To Increase Profitability Vegetable Growers Learn How to Analyze Records and Make Informed Decisions

Name:                                 
Craig A. Chase, Farm & Ag. Business Management Field Specialist

POW Number & Title:
128-Alternative enterprises and value added agriculture

Fiscal Year Submitted:
2011

Title:
To Increase Profitability Vegetable Growers Learn How to Analyze Records and Make Informed Decisions

Issue:   Interest is increasing in Iowa vegetable production, which is a low volume, high profit margin business venture. Profit margins, however, vary a great deal among producers based on what produce is grown (i.e., product mix), what market outlets are chosen (and prices received), and what production practices are implemented. The problem for producers is two-fold. First, these decisions can be made accurately only if production and marketing records are kept.  Second, many producers don’t understand how to interpret financial information so they can make decisions based on their own records.

Response:
A pilot workshop was developed and delivered in February 2011 to teach participants: (1) the components of a net worth statement and income statement, (2) how to compare their financial statements to others (i.e., benchmarking), (3) how to develop enterprise budgets and analyze those budgets for each type of enterprise within their farming operation, and (4) how to develop partial budgets and analyze them to make investment, marketing outlet, product mix, or other business decisions.

Impact:
A pre- and post-test was implemented to determine what was learned as a result of the workshop.  All participants gained knowledge on determining what their financial strengths and weaknesses are, what changes they could make to be more profitable, how to price their products better, how to evaluate marketing outlets, and how to make better investment decisions.  Participants benefited by learning about decision tools (enterprise and partial budgets), as well as understanding financial vocabulary (what is depreciation), and how to interpret financial statements.
ISU Extension is looking at the profitability of small scale vegetable production. With added information, existing and potential commodity producers can make informed decisions on how to make their business more profitable.  If interested in learning more about economics of vegetable production, contact Craig Chase at 319-238-2997 or (cchase@iastate.edu).


2011
128-Alternative enterprises and value added agriculture 

Page last updated: June 19, 2011
Page maintained by Julie Honeick, jhoneick@iastate.edu