Keep complete records to increase profits

(482 words)

PINE BLUFF, Ark. – A simple accordion file, a computer spreadsheet and a new year’s resolve to keep accurate records can highlight opportunities for ranchers to increase profits, David Fernandez, Cooperative Extension Program livestock specialist at the University of Arkansas at Pine Bluff, said.

“Basic record keeping gives you valuable insights about profits and losses in your operation,” Fernandez says.  “Analyzing your records helps you fine-tune your farm’s management.”

Fernandez advises labelling tabs in an accordion file with the major categories of expenses on most livestock farms: feed, veterinary and medical expenses, fuel, equipment purchases and maintenance, facilities maintenance and construction, marketing and transportation, loan payments, pasture lease costs and labor. Each time you pay for something, place the receipt in the proper file.

An electronic spreadsheet can ensure convenient access to expenses and profits. In the spreadsheet, create columns for each of the major expense categories. With each expense, update the spreadsheet by entering the amount. Include a column that contains the date of the purchase to see when expenses occur and to keep a running total of your expenses month-to-month.

Fernandez reminds ranchers to keep track of sales receipts in the file and spreadsheet. When animals are sold, keep track of whether they were culled breeding animals or young-of-year. There is a different tax rate for capital gains or losses on cull animals than regular income tax from sales of offspring.

“The records you keep over the months reveal the true costs of things such as operating a tractor or truck, buying feed or paying veterinary bills,” Fernandez said.

“Once you know what you are earning and spending, you can compare yourself to the rest of the state,” he said. 

The USDA Census of Agriculture provides a breakdown of farm expenses on a state-by-state basis, available online at http://www.agcensus.usda.gov/Publications/2012/Full_Report/Volume_1,_Chapter_1_State_Level/.

If your costs are out of line with other farms of your type and size, you should analyze the problem, Fernandez says. Higher than average bills in a category may indicate an opportunity to reduce costs and increase profits.

“Many times when I talk to livestock producers about the importance of keeping accurate and complete records they tell me they have to be out working instead,” Fernandez says. “But it is important for livestock producers to realize that the work they do in the farm office is just as important as what they do in their fields.”

For information on record keeping or livestock production, contact Dr. Fernandez at (870) 575-7214 or fernandezd@uapb.edu.

The Arkansas Cooperative Extension Program offers its programs to all eligible persons regardless of race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.

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