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Profit manager expands tool kit

Chris Barron needed a better
handle on pinpointing his costs and maximizing profits.

Barron, who farms near
Rowley, Iowa, knew that managing costs was a key factor in achieving profits.

“I was looking for a simple
tool to understand the specific costs in our crop enterprises,” he says.

In 1991, with help from his
friend, Shad Decker, he created a farm management software that he and his
brother-in-law, Rick Matthiesen, used in their operation over the next several
years.

In 1998, he began selling
his software that featured 10 separate tools, which he called Profit Manager.
Three years ago, he completed a significant upgrade.

One new feature is a crop
insurance calculator based on total cost of production per acre or per bushel,
expected spring input prices, and yield guarantee.

“It helps determine the
level of crop insurance applicable for your specific situation,” Barron says.

He also provided a more
precise tool to calculate the percentage of expense for each line item. “You
can see what percentage of your total expenses goes for anhydrous,” he says.
“Or you can break out your land or machinery costs.”

The market tracking report
is useful for determining the trigger price needed for a profit. “You can track
profit and look at the break-even sales price at each yield level,” Barron
says.

Steve Van Voorhis began
using Profit Manager last summer. “I started making 2011 sales in early
September,” he says. “It’s easy to use, and it helps forecast what you need and
what you have to do to get where you want to go. At the end of the year, you
see the average price of all bushels you sold.”

The Henrietta, New York,
corn, soybean, and wheat farmer has plugged in his 2010 data and is using it to
build his 2011 costs of production. “I like the linkage between marketing
levels and anticipated revenue and expenses,” he says.

Barron adds, “Knowing your
costs of production is extremely important. It allows you to make better
marketing decisions when the opportunity arises.”

Want to know if you have
enough acres to justify a new planter? You enter your acres and find out where
you stand in terms of cost per acre. Or, you can find out if hiring custom work
would be more cost effective than adding machinery. You also can compare fields
and analyze which farms are the most profitable.

The program, which operates
on Microsoft Excel, factors in principal, interest, repairs, and depreciation.
It offers good documentation for a line of credit.

Like any record keeping
system, Barron says entering exact numbers determines the accuracy of the
information output.

Barron uses Profit Manager
in his work with Russell Consulting Group clients to help evaluate whether a
partnership model is the right vehicle for controlled growth.

Profit Manager sells for
$295. Call Barron at 319/533-5703 or e-mail him at cbarron@cb-farms.com.

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