f F* Start with the big holes. Are there rented farms that produce less value than they cost? Is there Tk an enterprise that should be elimi nated? Which cow(s) are worth Rmore as hamburger than milk income above feed costs? Identify _ _ ____ | them and get rid of them to plug the MANAGE M ENT h ' , . estoc k operations, feed, * labor (including family living allowances), and interest are often the major cost items. If we exa mine each of these carefully, we can probably see if and why they are excessive, and then devise ways to bring them into line. For example, poor forage qual ity means excessive protein and grain purchases. Develop a crop management plan to get the qual ity, or take half of the grain purch ase money and buy quality forage. • Examine labor efficiency. Sometimes antiquated facilities cost us more in lost production and labor than the bank payments to finance a new unit If the operation cannot justify basic efficient facili ties, then it might be time to con sider shutting down the enteiprise. • Attention to detail. Cost cutting management involves almost every activity on the farm. Spreading manure on low-fertility fields and then reducing fertilizer purchases can save thousands. Scouting fields and only applying pesticides where problems warrant it is basic. Timing is everything— particularly when it comes to sow management for more pigs weaned or producing, harvesting, or graz ing forages. • Reduce fixed costs. Many operations are crippled by their level of lease and debt repayment obligations. Some relief might be CUTTING COSTS Roland P. Freund Farm Management Agent Penn State When the financial situation on the farm gets tight, farm managers have a number of options to consider. They might try to borrow more money, sell more product, or reduce costs. After a period of drought stress, it would appear that cutting costs could be a very effec tive way to improve the cash flow. The problem for many managers is to Imow where to cut to be most effective. On a farm visit to a very large dairy in another state recently, a group of us was being shown around the new facilities that had cost well in excess of a million dol lars. While we were on this inspec tion tour, the owner was heard to twice tell a hired hand to make sure that when he finished his task he turned the light out in that room. Either this manager already had all the big factors of cost under very tight control so that he could worry about the impact of a light bulb or two, or he was nit-picking in the wrong place. The same owner could not tell us what the avenge milk produc- DYNA TORQUE RAOUL NO RISK OFFER Buy a pair of Dyna Torqua radial* now. K, altar 90 daya from day of mounting, you ara not completely aatiafiad with the performance of theie tire*, we will remove them and replace them with new Goodyear Oyna Torque bia* P|y tiros of Ilka alze and ply rating and will credit you for the difference. 24 HOUR FLEET & ON-THE-FARM PIT STOP SERVICE When You Need On-The-Farm Tire Service In A Hurry, Juat Call Us. We Can Cut Your Downtime Down To Sizel lion of his 2,000 plus cows was, nor did he have any record of any individual cow’s performance. One poor producing cow in the herd was probably losing the busi ness as much money in a month as those few light bulbs would in 10 years! Managers need to follow a game-plan if they wish to set up an effective cost-cutting program. Some suggestions for this process include: • Know what’s happening. Take time to manage. Keep track of performance of cows, orchard blodcs, fields, and enterprises. In the good old days, the fanner could see which mule didn’t pull its weight. Today we need records to show us these things. Production and growth records, soil testing all fields systematically, and forage testing all cuts of feed are basic necessities for cost control. In addition to cash expenses, feed use by different animal groups must be traced if we are going to determine that group’s contribution to farm profits. Oncc we have this kind of infor mation, we can work out where we are dumping money down “rat holes.” Get the big picture as simp ly and accurately as passible. It should not be necessary to track every last gallon of gas, hour of Size 11.2-24 18.4-26 11.2-28 12.4-28 16.9-28 15.5-38 WE SHIP FREE FARM FRONTS & SKID STEER TIRES UPS labor, or pint of spray to identify major “rat holes .” DYNA-TORQUE II Dyna Torque TT Dyna Torque IT Dyna Torque TT Dyna Torque TT Dyna Torque TT Dyna Torque TT flißLebzelter&son HELD tk FLEET CENTER ROUTE 283 & RHEEMS EXIT 1-800-932-399 r *-367-6777 (For Pennsylvania or Maryland) The hard-working hard-pulling rear tractor tire Tread design may vary Ply pined by refinancing to lock in today’s low interest rates. But when debts have to be refinanced again and again, to pay for a drought or the equivalent of a dead horse, then no progress is made in paying principle. Under such conditions it becomes necessary to sell off capi tal assets such as land and machin ery to reduce the fixed costs to a level which the operation can carry, • Use available tools. In this process, it is necessary to a lot of Md. Certifies First Organic Retailer ANNAPOLIS, Md. Mary land Secretary of Agriculture Wayne A. Cawley, Jr. announced that the state has certified its first organic retailer B. Gordon’s Market at 11550 Rockville Pike, Rockville, Md. Located just north of White Flint Mall at the intersection of Nicholson Lane and Rockville Pike, B. Gordon’s is a full-service grocery store. Maryland regulations require that Maryland Certified Organic produce be sold only by the grower or a certified retailer. This is to ensure that the produce is handled properly from the field to the con sumer’s hands. The retailer, like the farmer, has made a commit ment to insure that non-organic products are kept separate. Current Maryland regulations deal only with produce, although in future years, expansion into other categories is projected. B. Gordon’s carries an exten Price CALL US FOR THE FOLLOWING IN SHOP SERVICES: • PA State Inspection • Most Automotive/Light Truck Services • Total Computerized Vehicle Alignment • Complete Wheel Balancing • Trained Tire & Service Technicians $lO9 $435 $155 $176 $259 $292 MAKE YOUR MOVE TO GOODYEAR FARM TIRES Uncanw Farming, Saturday, October 12, 1991-C3 business analysis. Penn State Extension has recently added Finanx to its arsenal of Finpack programs. This enables us to do an enterprise analysis anywhere that there are some basic financial and production records. It is an excel lent tool to identify the big “rat holes.” Contact your county office and ask your farm management agent to run your numbers through the Finanx program. This should give you a good start with your cost cut ting efforts. sive selection of fresh produce overwhelmingly organic, with a few non-organic selections. They also carry dry goods, fresh meat, and fish. “We hope consumers will become more familiar to our attractive ‘MDA Certified Organ ic’ logo as more Maryland produce becomes available. We appreciate retailers’ efforts who are helping to get this new program up and going,” Cawley said. Retailers interested in the Mary land program may contact Suzie Harrison at (301) 841-5770. . a Located Behind Messick Farm Equipment
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