Dl4-Lancaster Farming Saturday, December 20,1906
(Parti)
BY ROLAND P. FREUND
Area Farm Management Agent
A recent national survey by a
prominent business magazine
found that most people think a lot
about money. It was not stated how
many of the respondents were
farmers, but we can probably
assume that most fanners spend a
lot of time thinking about money.
The problem is that just thinking
about such things does not make
them happen. In farming today it
requires the application of many
skills to convert desires and even
work effort into a financial profit
for the operator.
Management, one of the least
practiced skills, is the process
through which we convert thoughts
and dreams about money into a
working plan to get some of it into
our pockets. Twenty years ago it
did not matter a great deal how
you went about planning
chances were good that out of each
dollar taken in you would get to
keep 40 cents. Today it takes very
careful control to keep even 20
cents, and the situation is going to
be much more difficult in the
future.
Unless you are really prepared
to manage your farm today, you
may find that in a few years time
you won’t be able to manage to
farm. Management is now a farm
activity which is just as important
as milking the cows, and time
needs to be set aside for it. To be
effective and productive we need
to organize a management
program for the farm just like
we have a cropping program or a
feeding program (which, in-
op
Agway of Leesport
Angstadt Trucking
Bank of Pennsylvania
Berks-Lehigh Valley Farm Credit
Bernville Bank
Bernville Quality Fuels
Boscov’s
Rich Brandt Farm Real Estate
F.M. Brown’s Sons, Inc.
Columbia Cutlery
Pete D'Angeli
Diesel Service, Inc.
DeSantis T ransportation
Farm Bureau
Fies Catering
Ist Federal Savings & Loan
Assoc, of Pottstown
Six Steps To Establish Control Of Farm Business
The Basics Of Management
cidentally, are parts of the
management process).
Management must be con
tinuous, and like the seasons, it
goes in cycles. In this series we’ll
not get into much of the detail
about specific procedures, but let’s
take a cycle step by step and
consider:
1. Analysing the farm situation
2. Setting Goals
3. Examining alternatives in a
farm plan
4. Putting the farm plan into
action, and the back-up plan
5. Keeping track of performance
6. Analyzing results and setting
new goals
Every farmer has some form of
management program in place,
even if it’s all carried around in his
or her head. Hopefully this series
of discussions will help you to
examine your system, brush the
cobwebs off, beef it up, and oil it, so
that it can be the smooth-running
control unit for a more profitable
farm business. You never can tell
if you get it operating more
profitably you might even have
time to think about other things
besides money!!
Step 1. Where are you now? or
Analysing your farm situation.
Before we can improve, we must
know our present situation, and
take stock of all the resources that
are available to us. We should
know our strengths and
weaknesses, and keep a record of
these things so that in the future we
can use this resource list as a
baseline against which to measure
progress through time.
Under resources we should list;
Family not just as potential
laborers, but the abilities and
management savy of each
member
Land by productivity class,
owned as well as rented
Buildings and Structures
condition, capacities etc.
Equipment and machines
Livestock by groups and
production levels
Crops with yield potential and
quality
Inventories of feed, fertilizers,
and supplies, workshop tools etc.
Cash, bank deposits, shares etc.,
plus cash value of life insurance.
If we place a dollar value on each
of these physical assets, we have
most of our net-worth statement
work done. With or without
valuation, such a listing is im
portant in the planning process, for
these resources will largely
determine what enterprises we
can, or should not consider.
Unless we are very fortunate, we
will also have liabilities such as:
mortgage, loans and notes with the
bank, family loans, dealer debt,
charge accounts, and unpaid ac
counts, also other obligations like
lease payments. These all need to
be listed, with current balance and
monthly and annual payments.
For detailed steps in preparing a
net-worth statement, contact your
extension office of Penn State’s
Cooperative Extension Service,
and ask for Financial Management
for the family farm Volume 85,
(Home study) No 6 - THE
BALANCE SHEET...
A suitable time to do this stock
take is at the end of each ac
counting year, so that the balance
sheet can be viewed along with the
Thank You! And Happy Holidays To
Those Who Supported Our
1986 Livestock Sales From The Berks
County 4-H Beef, 4-H Sheep and Lamb,
And 4-H Swine Clubs.
Marvin Frantz
Gehman Feed Mill
Harvey George
George’s Foodliner
Hamilton Bank of Lancaster
Ruth Hartman
Hatfield Packing Co.
Dr. W. Thomas Jay
Dave & Constance Kantner
Keller's Crop Service
Kings IGA
Kissler’s Trucking
Kutztown Grange
Kuzan’s Hardware
Lebanon Valley National Bank
Leesport Farmers Market
Manor Equipment
farm profit and loss statement.
These together give a view of
where we are, and will also provide
a good indication of the condition of
our business at the particular time.
A good manager will not view the
careful preparation of these
documents as “boring tasks to
satisfy bank loan officers.”
From the results of your ob
servations you should ask yourself,
“Can I go on like this for the rest of
my life?” If vour answer is “no”,
Update: Nearly 18,000 Acres
Signed To Conservation Reserve
UNIVERSITY PARK - Penn
sylvania farmers put 17,885 acres
of the state’s highly erodible
cropland into the U.S. Department
of Agriculture’s Conservation
Reserve Program in 1986. USDA
had hoped to enroll 82,000 Penn
sylvania acres in the CRP in 1986.
Nationally, USDA has accepted
almost 9 million acres. The goal
was to sign up 5 million in 1986, and
10 million additional acres in 1987.
Acres Acres
bid accepted
First signup (March 1986) 13,663 2,463
Second signup (May 1986) 13,447 8,285
Third signup (August 1986) 8,840 7,137
NATIONAL
bid accepted
First signup (March 1986) 4,818,561 838,356
Second signup (May 1986) 4,646,524 3,000,681
Third signup (August 1986) 6,420 964 5,091,618
Mast Mower & Service
Meridian Bank
National Bank of Boyertown
On-Line Computer
Peters Bro's Meats
Reading Bone Fertilizer Co.
John Shaeffer
Shillington IGA
Shirley’s Lunch Counter
Stagecoach Stop Restaurant
Paul Stoudt
Truckco, Inc.
Dennis Wagner
Walter Dunlap, Inc.
Yellow House Hotel
Ralph Zettiemoyer
you need to look for other ways of
making a living for yourself and
your family. If the answer is
“yes’*, proceed with the other
management steps. Goal setting,
the second step in the management
cycle, will be the topic of our next
installment in this series. In the
meantime, may you enjoy many
good thoughts about your future
management of the farm business.
(Continued Next Week)
The following chart outlines
state and national participation in
the program for the three signup
periods held in 1986, the first year
for program signup. The first two
signups were for 1986 crops, while
the third accepted cropland for the
1987 year.
The bid amounts accepted for
Pennsylvania were $65 for pool 1
(southeastern Pennsylvania) and
$6O for pool 2.
PENNSYLVANIA
Acres Acres
Thanks
Number
farms
accepted
93
255
202
Number
(arms
accepted
10,307
22,863
35,965