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.