Computer program tracks expenses Questions and uncertainty about weather, commodity prices, marketing options and regulatory restrictions loom in the minds of peanut producers throughout the year. Growers also face the battle of obtaining additional funds from lenders if they do not have a solid grasp on their production costs.
One survival kit for helping farmers determine the actual cost of production and assessing the performance of a commodity is a new management cost tracking system, FARMCATS. The system - Field and Resource Management Cost Accounting Tracking System - helps farmers know the specific cause of a loss in money or quality along with which production practices work better than others, explains Audrey Luke-Morgan, research coordinator with the National Center for Peanut Competitiveness.
The development of FARMCATS is a tri-state effort which began in Levy County, Fla. Anthony Drew, Extension director in Levy County, developed a program called REALNUT, to assist farmers in his county with record keeping. Drew worked with Luke-Morgan in 1999 to transfer the REALNUT program to Microsoft Excel and make other changes. The result is FARMCATS, which was released to growers for the first time in May 2000 for the 2000 peanut crop year.
During the first trial year of the FARMCATS program, much of the feedback was not what was expected. Many farmers stated they didn't have time to work the program, or that they received the program too late in the season. However, all of the growers who received the program in 2000 want to try it again for this year's crop.
The system employs Microsoft Excel and Visual Basic to provide a user-friendly format with a series of "buttons" for easy navigation and implementation, explains Luke-Morgan. Within the software, cells are protected so that a farmer can place information only in green highlighted cells.
The benefit to using an accounting software program, says Luke-Morgan, is simply allowing farmers to see the bottom line. "The program tracks all costs from pre-production to marketing. This makes it easy for farmers to make an analysis of their farming operation," she says.
FARMCATS is broken down into five steps. The first step deals with general information pertaining to a specific enterprise such as field names, acres, rent cost per acre, quota peanut pounds and irrigation access. Step two allows producers to enter input prices for seed, nutrients, pesticides, miscellaneous operating expenses and machinery and irrigation equipment and fixed and variable costs.
The third step in FARMCATS is where the actual production of a commodity is tracked, and it is one of the most intensive steps, says Luke-Morgan. Components in this step allow farmers to keep track of every trip they make in a field with equipment and irrigation, she says. This step also provides an excellent record of all pesticide and water application, information that will be helpful as environmental issues continue to develop, she stresses.
"FARMCATS will be very beneficial to producers in the Flint River Basin as an aid to quantify their water usage by field and to help producers respond more easily to state agencies," says Luke-Morgan.
Another component in step three tracks the marketing of the commodity. For example, whenever peanuts are sold, a standard inspection certificate and sales memorandum (FSA form 1007) is issued. FARMCATS allows the producer to input all of the information from this form and track not only the revenue generated but also quality aspects of the crop.
A further goal of the 2001 version is to link FARMCATS with the electronic grade sheet and 1007 at buying points, which currently is being developed by USDA. This would allow producers to receive a file containing all their data and to simply download it to FARMCATS without having to manually input the information, notes Luke-Morgan.
The fourth step of FARMCATS allows producers to input additional or miscellaneous income from sources other than the sale of the commodity. Examples include crop insurance indemnities, disaster transfer payments, loan deficiency payments or other income.
The final step, says Luke-Morgan, provides summary information for the farmer. An income statement is provided on both an individual field basis and an enterprise basis. A field-by-field summary with production information and financial data is provided along with a summary for irrigated versus non-irrigated fields within the enterprise.
In Levy County, peanut growers gave a nod of approval to FARMCATS. The program was received favorably, says Drew. Of course, he adds, programs like this are similar to building a house - there's always something that you want to change.
Drew stresses the importance of one-on-one instruction, at least initially, with any type of farm management software.
"Farmers should be using some type of record keeping to provide the information needed to do an analysis and look at how he should better manage his operation. When a farmer keeps these types of records, he can keep up with the costs and returns of all cultural practices," says Drew.
The most difficult part, he adds, is getting people to use the program. All bookkeeping is painful, he says.
"Records are not worth anything unless you're using them in the management of your farming operation. Management is an ongoing grading process on the farm. Something that works now may not work in five years," says Drew.
Since the initial release of the program in 2000, several changes have been made, says Luke-Morgan. The 2001 version allows farmers to keep records on other crops, including corn, wheat, soybeans and cotton. Farmers can track three fields for each of these commodities and 11 fields for peanuts.
"The software is ready to use for the 2001 crop year. Now, we need farmers who are willing to use the program and provide us with feedback on what does and does not work."
Farmers interested in trying the program for the 2001 crop year should contact their county Extension agent.