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Record-Keeping Deters Financial Stress

Record-Keeping Deters Financial Stress

Record-Keeping Deters Financial Stress

"Good farm records, and timely analysis of those records, is important." John Anderson, UK Agricultural Economist


As another year comes to a close, it is a good time for beef producers to start thinking about what kinds of changes they need to make in their record-keeping systems. For many folks, an appropriate action is to begin keeping records for the first time.

"Good farm records, and timely analysis of those records, is important," John Anderson, agricultural economist for the University of Kentucky College of Agriculture, said. "Without them, it is virtually impossible to identify areas in the operation where improvements need to be made."

Good records allow a producer to set priorities. Very few producers have enough resources to make every improvement they'd like in their beef operations. However, a good record-keeping system can help the producer see where the possible investments will have the largest return. Beef producers need to be concerned about two types of records – production and financial. Production records cover things like conception rate, weaning weights, and death loss. Financial records measure costs and returns associated with beef production.

"Both types of records are important," Anderson said." Focusing exclusively on production or financial can be misleading." Anderson gave the following example. Increasing a farm's average weaning weight may cost more than the value of the additional pounds of weight. Without good financial records, it will be impossible to know that. Likewise, cutting $10 per head off of production costs may reduce productivity to the point where returns are reduced by $15 per head. Good production records will identify where a problem has occurred. The point is that neither maximum production nor least-cost production are necessarily the same as optimal production.

Keeping adequate production and financial records does not have to be complicated. Even basic, record-keeping systems can provide a lot of good and useful information. For production records, good herd record books area available from a number of sources. For financial records, the Kentucky Farm Record Book has been around for many years and is still a simple, effective format for keeping up with a farm operation's cash costs.

"Record-keeping is like anything else," Anderson said. "The more you put into it, the more you get out of it."

Producers interested in getting a more detailed look at the performance of their operation may want to consider a Standardized Performance Analysis record keeping system. An SPA integrates production and financial measures of performance and takes both cash and non-cash costs into account. These SPA programs provide useful information for guiding management decisions.

For more information, contact your local county Extension office.

Contact Information

Scovell Hall Lexington, KY 40546-0064