Balance Sheet

This webpage is the financial archives of the Women In Agriculture webinars.

Chapter 2: Economic assessment and risk management is part of the online publication "From Surviving to Thriving: Strategies for Urban Farm Success. Most of the work of a farm is in producing and marketing crops and livestock. But will this effort be economically viable? And what are the economic risks? These are questions that all farm businesses must answer regardless of whether they are for-profit or not-for-profit. To stay in business, the farm must be economically sustainable. To measure economic viability, this chapter will focus on two economic measurements – profit and cash flow.

Introduction Financial and economic considerations such as limited capital, untimely cash flow, insufficient labor, small acreage or other reasons require farmers to hire custom service for field operations. Custom work charges are determined by demand and supply and are negotiated between farmers and custom operators. The purpose of this publication is to provide information on custom work charges in Maryland and to provide data to assist in decision-making regarding purchasing equipment.

These are difficult days for dairy farmers. After the high milk prices of 2014, prices have plummeted with no significant upturn in sight. Large dairies across the country have captured economies of scale that turn a profit at these low prices. So as small dairies go out of business, the large dairies continue to expand, maintaining the supply that suppresses the prices.

What price are you getting per cwt of milk? Like most dairy farmers, you know the price or you can get it quickly by reviewing milk check receipts. How much does it cost you to produce a cwt of milk? Like many dairy farmers, you may not know. Dairy farming is complex, and determining your costs of production is sometimes difficult. Yet, your costs directly affect your profit, and it is important to understand them.