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Ask a Margins Expert

RSS By: Chris Barron

Chris BarronHave a margins question? Through this blog, you will gain insight into improving your bottom line, as a margins expert answers questions and provides farm business advice.


Your Harvest Scoreboard

Sep 12, 2011


With football and harvest season both under way, it’s a great time to draw a comparison between football and crop production. In football and crop production alike, we develop a game plan, run our offensive and defensive plays, and focus on the "Big Win."
Just as the football game has four quarters, crop production can be viewed much the same. For example, in the crop production first quarter (January – March), we develop our offensive strategies around equipment, agronomics, risk management and marketing.
Second quarter (April – June): We continue our offensive gains. Planting and crop protection are the top priorities during second-quarter play. Unfortunately, many of us this year played a lot of defense against a formidable opponent known as the weather! Thankfully, by the end of June most of us got the needed turnovers of better weather so we could continue our offensive march down the field.
Third quarter (July – September): Again we find ourselves dealing with additional turnovers. Weather events such as too wet, too dry, excessive heat, severe hail and windstorms. During the same time, marketing opportunities continue to improve, creating a different complexion for the game. With pricing opportunities reaching record levels, we are faced with the question of how aggressively to play offense before harvest arrives.
Fourth quarter (October – December): Time to bring the crop to the end zone! To this point, we've managed through the ups and downs of the game and we have an opportunity for a Big Win. During this quarter, we are bringing the crop to the end zone. At the same time, we are learning our final yield information. Now we can begin to calculate what the market opportunities will allow us to post on the scoreboard. As the yields become reality, the final play will be to determine price. This year, the final pricing could be like the last touchdown pass for the Big Win.
The true question is: How big of a win do you want to finish the game?
Here is a scoreboard that you can use to calculate your operations performance. Simply enter your yield per acre, cost of production per acre and overall average selling price. Once you plug in this information, you will have a clear picture of how your scoreboard looks. Costs per acre, income per acre, yield and price are all critical numbers. But don't forget to keep your eye on the end game: your MARGIN!


 Margin Scoreboard


If you would like this working scoreboard, please send me an e-mail and I'd be happy to forward it to you.
After harvest and toward the beginning of next year, we will have many new and exciting tools to use as we try to improve our game for next year.
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