written materials. The program was designed to be offered through a distance learning interactive tv network.

This program has been taught the past two years and the participation rate was much higher than anticipated. The participants have been both land owners and tenants, both seeking to increase their knowledge about leases. The age group has varied from young farmers just starting out to folks well past retirement age. An evaluation tool was used to gather feedback at the conclusion of the program. The feedback has been used to modify the current program. Curriculum, feedback and lessons learned will be shared in this session.


Materials
A Team Approach to Teaching Farm Leases
 

AgPlan: Online Business Planning Website

Breakout Sessions

Kevin Klair, kklair@umn.edu
Center for Farm Financial Management, U of Minnesota
http://www.cffm.umn.edu

AgPlan is powerful new online tool designed to help agricultural and other small businesses develop a business plan. AgPlan is free of charge for anyone to use individually or in educational programs. AgPlan lets you select a format from four different types of rural businesses: Ag – Commodity, Ag – Value-Added, Small Business, or Commercial Fishing. Each business type has an outline designed specifically for that particular type of business, tips or questions that help you develop each section of the plan, sample business plans, and links to additional resources for each section of the plan. AgPlan is designed to help business owner’s work with an educator or consultant while developing a business plan. A producer can give access to their business plan to the reviewers of their choice and AgPlan will facilitate interaction with them.


Materials
AgPlan presentation
 

Annie´s Project Funding through RMA Small Sessions Grants

Breakout Sessions

Tim Eggers, teggers@iastate.edu
Iowa State University Extension

Co-Presenters
Bob Wells, Iowa State University Extension Mary Sobba, University of Missouri Extension

Are you tired of asking for small amounts of money from local and regional sponsors for your risk management education programs? United States Department Risk Management Agency (RMA) Small Sessions grants are available at the $10.000 level. In this session you will learn specific steps of how to write a Small Sessions proposal for Annie’s Project. Tim Eggers and Bob Wells, Iowa State University Extension Field Agricultural Economists, and Mary Sobba, University of Missouri Extension Agriculture Business Specialist will explain how they have addressed the RMA Small Sessions Request for Applications as an opportunity to fund Annie’s Project.

The North Central Risk Management Education Center started supporting Annie’s Project with a challenge grant in 2003. Eggers, Sobba, and Wells have worked together on the Annie’s Project since the spring of 2004. They have each secured and managed RMA small sessions grants to deliver Annie’s Project for their clientele. Their goal in sharing the information is to minimize the barrier a lack of funding presents for Annie’s Project facilitators.

This session will cover RFA evaluation, proposal writing, documentation of procedures, and progress reporting. It will be made just after the mid year progress report has been submitted by two of the presenters.


Materials
RMA Small Sessions Grant Access
 

Assisting Producers with the Average Crop Revenue Election (ACRE) Decision

Breakout Sessions

Chris Bruynis, bruynis.1@osu.edu
Ohio State University Extension
http://wyandot.osu.edu

Unlike previous legislation, the 2008 Farm Bill contained provisions that allowed producers to choose the risk management option for their farm. Producers could choose between the traditional Direct and Counter-cyclical Program (DCP) or the Average Crop Revenue Election (ACRE) program. Both programs are complex, difficult for producers to fully comprehend, and required producers to make price and yield predictions for future years.

The strategy to assist producers in making the ACRE decision was a combination of curriculum development, teaching, and consultation. If producers were going to make an educated decision on which program was best for their operations, they needed to fully understand both the DCP and ACRE program components. Programs were conducted, reaching more than 1500 producer and industry leaders, which clearly explained the mechanics of both programs. Program participants were asked to make assumptions about prices and yields for the upcoming year. The anticipated farm program payments for each provision were then estimated for a range of price and yield scenarios relevant to the area were included, allowing participants to grasp how the Farm Bill decision might affect their farm.

Additionally, information on the ACRE decision was published regularly explaining expected program payment levels as yield and price data became known for the 2009 crops. Information on the 2009 ACRE decision outcome assists producers in making the 2010 ACRE decision. Farmers also scheduled consultations with OSU Extension Educators to discuss which Farm Bill program choice is best for their farm.


Materials
Assisting Producers with the Average Crop Revenue Election (ACRE) Decision
 

Beginning Farmer Program

Breakout Sessions

rick costin, rcostin@uky.edu
Univ. of KY

Ky FarmStart is a new, three year, extension initiative funded under the USDA´s Beginning Farmer and Rancher Development program. The program is a comprehensive whole farm management program designed for individuals with less than ten years of farm experience. The KyFARMSTART program is a two year commitment for the producer. During the first year, producers will participate in 10 to 12 face to face educational meetings which may include classroom style meetings, on -farm demonstrations, field days, and field trips. In the producers´ second year, they will be teamed up with a mentor with similar enterprise interests. The project will also have an on- line curriculum for producers who do not have the program in their county or who prefer the flexibility of the on-line alternative.
Potential topics include: Farm Management, Marketing, Enterprise Evaluation, Financial Management, Nutrient Management, Evaluation of Natural Resources, Legal Risk, Government Resources, Business Plans, Production, Farmstead Management, and Leadership Development. County Extension Agents are responsible for developing their curriculum to fit the participants needs. The program is getting a large amount of attention. Over thirty counties have either started the program or have made plans to begin this Spring.


Materials
Presentation of Beginning Farmer Program
 

Characteristics of High Profit Farms

Breakout Sessions

Kent Olson, kdolson@umn.edu
University of Minnesota

Co-Presenters
Victor Gauto, Rob Holcomb, Gary Hachfeld, Jim Kurtz, and David Bau (all University of Minnesota)

A long history of farm management literature seeks to explain differences in farm performance. Most of these studies have tried to explain financial success by using financial and physical data. However, farmers usually use nonfinancial factors to explain success anecdotally. Also, using nonfinancial factors avoids endogeneity problems associated with using financial variables to explain financial variables. The objective of this study is to explain farm success on the basis of nonfinancial variables. These variables include data on formal education, farmers´ attitudes towards management, their situation, and other potential reasons mentioned by farmers. The farmer-members of the Southwestern Minnesota Farm Business Management Association were surveyed about these variables. Financial performance and physical and financial information was available in the database gathered each year. The farmers were ranked on the basis of net farm income per operator (NFIperOp) and on the basis of rate of return to assets (ROA) and divided into the top 25% and the remaining 75% groups for each measure. When only financial variables (such as gross cash income, total assets, crop acres, debt/asset percent, land tenure) were used as explanatory variables for the ROA equation, the adjusted R2 was only 0.03. When nonfinancial variables were included, the adjusted R2 increased to 0.69. And when only the non-financial variables were included the adjusted R2 was at least 0.70. The adjusted R2 was affected similarly in the NFIperOp equations. The correlation between NFIperOp and ROA was only 0.098, and the two equations had different significant explanatory variables.

Materials
Characteristics of High Profit Farms
 

Direct Fuel Use in Soybean & Corn Production

Breakout Sessions

Paul Gorman, drpaulgorman@yahoo.com
South Central College
http://www.southcentral.edu

Dr. Paul Gorman conducted a project for the Minnesota Soybean Growers Association to investigage and upgdate direct fuel use in soybean production. The MSGA was concerned that greenhouse gas and carbon footprint assumptions used by various groups was erroneous and/or based upon outdated information. Dr. Gorman conducted a study of ten cash grain farmers in southcentral Minnesota to determine their direct fuel use in soybean production. The study approached both fuel disappearance and fuel usage by operation. In order to determine direct soybean fuel usage; it was also necessary to determine direct fuel use in corn production. The study included the predominant tillage methods and included direct field operaton support fuel through delivery to the 1st storage destination after the combine.

Materials
Not Available
 

ECONOMIC COMPARISON OF U.S. DAIRY SYSTEMS

Breakout Sessions

Tom Kriegl, tskriegl@wisc.edu
Center for Dairy Profitability - UW Extension
http://cdp.wisc.edu/

There is a perception that Wisconsin dairy systems are high cost producers and that they (especially the small ones) lack economies of scale especially relative to western dairy farms.

Multiple years of farm data from several other parts of the U.S. has been compared with dairy data from the University of Wisconsin Center for Dairy Profitability. Only one measure of financial performance is shown here, net farm income from operations per dollar of revenue (NFIFO/ $ revenue). The higher the NFIFO/ $ revenue, the lower the cost of production/ $ revenue.

Insights include:
1. Most of the actual farm financial data from dairy production indicates that the economies of scale (lowest cost of production per unit) occur at a much smaller size than people expect (possibly less than 100 cows per farm).
2. There are large consistent differences in NFIFO/$ revenue between many states and systems.
3. Graziers typically attain more NFIFO/$ revenue than other dairy systems in their states.
4. Small dairy systems typically attain more NFIFO/$ revenue than large dairy systems in the same state.
5. The larger farms tend to generate more dollars of total NFIFO per farm and per owner compared to the smaller farms.
6. No single system is most competitive in all circumstances.

The up-to-date conclusions of this project can be accessed at http://cdp.wisc.edu.


Materials
Economic Comparison of U. S. Dairy Systems
 

EHedger´s AMMO: A New Approach To Ag Risk Management

Breakout Sessions

Gavin Maguire, gjm@ehedger.com
EHedger
http://www.ehedger.com

EHedger´s AMMO Program combines our top-tier risk management expertise with the tools producers need to give their marketing plans a boost. By aligning our strategies with our hedge & position tracking platform, producers have the power to build for long term success.
AMMO gives growers the power to automatically track average crop sales prices, unsold crop values and hedge positions from one easy to use platform.


Materials
Not Available
 

Expanding Farm Management Education in Ohio

Breakout Sessions

David Marrison, marrison.2@osu.edu
Ohio State University Extenson
http://ashtabula.osu.edu

Co-Presenters
Chris Bruynis PhD, OSU Extension

During the past decade, the number of state and regional farm management Extension specialists in Ohio has declined drastically until in 2008 there were none left. The farm management education void created by the loss of regional and state specialists has been embraced by the Ohio Ag Manager Team which is composed primarily of county based Extension Educators. There have been multiple strategies that have been adopted by the team to meet clientele education demand. One strategy was to develop an Electronic Newsletter where current farm management information written by team members is available to subscribers. This newsletter has been published for five years and the team is in the process of adding blogs and social media capabilities to enhance the newsletter. A second strategy was for each team member to select a farm management specialization. Each team member provides leadership to curriculum development, research, and publishing information in their area of specialization. Examples of specialization include transition planning, farm policy/farm bill, estate planning, grain marketing, Annie’s project and farm labor. Team members also teach at a variety of OSU Extension and industry meetings presenting on topics in their area of specialization. As a result of this approach, these county based educators are becoming recognized by their peer and industry leaders not only in Ohio, but across the country. This model of delivering farm management education can be replicated in other state Extension organizations facing reduced state and regional specialists.


Materials
ExpandingOhioFarmManagementEducation
 

FARM Assistance, Strategic Financial Planning Services for Texas Producers

Breakout Sessions

Steven Klose, sklose@tamu.edu
Texas AgriLife Extension Service
http://farmassistance.tamu.edu

The FARM Assistance program of Texas AgriLife Extension Service has served the farmers and ranchers of Texas for 12 years with individualized strategic planning analysis. More than 1500 analysis have been conducted providing each individual with a long-range (10 year) financial outlook for their operation and the capacity to conduct scenario analysis of multiple strategic management alternatives. With a staff of 12, the FARM Assistance program offers services across the state of Texas for traditional and non-traditional crop and livestock producers. The conference presentation includes a brief description of the program and services, as well as covering program challenges and success. In addition, client evaluation efforts and results are discussed along with potential opportunities for program partnership with the FARM Assistance team.

Materials
KlosePresentation
 

Farm Stress: Recognition, Consequences, and Resources

Breakout Sessions

Chris Bruynis, bruynis.1@osu.edu
Ohio State University Extension
http://wyandot.osu.edu

Co-Presenters
Wm. Bruce Clevenger, Ohio State University Extension Dee Jepsen, Ph.D, Ohio State University, Dept of Food, Ag, Bio Engineering

The owners and workers of farm businesses experience a unique and high level of uncertainty in terms of weather, finances, business structure, legalities, and social changes. These careers also include physical demands, irregular work schedules, and seasonal labor pressures. Stress often occurs at low but measurable chronic levels within the business. Stress can peak during crisis situations such as financial downturns that have impact on individuals, families, and business operations.

Ohio research identifies two schools of thought regarding farm family stress. One holds that farmers are less stressed than other workers because of the idyllic pastoral setting in which they work. A second cites numerous stressors that are unique to the farm environment (e.g., adverse economic conditions and unpredictable weather) and claims that farming is a stressful occupation. The Ohio Farm Family Health and Hazard Surveillance Project (OFFHHS), a survey of 4,860 cash grain farms in Ohio, provides an opportunity to make this comparison, and to study the correlates of stress and depression among farmers.

Learning objectives of the presentation are to increase awareness of stress and the impact on mental health of farm families, to provide available mental health resources for farm and horticulture businesses, to provide strategies to reduce stress among farm families, and to use case studies and/or session activities to demonstrate ways to recognize farm and business stress.


Materials
Farm Stress: Recognition, Consequences, and Resources
 

Farm Succession and Estate Planning with Personal Coaching for Participating Families

Breakout Sessions

Brian Tuck, Brian.Tuck@oregonstate.edu
Oregonstate University

Co-Presenters
None

Succession planning is a challenging but necessary process for most farm families. To increase farm clientele’s skills in this area, county faculty from Oregon State University (OSU) and Washington State University (WSU) Extension conducted a farm succession planning educational program in eastern Washington and Oregon. The program was funded by the Western Center for Risk Management Education and USDA-CSREES. From 2006 to 2008, OSU and WSU Extension faculty held a series of three farm succession planning workshops at each of six locations across the region. Participation in these workshops greatly exceeded expectations with 40 to 60 participants at each workshop. Workshop topics included reasons to develop a farm succession plan; communicating successfully with all family members involved; identifying appropriate professional input; an overview of relevant state laws; discussion on estate laws and writing wills; conducting successful family meetings; overcoming difficulties encountered in the process; making good use of attorneys’ time; specifying inheritance of treasured personal items; protecting the business in the event of a sudden death; and getting motivated to develop a farm succession plan. The 90 families who committed to developing a succession plan received free coaching throughout the project. All coaches had experience in business and/or finance and were hired and trained by WSU. They contacted client families on a regular basis to encourage them through the succession planning process, to assist with goal-setting and to facilitate family meetings. At the completion of this program over 10 farm families completed farm succession plans with many others in progress.



Materials
Farm Succesion and Estate Planning with Personal Coaching for Participating Families
 

Farm Transition and Estate Planning Programming: Participant Evaluation, Behavioral Change, Cummulative Impacts and Outcomes.

Breakout Sessions

Gary Hachfeld, hachf002@umn.edu
University of Minnesota Extension

Co-Presenters
None

Increased land values, an aging farm owner/operator population, larger farm operations, and ever changing tax laws have created a challenge for farm families when trying to transition their business to the next generation. As a result, farm families and the ag professionals that work with them, have sought out University of Minnesota Extension for assistance in garnering information related to this issue. Consequently, Extension educators in Minnesota have developed a comprehensive farm transition and estate planning program curriculum that helps farm families address this transition issue. The program has been offered to farm families over the past four years. During that time, Extension educators have completed a rigorous evaluation process. This presentation will explore the format for such an evaluation process and outline some of the cumulative findings from the program evaluation process.

Data will include participant self-reported behavioral change over the course of the four year program period. Data will also include cumulative impacts and outcomes based upon evaluative data from participants stating their progress toward development of and implementation of a farm business transition and associated personal estate plan. Information presented will also outline participant self-reported value of the program and curriculum workbook plus disclose some of the challenges and obstacles farm families encountered as they began the transition and estate planning process.


Materials
Farm Transition & Estate Planning: Participant Evaluation, Behavioral Change & Cumulative Outcomes & Impacts
 

Financial Characteristics of Top Producers

Breakout Sessions

Ron Dvergsten, ron.dvergsten@northlandcollege.edu
MNSCU FBM
http://www.mgt.org

Co-Presenters
Al Brudelie MNSCU Farm Business Management

Al Brudelie I has put together and used a Power Point discussing the Characteristics of top producers . This presentation goes into detail about what makes our top producers different than the average farm. Most of the time is spent discussing the sweet 21 as it applies to their farm operation. These key indicators will be discussed in detail.

Materials
top producers.pptx
 

Heart of the Farm - Green Fields (Financial Management 101)

Breakout Sessions

nate Splett, jmvander@wisc.edu
University of Wisconsin-River Falls
http://uwrf.edu

Co-Presenters
Jenny Vanderlin Center for Dairy Profitability

The UW Cooperative Extension and the Center for Dairy Profitability (CDP) have offered Heart of the Farm – Women in Agriculture (HOF), and Annie’s Project workshops to introduce farm women to farm risk management since 2002. Evaluations indicated farm women wanted more in-depth skill development in financial risk management. In response, the Heart of the Farm – Green Fields workshop concentrates on the ´structure´ of financial statements and links them to ´analysis´ by applying select FFSC financial measures. The novel concept of *Green Fields* places the workshop in the context of financial ´stewardship´ of farm businesses resources, and introduces the emerging sustainability concepts into financial management. This program mentors farm women in their goal to make informed risk management decisions in a sustainable farm business environment. In this session you will experience the hands-on curriculum that incorporates financial statement information and sustainability concepts. We will share how the marketing and delivery methods helped transform the workshop design/delivery for more effective learning.

Materials
Heart of the Farm - Green Fields (Financial Management 101)
 

Helping New and Small Farmers Meet the Needs of the Northeast Ohio Local Foods Movement

Breakout Sessions

David Marrison, marrison.2@osu.edu
Ohio State University Extension
http://ashtabula.osu.edu

In northeast Ohio and across our nation, consumers are becoming more aware of the benefits of buying local and fresh food products. As the demand for local food products increases, so does the interest in growing and producing a variety of locally grown products for consumers. Throughout the past five years, Extension Educators in northeast Ohio have received numerous requests for consultations from small land owners on how they can raise agricultural commodities to capitalize on the local foods movement. To help new and existing farmers find ways to diversify their agricultural production, the OSU Extension offices in Northeast Ohio collaborated to develop the Northeast Ohio New & Small Farm College. This presentation will describe the Educators’ efforts in developing this program. The team designed curriculum and taught six small farmer colleges to help farm families increase their profits from their small acreage. Course topics included business planning, enterprise selection, marketing and agricultural resources. Two-hundred-six individuals owning 5,736 acres participated in the colleges and 265 participated in two targeted one-day production schools. Only 26% of the attendees in the colleges reported they currently direct market agricultural products. Of the respondents who do not currently direct market products, 80% indicated they planned to in the future. Sixty-three percent indicated they had a plan in mind for their farm business. Forty-three percent had not previously enrolled in an OSU Extension program and 100% indicated they would enroll in future Extension programs.

Materials
NEOhioSmallFarmerEducation
 

How to Assess the Direct, Indirect, and Induced Economic Effects of Agriculture in your County

Breakout Sessions

Lance Brower, lance.brower@ndsu.edu
NDSU-Extension

It is quite easy to assess the direct effect of agriculture in your county, but how about the indirect and induced effects? How are other business sectors affected (i.e., housing, construction, restraints, banks, etc.)? This information includes dollars as well as jobs. This tool can also assess the effects of a drought or the price differentials in agriculture. It is also an interesting way to see how non-agriculture business sectors affect agriculture. This fun presentation will introduce a peer reviewed tool to get that information. This information can be used to educate others on the importance of agriculture in your county. The presenter will do an actual run of the software.

Materials
Input/Output explanation
Brocure Example
 

How to make a successful Risk Management Education Grant application

Breakout Sessions

Dave Goeller, dgoeller@unl.edu
University of Nebraska NCRMEC
http://www.ncrme.org

Co-Presenters
Dave Goeller & Doug Jose North Central Risk Management Education Center University of Nebraska

How to make a Successful Risk Management Education Grant Application

At a time when most educational budgets are stretched to the breaking point we find the need for risk management education has never been more important for producers. Agricultural producers of all types have seen rapid fluctuations in both the market prices they receive for their commodities as well as the costs they pay for the inputs needed for production. Farmers and ranchers also continue to experience problems from weather risks, financial risks, legal and human risks as well. Many have said the rules for managing the risks of today’s farm and ranch have changed. The current economic climate has dramatically increased risk and volatility. Tools and risk management strategies from the past may not be adequate to mitigate the risks associated with today’s rapidly changing environment.
This section will address how the North Central Risk Management Education Center provides funding for delivery and development of educational materials to help producers better manage their increased risks. Emphasizing verifiable producer results, we will discuss how to make an application as well as address the evaluation criteria and the process used by our advisory counsel to select successful grant applicants. In addition we will briefly preview the Ag Risk Library highlighting successful past and current projects from the North Central Region and throughout the nation.


Materials
How to Make a Successful RME Grant Application
How to Make a Successful RME Grant Application
 

Impact Reporting-Stepping Up to the Challenge

Breakout Sessions

Bob Wells, wellsjb@iastate.edu
Iowa State University Extension
http://www.extension.iastate.edu/annie

Co-Presenters
Madeline Schultz, Iowa State University Extension Value Added Agriculture Timothy Eggers, Iowa State University Extension Lani McKinney, Iowa State Univestiy Extension Value Added Agriculture Kelvin Liebold, Iowa State University Extension

Few times in our role as extension educators does an idea find its way to national prominence. Yet, Annie’s Project has grown to serve agricultural women in 21 states. The reasons are clear; educational methodology helps educators meet critical participant needs; instills in participants a desire for personal growth, addresses relevant local agricultural production and provides applied risk management tools. Annie’s Project participants become empowered to make management decisions increasing the farm businesses success. As Annie’s Project educators, we see these impacts first hand. However, the Annie’s National Network Initiative for Educational Success (ANNIES) must step up to meet the challenge of quantifying program impacts to improve the program and attract funding; both essential components of meeting future client demands. Evaluating a local program offered just a few times is much different than evaluating a national on-going program. In this session, we share how ANNIES is improving our impact reporting. Since establishing ANNIES in 2008, we reevaluated old data sets in new ways and developed a logic model to guide us and continue using stakeholder meetings to ensure new programs meet local needs. ANNIES worked with NIFA/CSREES to compile data from across the country. We also established a relationship with the ISU Research Institute for Educational Studies seeking third party confirmation and new impact reporting skills. This presentation will explain these methods, share the results and include a facilitated audience-participatory discussion on program evaluation and impact reporting.

Materials
Impact Reporting-Stepping Up to the Challenge
Impact Reporting-ANNIES Demographic Information
 

Improving On-Farm Accounting Records through an Innovative Approach to Teaching Accounting

Breakout Sessions

Bradley Hilty, bhilty@psu.edu
Pennsylvania State University
http://www.das.psu.edu/dairy-alliance/im/information-management

The importance of sound financial records in managing a business is common knowledge among educators and consultants. Results of a recent research project at Penn State University indicate that accounting records of profitable dairies are significantly better than those of unprofitable dairies. Additionally, owners of profitable farms spend more time managing their business than owners of unprofitable farms. Considerable efforts have been devoted to teaching farmers how to keep better records, including programs on the use of popular accounting software. Despite these efforts, numerous mistakes are still made, because individuals responsible for maintaining accounting records lack an understanding of proper accounting principles and practices. Through the development of an innovative approach to teaching accounting, participants have illustrated a significant improvement in their knowledge of proper accounting principles and their ability to implement proper accounting practices in their daily accounting efforts. Participants are taught how to keep their accounting systems in balance by using: 1) an expanded version of the basic accounting equation, “Assets = Liabilities + Equity”, which illustrates how income and expenses impact the equation through the integral relationship of the balance sheet and income statement; and 2) a system of up and down arrows to illustrate which factors in the equation must change to keep the system in balance during typical transactions. Over 250 people have completed the course. Pre and post-test scores indicate significant increases in participants’ knowledge levels. Follow up surveys indicate that participants feel the course has improved the quality of their accounting records.

Materials
Improving On-Farm Accounting Systems-an Innovative Approach to Teaching Accounting - Hilty NFBM conf 2010 Handout
 

Internet Agricultural Bank Simulation Game

Breakout Sessions

Damona Doye, damona.doye@okstate.edu
Oklahoma State University
http://agbanksim.

Co-Presenters
Notie Lansford, Oklahoma State University; Brian Briggeman, Kansas City Federal Reserve Bank – Omaha Branch; Josh Detre, Louisiana State University

The Oklahoma Agricultural Bank Simulation Game (AgBankSim) is an experiential learning tool that has been used with undergraduate students at Oklahoma State University and Louisiana State University and participants at the Oklahoma Bankers Association Intermediate Banking School. Through playing AgBankSim, participants learn key financial, economic, and banking lessons that traditionally were limited to a series of in-person meetings. Because AgBankSim is a software based program, an Internet version was developed which allows participants to play the game virtually. In effect, the classroom borders are expanded, which adds a more “real world” experience with decisions affecting institutions interacting in a wide geographic market. This improves understanding of the complex, competitive environment within which commercial banks operate.

Participants are assigned to a bank management team in a county containing three competing banks, initially with equal market share. Teams make multiple decisions within a time period: interest rates to charge on loans, interest rates to pay on deposits, the number of loan officers to employ and their salaries, salaries for other employees, the advertising budget, the service charge on deposit accounts, and plans for new loans and investments. Participants receive reports on bank performance and changes in market share to use in making decisions for three subsequent time periods. This presentation will highlight features of the Internet Agricultural Bank Simulation game and initial user reactions to it. In addition, we will discuss the benefits of the game in teaching key economic and financial concepts to students and outreach audiences.


Materials
Internet Agricultural Bank Simulation Game
 

Interpreting Financial Statements and Measures

Breakout Sessions

Dale Nordquist, dnord@umn.edu
Center for Farm Financial Management
http://www.cffm.umn.edu

Co-Presenters
Dale Nordquist

One of the unique things about agriculture is that most ag producers also have to be their own chief financial officer. But very few farmers and ranchers have any formal training in finance. The Interpreting Financial Statements and Measures (IFSaM)online workshop series is designed to help ag producers update their skills in interpreting common financial statements (balance sheets, income statements...) and financial performance measures. It is a series of online videos that lead the viewer through interpretation of the statements and measures, show examples, provide actual farm benchmarks, and include interactive “test your knowledge” applications. IFSaM should be particularly helpful to members of farm management associations and farm management education programs -- those who have the data. IFSaM will give them a deeper understanding of the data and will help them put that data to work in managing their businesses.

Materials
Interpreting Financial Statements and Measures
 

Introduction to AgTransitons: The Farm Transition Planning Website

Breakout Sessions

Dale Nordquist, dnord@umn.edu
Center for Farm Financial Management
http://www.cffm.umn.edu

Tens of thousands of producers throughout the country are facing major farm transition issues. Increasing numbers of educators are delivering farm transition planning programs. However, follow-up with individual families is a major challenge. AgTransitions is a new online tool that provides a means for farm and ranch families to develop a written transition plan on the web. Developed by the Center for Farm Financial Management and a team of nationally known educators with extensive knowledge and experience in farm succession planning, AgTransitions is a companion product built on the same framework as the AgPlan business planning tool. It provides users with a built in “curriculum” in the form of an outline for sections that might be included in a plan, tips for each section, web resources, and worksheets. Most importantly, it allows the family members to communicate with reviewers as they develop their plan. AgTransitions is not intended to replace farm succession planning workshops. Rather, rather it provides a means to deliver them more efficiently and to provide ongoing interaction between producers and educators.



Materials
Introduction to AgTransitions
 

Long Term Impact of the Farm Financial Analysis Training Curriculum on FSA Borrowers in Pennsylvania

Breakout Sessions

Kenneth Balliet, klb26@psu.edu
Penn State Cooperative Extension

Structured finance and production management borrower training was an explicit mandate in the 1990 Farm Bill (The Food, Agriculture, Conservation, and Trade Act of 1990). Since 1993 Penn State Cooperative Extension has been meeting the finance training needs of farmers using the Farm Financial Analysis Training (FFAT) curriculum materials. The FFAT course covers fundamental skills and concepts in liquidity, profitability, solvency and efficiency using basic financial statements. The FFAT curriculum uses a combination of short explanations, examples, exercises, quizzes, and own-farm homework to present and demonstrate the use and applicability of these important concepts. The goal of this research was to identify and measure the impacts of FFAT training on participants. Specifically: 1) quantify perceived gains in knowledge, 2) measure changes in management behavior, 3) measure change in specific farm assets and profitability, and 4) assess changes in attitudes regarding farm finance and lending. This research project surveyed participants of FFAT one to five years after taking the finance training. Two hundred and thirty-three (233) participants were sent a numerically-coded survey in September of 2006. Of the initial mailing, sixty-nine (30%) completed surveys were returned. Farm financial training(FFAT) is demonstrated to provide new and at-risk producers with cost effective educational materials that will: significantly increase their knowledge about financial statements, increase their use of financial management tools, improve their comfort and even attitudes when dealing with agricultural lenders, and increase farm profit and net worth.



Materials
FFATResearchFargoND
 

Measuring & Analyzing Farm Financial Performance

Breakout Sessions

Alan Miller, millerwa@purdue.edu
Purdue University Department of Agricultural Economics
http://www.agecon.purdue.edu/extension/sbpcp/index.asp

Co-Presenters
Craig Dobbins, Purdue University

In 1999, Farm Management Specialists at Purdue University developed a set of four Excel-based worksheets for measuring and analyzing farm financial position and performance. These worksheets were first issued in print form in Purdue Extension publication number EC-712. The worksheets were later incorporated into a distance education program entitled "Strategic Business Planning for Commercial Producers" which is available on the internet at: http://www.agecon.purdue.edu/extension/sbpcp/index.asp The worksheets were also used to teach financial analysis in the "Executive Institute for Commercial Producers" program, an educational partnership of the Purdue Center for Food and Agricultural Business and Farm Credit Services of Mid-America. A subsequent program for Farm Credit borrowers, "Making Financial Decisons in Agriculture," is still on-going. Worksheet 1 is used to compile input information derived from the farm operator´s IRS Form 1040 Schedule F and from beginning and ending balance sheets. Selected measures from the Farm Financial Standards Council´s original "Sweet 16" are summarized in Worksheets 2 and 3, and the "Dupont" profitability linkage model is used in a streamlined form on Worksheet 4 to assess proposed changes in the farm operation. In 2010 the four worksheets were revised to reflect changes in the FFSC recommendations in 2008 and to reflect lessons learned from our extensive use of the worksheets in Extension settings over the previous ten years. This presentation provides an overview of the revised worksheets for measuring and analyzing farm financial performance and highlights lessons learned from using this tool to teach financial analysis.

Materials
Measuring & Analyzing Farm Financial Performance Worksheets
Measuring and Analyzing Farm Financial Performance: Revised Worksheets for Measuring and Analyzing Farm Financial Performance
 

Measuring the Economic Impact of the Minnesota Livestock Industry

Breakout Sessions

Gary Hachfeld, hachf002@umn.edu
University of Minnesota

Co-Presenters
None

The 2008 and 2009 production years have been a real financial challenge for livestock producers in Minnesota, especially swine and dairy producers. Many have lost huge amounts of equity in their business while others have simply exited their swine, dairy or other livestock business. Such financial conditions negatively affect the farm family. However, one must also ask themselves what is the economic impact of the livestock industry to Minnesota or what is the economic impact of an exodus of livestock producers?

This presentation will highlight a recent economic analysis of the Minnesota livestock industry utilizing IMPLAN (Impact Analysis for PLANning) software. IMPLAN is an input-output modeling software widely used to study economic structure. Data analyzed included all components of the swine, dairy, beef cow-calf and beef finishing industries for years 2004 through and including 2008. The study examined the value of production inputs and labor purchased by all facets of each enterprise. This analysis was an indication of the overall economic dollar value impact of each livestock enterprise to Minnesota, including on-farm jobs created by the livestock enterprise. Employee compensation, in the form of return to labor and management, was also included. The value of inputs purchased plus economic compensation resulted in the creation of economic multipliers. These economic multipliers were then used as an indication of jobs created elsewhere in the rural economy as a result of the livestock enterprises operating near rural communities.


Materials
Measuring the Economic Impact of the Minnesota Livestock Industry
 

MINNESOTA FARMER ASSISTANCE NETWORK ORIENTATION FOR MINNESOTA EXTENSION STAFF AND LENDERS

Breakout Sessions

Ellie McCann, mccan023@umn.edu
University of Minnesota Extension
http://www.extension.umn.edu/

Co-Presenters
Schwartau, Chuck, University of Minnesota Extension Educator, Regional Office - Rochester, 863 30th Ave SE, Rochester, MN 55904-4915

The Minnesota Farmer Assistance Network (MFAN) was established within the Minnesota Department of Agriculture in the summer of 2009. MFAN’s purpose is to be a one-call place to access a wide variety of resources for farm families under stress. Partners in the network include over a dozen education, counseling and social service agencies.
An Extension working-group determined two audiences that needed to know more about what the network offered were other Extension staff (professional and support staff), and the agriculture lending officers of Minnesota banks. These people often have the first contact point at which farmers and their family members express concern, needs, or frustration with their personal or economic situation.
The working team developed a series of one-hour webinars for the purpose of telling those audiences what MFAN is, who the partners are, what kinds of services and assistance are available, and how to direct farm families in stress to the system.
Three webinars were conducted for Extension staff and two for lenders. The Minnesota Bankers Association agriculture committee assisted with the needs assessment, promotion and delivery of the program for their members.
Evaluations following the webinars show participants were confident they understood the resources available and their ability to direct people to the MFAN resources.



Materials
The Minnesota Farmer Assistance Network
The Minnesota Farmer Assistance Network
 

Planning for Intergenerational Transfers of Family Farm Businesses: Consideration of FSA Payment Limit Eligibility After the 2008 Farm Bill

Breakout Sessions

Alan Miller, millerwa@purdue.edu
Purdue University Department of Agricultural Economics
http://www.agecon.purdue.edu/extension/programs/farm_together.asp

For many Indiana farmers, who produce grain and soybeans, payment limit eligibility requirements under Farm Service Agency rules are oftentimes a consideration when planning for intergenerational transfers of the family farm business. Those requirements were changed by the 2008 Farm Bill and subsequent regulatory actions. A reference paper on this topic was developed for use with the 30th annual Farming Together Workshop at Purdue University, which was conducted in January 2010. Participants in the workshop are always provided with a binder of reference materials and this paper was an addition to the usual items in the binder. The Farming Together Workshop focuses on helping farm families start the process of bring a son, daughter or new owner-manager into the family business. The reference entitled "Farm Business Restructuring in Light of FSA Payment Limit Eligibility Rules in the 2008 Farm Bill" briefly discusses selected rule changes embodied in FSA Handbook 4-PL and FSA notices. It provides suggestions for how to avoid running afoul of those rules when restructuring to accomplish business purposes related to farm estate and succession planning. The presentation provides context for the reference paper by means of a brief discussion of the Farming Together Workshop. In particular, a case study approach used during the Farming Together Workshop to illustrate key ideas dealing with asset transfer and farm entity selection is highlighted.

Materials
Planning Intergenerational Transfers of Family Farm Businesses: Consideration of FSA Payment Limit Eligibility after the 2008 Farm Bill
Farm Business Restructuring in Light of Revised Payment Limit Eligibility Rules Following the 2008 Farm Bill
 

Planning Today for Tomorrow’s Farms

Breakout Sessions

Alice Rhea, arhea@utk.edu
The University of Tennessee Extension

Co-Presenters
Laura Howard, The University of Tennessee Extension

The average age of Tennessee’s farmers has been increasing, reaching 58 in 2007, with more than one-half of them being 55 or older. The aging implies that the next decade or two will witness significant changes in farm management and ownership. These changes pose risks to the continued operation of family farms and to the ability of new and beginning farmers to acquire farmland. These risks are compounded by commodity market volatility and current credit conditions. Estate and transition planning is a key element in the sustainability of farming operations. As profit margins narrow, improved financial management, from documentation and recordkeeping to choice of ownership entity, take on added importance. Although farm business and estate planning can greatly reduce these risks, many producers have not planned for the future of their farms – like the 50% of Americans who die without a will. However, unlike this 50%, farm families often have significant estates and ongoing commercial enterprises to transition from one generation to the next. Educating families about risks inherent in this transition will help to ensure that Tennessee’s next generation of farmers have a farm to operate. A detailed workbook and supporting curricula was developed to educate farm families on the options available for their succession plan. Education was delivered in 2009 through in-service trainings and regional workshops reaching approximately 250 individuals. This information will be disseminated to a much broader audience through face-to-face interaction, county and regional workshops and the continued evolution of an online portal in 2010.

Materials
Presentation
 

Producer Attitudes, Assistance, and Time Allocation Affecting Farm Income

Breakout Sessions

C. Robert Holcomb, holcombr@umn.edu
University of Minnesota Extension

Co-Presenters
Rob Holcomb, Kent Olson, Gary Hachfeld, David Bau, and Jim Kurtz University of Minnesota Extension

Abstract:

Why some farmers are more profitable than others is a perennial question. The answer is of interest not only to farmers, but to all professionals working in the agricultural sector. Farm business data from the Southwest Minnesota Farm Business Management Association (SWMFBMA) show the net farm income for the top producers growing at a faster rate than for all producers. The objective of this study is to identify what the top income group was doing differently compared to the rest of the producers. As part of a larger study, the members of SWMFBMA were surveyed to determine information relating to level of education, how the producer got started in the business, additional farm management education, and attitudes towards an assortment of farm business and risk management issues. This data was compared to five-year averages for financial and physical data. The farms were divided into two groups based on whether the net farm income per operator was less than or greater than $100,000. Initial results show that farms in the lower income group indicated they received more inheritance than the top income group although the top group were more likely to have purchased their farm from relatives. The top income group also indicated they spent more time reading farm management educational material than the low income group. Other variables such as the amount of time spent on marketing and on projecting income and expenses were not significantly differently between the two groups. Other results are presented in the full paper.


Materials
Producer Attitudes, Assistance, and Time Allocation Affecting Farm Income
Producer Attitudes, Assistance, and Time Allocation Affecting Farm Income
 

Profitability Differences among No-Till and Conventional-Till Producers in North Central Kansas

Breakout Sessions

Jason Fewell, jfewell@ksu.edu
Kansas State University
http://www.ageconomics.ksu.edu/DesktopDefault.aspx

Co-Presenters
Kevin Dhuyvetter, Kansas State University Michael Langemeier, Kansas State University

Economies of scale often exist for farmers who adopt no-till because they are able to use fixed resources more efficiently. Crop rotation also affects no-till farmers’ profitability. This paper seeks to determine profitability differences among no-till and conventional-till farmers, differentiating among those who have practiced no-till for longer periods.

The transition to no-till can require relatively large investments in equipment and potentially have negative impacts on yields while producers adopt this technology. Thus, profitability of no-till farming might be considerably different in early years compared to later years. To quantify this, a time dimension is included to determine if long-run profitability is higher for long-term no-till farmers compared to later adopters. The analysis uses whole-farm cost and revenue data from 200 farmers in the Kansas Farm Management Association’s North Central region to compute five-year average profit margins per acre and determine profitability differences among farmers practicing no-till for at least five years, those practicing less than five years, and conventional till farms. Expense ratios help determine differences in whole-farm profitability among tillage practices.

By recognizing and understanding factors that impact profitability differences among operations, producers can make informed management decisions. Results from this study are expected to show that farmers are able to lower machinery costs by switching to no-till, thus increasing profit. Results can also assist expanding producers who lack machinery or labor requirements to accommodate additional land. Additionally, results will help producers identify how the adoption of no-till might affect crop rotation and corresponding production expenses.


Materials
Presentation
Presentation
 

Purdue Agribusiness Management Simulation

Breakout Sessions

Freddie Barnard, barnardf@purdue.edu
Department of Agricultural Economics, Purdue University

Schools of business and departments of agricultural economics have used management simulation "games" for years to provide an experiential learning experience for students and business managers on the principles of business management. The Purdue Farm Supply Management Simulation Game has been used for that purpose at several universities for both undergraduate courses and in Extension workshops with agribusiness managers. However, the simulation was last revised in 1992, which has limited it application at some institutions. A project has been underway for more than a year to update the program software and to enhance its capabilites. The revision of the program was completed in the fall of 2009. The latest version includes modules on finance (including 3 interest rate scenarios), financial statement analysis, product pricing, inventory management (including a feature to allow the submission of emergency product orders), sales forecasting and other variables. The purpose of the session is to demonstrate the features of the new version of the simulation that attendees could then evaluate and consider for use in undergraduate classrooms and for Extension programs.

Materials
Management Simulation-Presentation
 

Quickbooks for Farm Business Recordkeeping

Breakout Sessions

Jenny Vanderlin , jmvander@wisc.edu
Center for Dairy Profitability
http://cdp.wisc.edu

Co-Presenters
Stan Schraufnagel, Professor, Ag Economics University of WI-River Falls

Over the past four years, the University of Wisconsin-Extension (UWEX), Center for Dairy Profitability (CDP), and UW-River Falls have been conducting workshops on the use of QuickBooks (QB) for farm business recordkeeping, with financial support from the RMA and RME. Registrations for these hands-on, computer lab sited workshops were at capacity and evaluations were excellent. These workshops target a beginner audience and focus on basic accounting skills via the processing and reporting of cash records. The goal of these workshops is to improve the basic accounting and record-keeping expertise of farm businesses so they are able to complete more of the accounting tasks, produce more accurate cash financial records (Schedule F) and work more effectively with their hired accountant. This breakout will review teaching outline and manual, delivery method pros/cons and evaluation results.


Materials
Quickbooks for Farm Business Recordkeeping
 

Risk-Assessed Marketing II: Helping Producers Manage Crop Production and Marketing Risk in Volatile Production and Marketing Environments

Breakout Sessions

G.A. (Art) Barnaby, barnaby@ksu.edu
Department of Agricultural Economics, Kansas State University
http://www.AgManager.info

Co-Presenters
Daniel O´Brien, Department of Agricultural Economics, Kansas State University Richard Llewelyn, Department of Agricultural Economics, Kansas State University

High volatility of grain prices and costs of production in the last few years have greatly increased risk exposure to grain farmers. Also complicating the risk management landscape for producers are new government programs, including the SURE and ACRE programs. Further, the inter-linkages between these programs and with crop insurance coverage options adds to the complexity associated with farmer’s participation decisions.

To help farmers deal with these complexities and risks, this project uses a case study, with producers making risk management decisions for a typical grain farm during an upcoming marketing year. Participants are given various insurance and grain pricing alternatives and the eligibility requirements of the SURE and ACRE programs. They make marketing and risk management decisions, including crop insurance coverage levels and participation in the ACRE program under both yield and price uncertainty. Participants draw yields randomly from a distribution of yield outcomes. Gains and losses from the sale of grain and collection of insurance, ACRE or SURE payments are calculated. Costs of production are deducted, including premiums for crop insurance and options.

Seven workshops were presented in Kansas, Nebraska and Ohio, targeting wheat and feedgrain producers, with 141 participants. The morning session sets the stage for the case study, discussing the effective use of risk management tools, integrated with SURE, ACRE, and other government programs, and different types and levels of crop insurance. In the afternoon, participants understand through the case study how all of these tools can be integrated into a whole-farm risk management strategy.


Materials
Risk-Assessed Marketing II (RAM II) Workshop_Barnaby
 

SAVE TAXES WHEN SELLING BREEDING LIVESTOCK

Breakout Sessions

James Casey, jcasey@ulm.edu
Univ. of Louisiana, Monroe (ULM)

As you begin to organize your farm and ranch tax records for filing your 2010 income tax return, you should separate the sale of breeding stock from your normal calf sales. Report your normal calf sales on schedule F, along with your operating expenses for the farm business. However, the sale of breeding stock actually receives a different tax treatment and will not be recorded on schedule F. Under current tax law, the sale of purchased breeding livestock will result in a tax liability on depreciation recapture and possibility a capital gain. However, the sale of raised breeding livestock will result generally in a capital gain. In either case, the sale is not reported on schedule F and thus is not subject to self-employment tax. In addition, the capital gains rate for tax brackets one and two is zero from 2008-2010. The sale of raised breeding livestock could result in no tax liability. It is important to keep a good set of records on you herd and alert your tax preparer regarding the sale of breeding livestock. It is very important to emphasize that this discussion is very general and, in no way, should be a substitute for the advice of a good tax professional. There are many variations and circumstances that may alter the results in the above discussion. To take advantage of the zero percent tax rate for 2008-2010, farmers and ranchers can utilize a variety of strategies to manage or minimize their taxable income. The bottom line is that the taxpayer needs to consult with a tax professional to develop and implement a sound strategy.

Materials
Casey Presentation
 

Supporting Farm Financial Planning via Citrix

Breakout Sessions

Arlin Brannstrom, ajbranns@wisc.edu
UW Center for Dairy Profitability
http://cdp.wisc.edu

Accounting and farm financial planning are challenging in good economic times. With near record low prices for milk in 2009 the "teachable moment" has arrived!

This paper will discuss my experiences in supporting FINPACK training with agents and producers during the 2009/10 winter season. The observations come from supporting FINPACK via computer web conferencing as well as teaching financial management concepts to students in a six week class taught on the campus.

The presentation will focus on the pros and cons of supporting complex modelling software both in the classroom and as a remote computer guru.

The experiences gained in supporting FINPACK software could easily be extended to support other high tech software in the future as more producers acquire adequate bandwidth for remote support.


Materials
FINPACK through the ages
 

The Current Situation in Farmland Ownership; Implications for the Conservation and the Next Generation

Breakout Sessions

Michael Duffy, mduffy@iastate.edu
Iowa State University
http://www.econ.iastate.edu/faculty/duffy/

Who will farm the land and how will it be farmed? This presentation will address these two fundamental questions by making several observations on the history and current situation and then draw inferences about where this might be leading us.

The first observation is that the age of the farmland owner is increasing and increasing at a rapid rate. The percent of Iowa farmland owned by people over 65 has increased from 12 percent in 1910 to 55 percent in 2007. Today in Iowa one in ten acres is owned by a single female over 75 years of age.

A second observation is that the percent of land rented has not changed much over time. Approximately 35 percent of the land in the US has been rented over the past century and in Iowa approximately 50 percent has been rented. Both the US and Iowa experienced an increase in the percent of land rented during the Great Depression. But since then the percentage has remained relatively stable. Does this observation coincide with the observation that we have an aging land owner population? Wouldn’t we expect to see an increase in the percent of land being rented?

How have these changes impacted the opportunities for a beginning farmer? How have they impacted the potential for conservation? These are the questions that will be explored by this presentation.




Materials
The Current Situation in Farmland Ownership
 

THE ECONOMICS OF ORGANIC, GRAZING, AND CONFINEMENT DAIRY FARMS

Breakout Sessions

Tom Kriegl, tskriegl@wisc.edu
Center for Dairy Profitability - UW Extension
http://cdp.wisc.edu/

Ten Land Grant Universities plus Ontario standardized accounting rules and data collection procedures to gather, pool, summarize and analyze actual farm financial performance from many sustainable, small farming systems which currently lack credible financial data that producers need for decision-making, in a project initially sponsored by USDA IFAFS grant project #00-52501-9708.

This effort compares Wisconsin organic dairy farm data to grazing and confinement data since very little organic dairy data was collected from outside of Wisconsin. However, the Wisconsin data is compared to the limited amount of organic data collected in other parts of North America.

This project has over 80 farm years of Wisconsin organic dairy farm data spanning ten years to help understand the level of economic competitiveness of organic dairy farming.

Insights include:
1. Actual farm financial data from organic dairy farms is still scarce.
2. The financial performance of organic dairy farms looks dramatically different from one part of the country to the other.
3. Organic dairy farms in the data were financially competitive with other dairy systems in Wisconsin in the last ten years.
4. The price premium was very important to the financial competitiveness of organic dairy farms.
5. Management intensive rotational grazing (MIRG) appears to enhance profitability of dairy farms more than organic practices do.
6. Organic dairy farms that effectively raise most of their feed tend to be more financially competitive.

The up-to-date conclusions of this project can be accessed at http://cdp.wisc.edu.


Materials
The Economics Of organic, Grazing, and Confinement Dairy Farms
 

The Mississippi State Budget Generator

Breakout Sessions

Gregory Ibendahl, ibendahl@agecon.msstate.edu
Mississippi State University

Estimating farm profitability for the upcoming year is an important task for farmers, lenders, and landowners. Budgets are used for this task but developing or finding a good budget relative to the farm´s location can be difficult. In addition, a good budget needs to reflect current prices in its calculations. The Mississippi State Budget Generator (MSBG) is one tool that anyone can use to develop a budget that accurately reflects the planned field operations and also reflects current input prices. The MSBG takes a somewhat unique approach to budget development. It uses a database of frequently used inputs and then has users input what is planned for each trip across across the field. While the MSBG has been available for a few years, a new version is being developed that is more user friendly. This presentation will demonstrate the newest version of the MSBG and show users how they can develop crop enterprise budgets for their farms.

Materials
Not Available
 

The Wisconsin Dairy Ratio Benchmarking Tool

Breakout Sessions

Victor Cabrera, vcabrera@wisc.edu
University of Wisconsin-Madison
http://DairyMGT.info

Co-Presenters
Jenny Vanderlin University of Wisconsin Center for Dairy Profitability

Financial information of +500 dairy farms in Wisconsin from the Agriculture Financial Advisor (AgFA©) database maintained by University of Wisconsin Center for Dairy Profitability from years 2000 to 2008 were used to calculate distributions of 15 financial measures: current ratio, net working capital, debt to asset ratio, equity to asset ratio, net farm income, rate of return on farm assets, rate of return on farm equity, operating profit margin, term debt coverage ratio, replacement margin ratio, asset turnover ratio, operating expenses ratio, depreciation expense ratio, interest expense ratio, and net farm income ratio. In each year of analysis, the tool can filter the financial ratios distributions on herd size, income per cow, or milk per cow to display cumulative probabilistic distributions against which specific farm measures can be compared. Results from the Wisconsin Dairy Ratio Benchmarking Tool display a series of 15 graphs (one for each financial measure) and a DuPont Analysis that allow one to compare a farm financial health to the industry standards and to Wisconsin benchmarks. The tool has been created entirely as an Excel spreadsheet and it is freely available at the University of Wisconsin Dairy Management Website at DairyMGT.info. A series of workshops are being held to disseminate this tool to help producers´ monitor and improve their farms´ financial health. A practical tool for benchmarking Wisconsin financial measures has long been requested.

Materials
Wisconsin Dairy Ratio Benchmarking Tool
 

Tools to help Ohio´s Dairy Farmers manage through 2009´s challenging economic conditions

Breakout Sessions

Dianne Shoemaker, shoemaker.3@osu.edu
The Ohio State University Extension

Co-Presenters
Dianne Shoemaker, The Ohio State University Extension David Marrison, The Ohio State University Extension

In December 2008, milk prices plummeted to historic lows creating an unprecedented and continuing economic crisis at the farm level. Ohio’s 3,328 dairy producers are struggling with the impact of low milk prices on their businesses. Dairy producers must make good decisions quickly in the current business climate, knowing potential long term impacts on production and profitability. OSU Extension focused efforts on identification of critical issues impacting Ohio dairy producers and providing producers with tools to help manage through this challenging situation. These tools include: “Dairy Issue Briefs” fact sheets, the “15 Measures of Dairy Farm Competitiveness” bulletin, and “Simple and Useful Cost of Production Worksheets”. Throughout 2009, critical on-farm issues were identified by OSUE’s Dairy Working Group. Team members wrote 25 Dairy Issue Briefs (DIBS) addressing these issues in the areas of nutrition and feed costs; reproduction and health; calf and heifer management; business and finance; and people and stress management. Each brief provides a short explanation of the issue, short and long term consequences of different options, and our “Bottom Line” summary. The recently updated 15 Measures bulletin identifies key business measures and benchmarks achieved by competitive Midwest dairy producers with sample calculations and discussion for each. Finally, knowing the farm’s historic and projected costs of production is also critical for Ohio’s dairy farmers. The Cost of Production Worksheets are an effective tool for producers with limited financial information to begin calculating and using cost of production information as they address current critical business issues.

Materials
Shoemaker ppt presentation
15 Measures of Dairy Farm Competitiveness
Cost of Production Worksheets
Dairy Issue Briefs Summary
 

Transferring the Farm in a High Stakes Era: A Workshop for Retiring and Beginning Farmers

Breakout Sessions

Trisha Wagner, trisha.wagner@ces.uwex.edu
University of Wisconsin Extension, Jackson County Agriculture Agent

Co-Presenters
Maria Bendixen University of Wisconsin Extension Dairy and Livestock Agent, Clark County

A generation ago, passing on the family farm was a simpler process. Profit margins were higher, land values were lower, farm sizes were smaller, and tax rates were not as significant. More often than not, a farmer could draft a simple will to transfer ownership to his children. Today, the transition generally takes place over a number of years, thus today’s successful farm succession demands better planning and communication.

A University of Wisconsin-Extension program was created to address these issues for farm succession in today’s high stakes climate. The program is designed to provide tools and information to help the succeeding generation establish a firm financial footing and learn to manage the business as well as address issues of the retiring generation, who must to be willing to turn over control of the business and trust that the successor will do well. Farm families gain the skills necessary to develop a working plan to make the actual transition smoother and improve their ability to communicate the transfer details with family members.

The program was held in three Wisconsin locations for over 200 participants, 85% of which plan to develop a farm business arrangement or will as a result of attending the program. In addition, six follow-up workshops were held at the county level, which further addressed farm business arrangements in more detail. Also, county agents/educators from throughout western Wisconsin are continuing to follow up with individual consultations many of these participants.



Materials
Transferring the Farm in a High Stakes Era
 

Transforming Data into Knowledge: Defining the Six Steps of Information Management

Breakout Sessions

Bradley Hilty, bhilty@psu.edu
Penn State University
http://www.das.psu.edu/dairy-alliance/im/information-management

We are living in the information age! Farmers and their advisors have access to ever increasing amounts of data. However, data does not equal knowledge. To be effectively used in making decisions, data must go through a transformation process that involves six basic steps: 1) data collection, 2) data organization, 3) data processing, 4) data integration, 5) data reporting and finally, 6) data utilization. Through this process data is transformed into information, which becomes knowledge, if interpreted correctly. However, mistakes at any level of the process compromise the entire system, resulting in useless information. The Dairy Herd Improvement program is a premiere example of the process. Standardized data collection procedures, and the definitions and formulas which organize the data, are the foundation of the program. The weak link with DHI data is in the utilization step, as many producers fail to review their reports. Applying the process to financial data is needed to supplement the efforts of the Farm Financial Standards Council, which has done an excellent job in developing standards for certain phases of the process. Educators and industry professionals in Pennsylvania and the Northeast collaborated to develop a standardized chart of accounts for dairy accounting systems, which is now available as a PDF document or in a QuickBooks backup file. Analysis and planning tools that can automatically integrate data from accounting systems using this chart of accounts will enable producers to utilize their accounting and other information systems to make well informed decisions.

Materials
Slide Handouts for Six Steps of Information Management - Hilty NFBM Conf 2010
Standardized Chart of Accounts for Dairy Farm Business Accounting Systems- Hilty 2010
 

Variable Cash Rent Arrangements: Types and Evaluation

Breakout Sessions

Gary Schnitkey, schnitke@illinois.edu
University of Illinois
http://www.farmdoc.illinois.edu

Co-Presenters
Gary Schnitkey, University of Illinois Ryan Batts, University of Illinois

After attending this session, participants will understand how to design a variable cash rent arrangement for leasing farmland. Participants also will understand how variable cash rent arrangements compare to share rent and cash rent arrangements.

Variable cash rent arrangements vary cash rent based on some formula. Likely due to recent increases in price variability, variable cash rent arrangements have increased in use in the Midwest. In Illinois, for example, most professional farm managers now use some form of a variable cash lease.

During this session, common forms of cash rent arrangements first will be described. Results from a survey of Illinois professional farm managers will be presented detailing common variable lease arrangements. Focus will be given to arrangements basing cash rent on a percent of gross revenue, as these are the most prominent variable lease type. Methods of specifying prices and yields for determining revenue will be described and forms will be passed out that aid in revenue definition and calculation. The goal of presenting this material will be to aid participants in designing a cash rent arrangement.

Second, a FAST Microsoft Excel spreadsheet will be presented that evaluates the risks and returns of a variable cash rent arrangements. This spreadsheet compares the risks and returns of variable cash rent arrangements to share rent and cash rent arrangements. In so doing, individuals will be able to see how the risks and returns of variable cash rental arrangements compare to other, commonly used leases.


Materials
Variable Cash Rent Powerpoint
 

What Is It Worth If You Stay On The Farm: Evaluating The Contribution Of The On-Farm Heir

Breakout Sessions

John Baker, jrbaker@iastate.edu
Beginning Farmer Center, Iowa State University
http://www.extension.iastate.edu/bfc

Co-Presenters
David Goeller University of Nebraska

When one or more of the heirs have worked in the farm family business and contributed to the wealth accumulated by the owners how is the heir’s contribution valued? Further complicating the matter is the fact that such contribution may be in made in several ways. For example the farm may have expanded its asset base, added or retained and enterprise, or invested in facilities that the owners would not have otherwise done had the heir or heirs not returned to the farm business.
Often times, as the owners’ age, the on farm heir is the provider of other services such as maintenance on the parents’ house, transportation, shopping, in home health care, management of the owners’ farm business. If the parents were to purchase such services and pay for them at the time they are received it would diminish the value of the estate.
How then is the value of the contribution of the in business heirs to be calculated. Of course, every farm family business is unique as is every farm family, thus there can be no one answer to the question of valuation. The Beginning Farmer Center has developed a case study and spread sheets to initiate the conversation concerning valuation. The case study and spread sheets provide an example and a process to begin quantifying the contribution and are intended to be used as a starting point for the decision on this important issue.



Materials
Not Available
 

Why did crop producers enroll or not enroll in ACRE?

Breakout Sessions

William Edwards, wedwards@iastate.edu
Iowa State University
http://www.extension.iastate.edu/agdm/

Co-Presenters
None

The 2008 Farm Bill introduced a new risk management program for crop producers--the Average Crop Revenue Election (ACRE). ACRE was offered as an alternative to the existing Counter Cyclical Payment program, and protected against declines in gross revenue instead of prices. Despite basing revenue guarantees on higher prices and yields than were used to determine counter-cyclical payments, signup rates for 2009 were only from 5% to 20% of eligible farms in north central states.

A survey will be conducted to find out what factors influenced farmers´ decisions to enroll in ACRE or not, how producers acquired information about ACRE, what their financial risk position is, and what features of ACRE they would like to see changed. The proposed presentation will summarize the results of this survey from up to 5 north central states.


Materials
Why did crop producers enroll or not enroll in ACRE.ppt
 
 
 

 

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