ihcakter
Brockets Ag Advice
H|k> M By John E. Brockett
Farm Management Agent
Hi frj& Lewistown Extension Office
I have a very brief time left to
write about financial
management. Once grass starts to
“green up” and leaves start to pop,
you will no longer be interested in
this topic. Planting time is a tonic.
It is also an opiate that can cause
even the most destitute farmer to
be optimistic. The next two years
will be hard on farmers in general.
Meat prices will probably move up
later this year, but the initial feed
costs are high and so will reduce
profits. High grain prices now will
cause excess plantings and
probably depressed prices by
June. The only way out ot the milk
surplus problem is for a rather
large number of dairymen to go
out of business. The number who
will have to go under to correct the
situation will depend on the suc
cess of the suggested promotion
hnd product development plan.
Now that I have laid out the
rationale for a discussion on •
financial management let us
begin.
The biggest single problem for
farmers is cost-return control.
Agriculture is not the only business
that has this problem. This was the
reason for Chrysler’s and In
ternational Harvester’s financial
trouble. It is the reason banks fail.
It is the reason why so many small
businesses fail in their first 2
years. It is why individuals fail
financially. As my wife used to tell
me, “we each have our job - yours
REEL BAR TEDDERS
Popular 7 ft wide ground driven and
pto driven models Also Bft wide pto
model covers 2 windrows from
haybme.
SUPER 16 MODEL
4 Rotary Heads flex to float over un
even ground 16 ft wide Covers 13
acres/hr at 7 mph Pto driven Forks
sweep hay sideways, lift, turn & spread
uniformly in back for fast drying
SHAKE W RAKE Model
is two machines in one Teds Bft
wide Rakes a fluffy windrow with
basket down
Write or phone for full details and
nearest dealer's name
Phones; (802) 775-5411 or (802) 773-9519
G.H. GRIMM Co., Inc.
P.O. Box 130-HL, Rutland. VT 05701
*B4
hKfli 3,
is to make money and mine is to
spend it. The only problem is that I
do a better job than you”. We use
that as a family joke, but too often
in the case of a farm business there
is no joke, because when spending
exceeds making, the result is a
business failure.
Some farmers say “if I could get
$X for my product, I could make
it”. I remember when $lO milk and
$2 corn were the dreams. It
seemed that we could weather any
storm at those levels. The sad truth
is that very few farmers really
know where their breakeven price
is For most farmers the breakeven
price they use is one they heard or
read. If every farmer in Penn
sylvania were given a guarantee
that they would get at least their
breakeven price plus 10%, what
range of figures would be get? If a
stipulation was made that to get
that return, you had to prove it,
could you qualify?
Cost of production is a very
evasive figure. I can give you the
average cost of producing most
farm products. Unfortunately that
average figure is virtually wor
thless to you. I can tell you the cost
of production for the most efficient
operators as well as the least ef
ficient operators. Either one would
be as to you as knowing
where you stand in the DHIA
RANCH
For hi
yet pai
Ideal f
trees
Optioi
listings. (that one should rile
someone). The only cost figure
that is worth anything is yours.
And its major value is to help you
set soem goals and make some
management decisions.
Even cost of production ranges
are indadequate. for example: in
the 1982 farm enterprise analyses
that I ran, the cost of producing
milk ranged from under $lO per
cwt to nearly $lB per cvvt. Or look
at this, the range of costs of
producing corn in 1983 ranged from
a little over $2 to nearly $4 per
bushel according to my first 20
enterprise analyses.
If you don’t know what it cost you
to produce a product, how do you
► CLIFF ~ E LUNGER A
CITIES 1
Chain Saw Sharpening Days!
Bring your saw in for Sharp Savings.
DRYDENE
OILS
•Gap
S
; a,
s
ft'
“SINCE 1967 BETTER BUILDINGS
BY BOLLINGER”
COMMERCIAL •INDUSTRIAL
DESIGN « ERECT
METAL BUILDINGS
POLE BUILDINGS BARNS-GARAGES
FARM BUILDINGS WAREHOUSES
fr'^MITED^
[/ tU IOING NC lit
Progressive Ideas in
Pre-Engmeered Structures
RD2, DENVER
215-267-6046
ONDA
UMPS
&
GINES
HOUSTON RUN SALES & SERVICE
AMOS L. STOLTZFUS
HUSQVARNA & POULAN CHAIN SAWS
HONDA MOTORS
Box 67 - Hensel Rd. Kinzers, PA 17535
know what price you need to be use records and learn your
profitable? Do you want to prosper production costs.
as a farmer? If so, then keep and want profits must strive
to that end.
Chester plans meeting on bay
WEST CHESTER - The Chester
Co. Conservation District will host
a meeting March 19 on “The
Chester County Farmer and the
Chesapeake Bay” at the
Russellville Grande Hall on Rte. 10
A
r *'
oulcm
ham Saws
i* Rough &
\ Tumble
A Museum
.fy\
?A« HOUSTOI
from 7 p.m. to 9 p.m.
All farmers, landowners and
township officials in the Octoraro
and Elks Creeks watersheds are
urged to attend.
WEED
EATER
MAYTAG
WRINGER WASHER
SALES & SERVICE
30 ta s V--- Lancaster
W 1 —■ ’
Kinzer
Amish Road
RUN SALES & SERVICE
RCWMV INSUfUMCt CROUP /^N
FARM H F HEALTH HOME AUTO
HEATMATE
HEATERS