The Farm Business

Loon Organics took advantage of a Minnesota Department of Agriculture cost-share opportunity to take a one-on-one Farm Business Management (FBM) course offered through the Minnesota State Colleges and Universities system. The state offered the cost-share to certified organic farmers because it wanted more information on the economics of organic farming. FBM showed Adam and Laura how to evaluate their farm financially and which benchmarks are important. It also helped them improve their recordkeeping skills and set up a system for tracking income and expenses separately for each enterprise.

Although Laura and Adam use Microsoft Excel and Quickbooks for bookkeeping on a regular basis, they used FINPACK as the financial analysis tool in FBM. Laura and Adam’s use of the software provided an unexpected benefit from participation in FBM. Because most local agricultural lenders in the Midwest are familiar with FINPACK, it helped Laura and Adam’s financing process when they purchased their farm. Completion of FBM courses can also be a requirement for FSA loans and commercial agricultural lenders.

The Center for Farm Financial Management (CFFM) at the University of Minnesota provides educational programs and software tools, such as Interpreting Financial Statements and Measures, an online video workshop that helps producers understand and use the 4 major financial statements and the 21 financial measures recommended by the Farm Financial Standards Council.

In 2008 the CFFM published a report entitled Organic Farm Performance in Minnesota. It summarizes individual farm financial results for participants in the Minnesota Organic Farm Business Management Project for 2008 and provides comparisons to previous years.

CFFM works with other groups to manage FINBIN, a farm financial database that provides benchmark financial information to farm producers, educators, lenders, and other agricultural professionals.

Use the USDA Service Center Locator to find a local office with information on FSA loans.