Planes, Trains and Automobiles
My recent trip to Spokane, WA, to participate in a young producers conference was similar to the famous movie Planes, Trains and Automobiles featuring Canadian, John Candy. Each form of transportation was used in my six thousand mile trek!
How to get the most out of record-keeping systems
At the conference sponsored by Northwest Farm Credit, young producers were curious to learn how they could get more out of financial records.
First, any producer with $100,000 or more in revenue should develop accrual adjusted income statements with adjustments for inventories, payables, pre-paids and receivables. Cash basis tax records will not suffice because of the tax management games that are played to minimize taxes.
Second, if you have multiple enterprises, enterprise accounting is a must. I like Fin Pack from the University of Minnesota, which also incorporates marketing strategies in projections. Bob Craven at the university extension department is an excellent resource and a longtime professional working in this area.
Third, when examining your records, plan for shorter but more abrupt cycles. Wider swings in costs and revenues must be analyzed. I would suggest, at a minimum, use 10 percent, however, shock-test 20- and 30-percent in mapping out strategies.
Finally, know your cost of production by enterprise: that is, cash cost, total cost and total cost including profit expectations.
Pot Hole in the Road
Many of you that have children or grandchildren attending college are finding tremendous tuition increases because of state budgets. Isn’t it interesting that we continue to build new sports stadiums on campus, but cannot fund the main purpose of the university - education?
I love sports, as you all know, but we are seeing the opportunity cost!
Final Pick: B-Ball
Maryland over the Hoosiers!
Wow! U-Conn women’s team – what a delight to watch play! Virginia Tech women played them the closest – 9 points!
My e-mail address is:[email protected]
Editors' note: Dave Kohl, Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.
To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.
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