| | Why Would I Do an AgriProfit$ Analysis on My Business?
This is the time of year when your AgriProfit$ team is busily preparing for the upcoming program season. We’re enlisting new and returning producers, and organizing for the on-farm interviews to collect the information that will be processed into business analysis reports for each. Our more experienced AgriProfit$ participants are familiar with the “how’s and why’s” of using the management information in their reports, but we spend a fair amount of time with newer folks addressing the question of “what’s in it for me?”
What’s in it for producers?
While participation in the AgriProfit$ program is free-of-charge, it does require an investment in time from producers. As it is essential for AgriProfit$ participants to see direct value in return for their time, each receive:
- a detailed economic analysis of farm enterprises of their choosing, driving at unit production costs and returns for their commodities,
- a “whole farm” analysis, revealing financial performance, strengths and weaknesses,
- benchmark analysis, laying out their own productive, economic and financial progress over time, as well as comparisons to “peers”.
- newsletters, bulletins and analysis tools, based on standardized AgriProfit$ information.
Participants are in the position to measure performance, and take active management control.
How can AgriProfit$ help producers?
The link between AgriProfit$ and farm business success can be summed up by two phrases:
| 1. | “You Can’t Manage What You Don’t Measure!”
To reduce unit costs and improve profitability, the first logical step is to measure the “current position”. A basic business analysis, including key enterprises and a roll-up to the farm financial position, is a starting point. Your analysis and budgets are based on your farm. Each year of analysis adds another dimension in measurement, showing progress, opportunity for change, and/or potential areas of strength and weakness. |
| 2. | “Who’s in Control of this Business, Anyhow?”
For all intents-and-purposes, without a business analysis a farm directs itself. Knowledge of unit production costs and financial performance helps producers focus, strategically, on necessary short and long term choices and changes. It provides a basis to measure success, and how each choice improves farm profits, with acceptable risks. The manager is now in control. |
How is my information used?
The confidentiality of individual producer information is paramount. In addition to business analyses for participants, pooled producer information is used in benchmarking, applied analysis, and decision tool support. The focus is on creating “knowledge nuggets” and decision aids based on real farm information.
Doesn’t my accountant do this?
Although you may get similar farm level information from your accountant, it:
- often masks things you could do to manage for profit within your operation.
- doesn’t deliver unit costs of production.
- is typically not comparable to broad-based industry economic benchmarks and analysis.
These differences may seem small but can make a big difference in how effective you can be in using your own “on-farm facts”.
Does AgriProfit$ have local partners?
AgriProfit$ staff work closely with local forage and applied research associations, adding value to local trials and demos, and bringing the economics and business management messages home.
Home Stretch
An AgriProfit$ business analysis is designed to measure so producers can manage. The focus is to deliver information and critical thinking so farm managers can control their business future. If you would like to sign up to AgriProfit$, or have questions, don’t hesitate to contact me by phone (toll-free using the 310-0000 line), or by e-mail.
Prepared by:
Dale A. Kaliel
Sr. Economist: Production Economics
Phone: (780) 427-5390
Fax: (780) 427-5220
dale.kaliel@gov.ab.ca |
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