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November-December, 2005 Newsletter of ATTRA - National Sustainable Agricultural Information Service: A project of the National Center for Appropriate Technology (NCAT). Successful Record Keeping for Sustainable AgricultureThe surge of interest in organic farming—that requires producers to document their activities—has created a surprising payoff for all farmers & ranchers: a wealth of new record-keeping systems. These tools are valuable for all producers who want to improve their business and resource management practices. The more you know about how your various enterprises are doing, the better off you'll be. You may discover that you have great cash flow in one part of your business and decide to expand it. Or you may want to phase out enterprises that are not as satisfying and profitable. This issue of ATTRAnews looks at the critical role of record keeping for successful farms and ranches. In this issue:
================ One Farm's Cash-Flow Budget Blues: A True Report from Our Specialists in the FieldBy Ann Baier, NCAT Agriculture Specialist
A group of farmers stood in the field. They had worked hard to develop a cooperative. They rented land together, shared equipment, and marketed high quality fresh vegetables. They were struggling, yet holding out hope of becoming financially successful. What was the outlook for their business? My NCAT colleague, Martin Guerena, and I met with them one morning to develop a cash flow budget. We taped two big sheets of paper across the back of a pickup truck and sketched a chart: months from left to right across the top; income and expenses down the left-hand side. We talked through their sources of income. Where were they selling produce? Farmers' markets happened every week from April to November. They estimated total monthly sales and wrote that number in the column for each month. Income began slowly in spring, peaked later in summer and trailed off into the fall: wholesale, restaurants, and farm stands. Another source of income came from doing tractor work for others. They had received a grant for cooperative development and noted the payment in the column for the month they received the funds.
Numbers tumbled through their voices onto the page, transaction by transaction, month by month. Anything else? A few more details came to them and we wrote them all down. Then we added up the columns. Every month came up short—some by a little, some by a lot, depending on the season and the magnitude of expenses due. With every "equals sign" came confirmation of the reality they all knew in their gut. Seeing it on paper was sobering, yet seemed to give them permission at last to say, "It is not for lack of desire or strength of will that we lay this project down. We come to that decision based on realistic analysis of the finances of this business. We have found that it cannot go on in its present form. Our idealism propelled us, but we cannot build our future merely on dreams and aspirations... While we wish we had done this financial analysis much earlier, it is good to have done so now. Now we can move forward with other plans." In the years since the cooperative folded, several of the farmers have started new enterprises with their families and the former members. They have learned from the co-op's mistakes and are going forward with their new businesses—and new records.
Keeping Good Records: It’s Not Just for Organic FarmersBy Ann Baier, CCOF Organic Inspector and NCAT Agriculture Specialist
Dairy farmers described how their record keeping helped them maintain healthier herds and good milk production after just a single year of organic certification. Gary and Patricia Belli of Belli Dairy in Ferndale, California, noticed their herd’s milk production had dropped. They were keeping track of their purchases of organic feed, with lot numbers and amounts delivered from various sources. By looking at their feed purchase records, they could see the relationship between the drop in production and the time when they used feed from a certain source. They asked their supplier to avoid a batch of feed that appeared to be of poor quality. When they resumed feeding the better quality feed from other lots, their milk production problem was solved. Robin and Maralyn Renner are a
brother and sister who manage Diamond
R Ranch, also in Ferndale. They
operate a dairy and raise organic beef.
They described how much healthier
their herd was after they began operating
as an entirely certified organic operation. Organic certification required
that they keep more detailed
and accurate records. After working
with these records for several
months, they said, "We began to
recognize patterns." Better records
helped them connect the dots. They
saw correlations and discerned
causes and consequences, putting
what they learned into practice in
an organic production system. Their
animals are healthier and their dairy
is more profitable. When I spoke with
Robin to ask permission to give them
credit for this story, he reiterated
how the repetition of recordkeeping
for organic certification makes things
more obvious. "We're glad we did
it," he said. "Every year gets better."
NCAT Conducts Organic Training in the SouthBy Barbara Bellows, NCAT Agriculture Specialist
Each of the 12 training meetings were developed and conducted with local universities, cooperative extension, producer organizations, and state departments of agriculture. While all meetings focused on organic production and the National Organic Program (NOP) certification, the Arkansas meeting included discussions on the scientific basis of organic farming practices, the Tennessee meetings reviewed records from organic farms, and the Kentucky meetings included hands-on demonstrations of organic practices and record keeping. The Louisiana meeting addressed organic marketing and production issues, while the Mississippi meeting focused on how to find and share information and resources. The trainings were funded by the Partnerships for Risk Management Education Program of USDA's Risk Management Agency. Six new documents, listed below, were developed and distributed through this project. (Available at /risk_management/srmgateway.html)
ATTRA Publications about Record KeepingAll these publications, and many more on all aspects of sustainable agriculture, are available for free from ATTRA at 800-346-9140 or www.attra.ncat.org.
Farm Financial Record Keeping
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Then came expenses. We started
with fixed costs—the expenses they
had whether they planted one acre
or sixty. Office rent due each month,
monthly telephone service,
electric bills. Insurance payments
due in February and August.
We continued by noting variable
costs. They knew these well, and
we quickly filled the columns with diesel fuel, drip tape, sprinkler repair, compost, other fertilizers, seed,
transplants, stakes and twine for tomatoes and peas, vegetable boxes and
clamshells and crates for strawberries, labels...
As an organic inspector for California
Certified Organic Farmers, I have
heard from farmers that an important
benefit of organic certification is that it
requires and inspires them to keep better
records. Records help identify and
solve problems more readily.
Many southern states have relatively few certified organic producers. This fall,
NCAT agriculture specialists teamed up with the Independent Organic Inspectors
Association to provide training on organic farming for southern producers,
co-op extension educators, and other technical support personnel. The meetings
were conducted in Arkansas, Tennessee, Kentucky, Louisiana, and Mississippi. 
©
Copyright 2005 NCAT