1. Home
2. Conferences
3. 2011 Extension Risk Management Education National Conference

How Tim and Susan of ABC Apple Farms Used AgTools™ to Analyze Financial Alternatives for Long-Term Success

Clark Seavert

Summary

Agribusiness enterprises such as cereal grains, row-crop, and specialty crop farms, cow-calf operations, or vegetable and fruit processors often make large up-front investments in establishing cropping systems, acquiring livestock, purchasing equipment, buildings or new technologies in hopes of making a reasonable return on their investment. Misjudging the costs and potential returns of such investments can result in serious financial difficulty. However, adequate compensation can come to those who have the information, develop strategies, and perform sensitivity analyses before implementing a decision. The AgTools? website hosts a suite of software programs with the aim of helping agribusiness enterprises manage financial risks. AgTools™ uses enterprise budgets as the basis to estimate machinery, building, labor, and input costs and total yield or returns for calculating returns for crops with multiple establishment and production years, livestock enterprises, or implementing technologies to gain efficiencies. Return and input cost items can be inflated over time to analyze the net present value, internal rate of return, and financial feasibility of planting cropping systems, marketing strategies for livestock enterprises, or implementing technologies. Currently three programs are available to U.S. agribusinesses – AgProfit™, AgLease™, AgFinance™, and AgPlan™.

AgProfit™ is designed to help agribusiness enterprises make short, medium, and long-run investment decisions. AgLease™ is designed to assist growers and landowners establish equitable crop share or cash rent lease agreements. AgFinance™ is designed to assist agricultural producers make long-run decisions on a whole farm/ranch basis.

Details

---