number crunching
I’ve created a monster. I showed Matt how to use Excel, and now he won’t stop!
It used to be, say prior to the 1980’s, that a person could raise a handful of feeder calves or hogs and pretty much figure on making a profit. And that’s the assumption we carried when we bought our first 4 bottle calves. And when we bought the next group of calves, and then the cows, and then the hogs.
But farming has changed. (This past year more than ever, but that’s another post for another day.) You can no longer assume a profit. And in the interest of giving you a real life look at our farm, I have to say that we’ve never made a profit on the farm as a whole (let alone a living.) We might make a profit on one enterprise or another but when you factor in all of the indirect costs, the farm as a whole has been operating at a loss. Obviously that cannot continue indefinitely.
It’s been 3 or 4 years since we started looking at this farm as a business and not just a hobby, and still budgeting and indirect costs and cash flow projections are a struggle. This time of year we’re looking at our numbers for 2007, trying to learn the lessons the numbers are trying to teach us, and project our numbers for 2008. With all of the volatility in agriculture the last year or two it’s become a daunting task.
Especially difficult is trying to set prices. I feel bad every time we have to raise them. I feel such a personal connection with each of our customers. I want to provide them and their families with tasty, safe food. I know how it is trying to keep to a grocery budget these days. But if we can’t get what we need to get to make at least a small profit, then we won’t be here next year.
So what’s going on here on the farm these days is a lot of time spent with the laptop and Excel spreadsheets. The numbers for 2007 are definitely teaching us something. I’ll share more about that as the year goes on.
2 years ago:
Happy 2006!
1 year ago:
Happy 2007
I think you’re doing the right thing by sharing this challenge with your clients. It keeps everybody on the same page, and adds value to your food. There is genuine struggle in raising tasty healthy food. If clients wanted cheap, easy food, they’d pay BigAgri to fill a confinement operation full of animals, taxpayer-subsidized grain, manure, and immigrant labor.
What they said! I have pretty good access to safe and great tasting food. Produce and meat, but it does take time and energy to find it. When we do find it we try to stick with the same farms, given that we have had a good experience. This way we know we are helping to support the farm, but also small farms in a whole. So, even when they have to raise their prices we are good with it because we know they have to make a living. And if they werent around then we wouldnt get all the good food.
haymaker & frugalmom – thanks for the encouraging words. 2008 looks to be our most challenging yet, and I intend to share those challenges as we experience them. Of course it’s more fun to paint idyllic pictures of farm life. There are plenty of those here, too, and I’ll continue to share them as well.