Record keeping for successful decision making
Documenting experience to separate facts from dreams, feelings and intentions puts market farming on track for survival.

By Andy King

Successful market farmers have a comprehensive approach to record keeping. These farmers—the ones who were able to see the relationship between those detailed records and their total operation—were more profitable.

August 10, 2006: Experience is a good teacher only if you are willing to learn from it.

During the past few years I have seen a number of market farmers go out of business. When I asked them what happened, a common answer is “I just can’t make enough money.” Because we need each other to succeed to keep farming alive in this part of the country, I care about these people who now believe they can’t have a future in farming.

I suggest that how we go about farming in this intensive marketing environment makes a big difference as to whether we have a future here in agriculture that fits in a metro-farming situation. There are hundreds of thousands of people within an hour’s drive and they all eat. Some of them want to eat fresh food grown locally and have the income to pay for it.

So what has been one of the most common differences between successful market farmers and those who were failing?

When I look around, I see that successful market farmers have a comprehensive approach to record keeping. They have records on harvest, markets, prices received, seed/transplants, fertilizer/soil amendments, crop rotation, sales, expenses, equipment and labor. These farmers—the ones who were able to see the relationship between those detailed records and their total operation—were more profitable.

Your harvest records will help you predict when an item will be available in the crop year and how much you will have for market, based on when you plant and other insights you can glean from your records: the variety planted, when you planted it, as well as rainfall, temperature and other growing conditions early in the season.

Your weekly yields of any crop will change during the season. Good records—kept faithfully over a period of years on your farm—help you plan which early, midseason and late season crops to plant. If you use your harvest records in this way, you should be able to have an adequate quantity and variety of items at your stand each week.

Prices you can thrive with

How can you set your prices at a profitable level when you do not know what your products cost? Keeping a record of everything you paid for is just not good enough.

Since your cost is based on the number of units you sell—not the number of units you grow—you will not know your actual cost until the end of the season. Don’t let your biggest seller be your biggest loser.

To estimate a product’s cost, assign a percent of all appropriate expenses to that product then divide by the number of units you sold last year. Since your cost is based on the number of units you sell—not the number of units you grow—you will not know your actual cost until the end of the season.

Don’t let your biggest seller be your biggest loser.

What is the number of markets you need to maximize your profits? Market records help you determine which ones to drop and which ones to keep. Weekly sales records should tell you how much of any given product you sold throughout the season. Comparing harvest amounts with the total sales in all venues, you can test your predictions and determine how much of the harvest actually makes it through grading and packing to market.

The real value isn’t just in having numbers on a page. It’s taking time to learn what they are telling you by looking at several streams of figures at the points where they intersect. For example, it’s the combination of seasonal harvest data and weekly sales records that tell you the number of markets you can handle.

Avoiding hard choices brings hard times

To stay in business you must grow the right products in the right quantities. If you can’t sell a product for a profit, don’t grow it! Growing too much or too little of any crop has an effect on its profitability. So how do you know which crops are the most profitable and how much of each crop to grow?

If you can’t sell a product for a profit, don’t grow it! Growing too much or too little of any crop has an effect on its profitability.

Good sales records tell how much you sold and how often you sold out of an item. Your receipts minus expenses tell you just how profitable a product is. A product’s harvest record, minus its sales records, tells if that product has been over-produced. Your pricing records for that over-produced crop will let you examine if there’s profit in a lower level of production, or if the profit just isn’t there given production costs balanced with market demand.

It takes time, but if you use your expense, sales and harvest records in this way, you will know which items to drop and have a good idea of how much of each of the other crops you should grow.

Once you decide which crops and how much of each to grow for the year, other records help you to decide where to grow them. Your crop rotation records tell you which fields are best to use for each crop. The harvest records tell you the yield you can expect for a crop at a particular location, given the same conditions as the records report.

Good transplant records tell you seed sources, germination rates, the best dates to plant, and the percent of transplants that will survive for each crop. This critical information allows you to grow the right number of plants and to have them ready for transplanting at the best possible time. Backing up from the planting date you can make sure you have seeds, planting media and planting supplies in hand on time.

Harvest data shows what works

Your harvest records will tell you the season’s yields for each crop. To develop a fuller picture of your season’s crop management success, however, you need to consult your planting and field records to know what fertilizers/soil amendments you used.

Each year you should have one or more soil tests done for each field. This will allow you to track trends in soil health and soil nutrients, both influenced by cover crops and cash crops. When you get the results of your soil test, you can add manure or compost plus the appropriate soil amendments or chemicals to maximize its yield for the current season. Record the rates, materials, times and method of application.

For careful assessment, after adding the soil materials you should have the field retested after the amendments have had sufficient time to become biologically active. If a field is not in line with where you wanted it to be, you will know which amendments to add. It is important to know if your crop yield increased based on the soil amendments that were added. After reviewing your harvest records, if the crop yield is as good as or better than in the past, you’re on the right track. If the yield of a crop has fallen from what it should be given the year’s conditions, you need to rethink both the amendments (the choice of material, the quantity used and its interaction with other management steps) and your cropping system for the field.

Tracking the tractor, your time

Imagine it’s next spring and your fields are perfect to turn over. You go to fire up your tractor (or tiller) and it just won’t start. An early winter maintenance check lets you make sure to tend to each maintenance and repair task when it’s completed, then write it down.

If your plans are not based on facts, what chance do they have to really succeed?

Even better, doing a Thanksgiving check will let you verify that you’ve finished the steps to winterize your equipment that’s in working order. Having a maintenance schedule that tracks both calendar days and hours-logged tells you when to have to take a little time for upkeep (with the parts and supplies you need) to reduce emergency down time that is almost always more painful and costly.

The prices you charge—based on the markets that are best and the field experience of record—are also dependent on you doing your job in the course of the season. If the yield of a profitable crop decreased because you did not have time to weed, how will you find the time next year? To manage your time properly you need to be able to analyze how your time has been spent. Use whatever system you want, but you have to be honest with yourself about your time.

Even if you are the only person working your farm, you must assign a percent of the time spent on every job to the appropriate product. If a product is profitable enough, you may bring on additional labor. When a low-profit item sucks up a disproportionate amount of your time, you may have to drop it. Just as your expenses and sales records show if a product is profitable, your sales, expense and labor records will show if you are using your time in the most profitable way.

To make the difficult decision of when to hire more labor, your records give you the foundation for the needed estimates of costing out greater production for greater sales to see if—even on paper—you will have greater profit. You’ll need to be looking beyond your own experience to estimate if the markets you are attending have the potential to absorb a higher volume of goods from your farm at the same profit level. Perhaps the market’s overall records or some general volume history from other farmers at the market can help you out.

Here’s my basic message, as a longtime businessman who has graduated to market farming: If your plans are not based on facts, what chance do they have to really succeed? I hope that seeing how you can use farm business records to increase your profits will encourage you to create these accounts and find new ways to farm well at a profit.

And the old saying is true: Those who fail to plan, plan to fail.