Alabama A&M University
S M A L L FA R M S R E S E A R C H C E N T E R
FA C T S H E E T
COLLEGE OF
AGRICULTURAL, LIFE
AND NATURAL SCIENCES
United States Department of Agriculture
Office of Advocacy and Outreach (OAO)
Financial Records and Farm Business Management
Keep accurate and current financial records and use them to understand your farm’s
financial position. Understanding your farm financial position and past income statements
will enable you to make the best management decisions and improve working relations
with your lender. Consult with Alabama A&M University’s Small Farmers Outreach and
Technical Assistance Program or the Alabama Cooperative Extension
Program personnel who can assist you in developing a financial snap shot of your farm business.
Evaluate risk management tools. How much risk can
you afford? Understanding your farm financial position
will help you understand your risk position. Risk
management tools such as crop revenue coverage, multiple peril crop insurance and various marketing strategies
will help you transfer some of your production and price
risk to others.
Develop projected income statements and cash flows to
help you write a financial plan. Use your monthly
accounting records to monitor how closely you are able to
follow the plan. Good financial records can do a lot more
for your farm business than just help you prepare your
taxes at the end of the financial year.
Certify all your crop acreage with the U.S. Department
of Agriculture’s Farm Service Agency. You will not be
eligible for some of their programs unless you certify. Also
make sure you thoroughly understand the government
programs such as the Loan Deficiency Payment so that you
can realize the maximum benefit.
Develop a marketing plan and follow it. Almost 70
percent of the grain is sold at the bottom 30 percent of
prices. Calculate your actual cost for producing each commodity. Look for outside help if necessary. The Small
Farmers Outreach and Technical Assistance Program at
Alabama A&M University is always available to provide
such assistance for free.
Small Farms Research
Center
Alabama A&M University
4900 Meridian Street
James I. Dawson Building
RM #219
P.O. Box 700
Normal, AL 35762
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Compare past records to the present and look for progress in the business.
Examine areas where costs have risen and consider how they could be lowered.
Compare volume of product and cost of production.
Look at level of debt repayment.
Is financing required?
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What is your most cost efficient crop or livestock enterprise?
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Where have problems occurred in the past and where will they likely occur in the future?
This is what planning is all about, reviewing past performance and using the knowledge gained to make future endeavors easier and more successful. All of this analysis and more can be obtained with proper record keeping, but it
has to start with accurate and up to date records. Record keeping is but one step in successful farm management. If
you feel that your present system is not able to cover the areas listed above then take the step to expand and improve upon it.
Small Farms Research Center, Alabama A&M University
4900 Meridian Street
James I. Dawson Building, Room 219
Normal, AL
35762
Small Farms Research Center Background. The Small Farms Research
Center was developed to assist small farmers with limited resources in Alabama’s underserved communities. The center was first developed in 2000 to
assist minorities, especially women, African Americans and underserved individuals improve their farm management practices, given ones condition and
resources. The mission of the Center and the Small Farmers Outreach program
is to assist all small and limited resources farms effectively deal with risk management and food safety issues and provide them with informational sessions.
The Center has also expanded its outreach efforts to meet the needs of entrepreneurs and businessman. The center is located at Alabama A&M University
in the Dawson Building. The center specializes in following areas
Marketing and Business Plans
-Record keeping and Loan Application
-Identify alternative enterprises
-Personal Management
-Legal Issues
-Finances
-International Business and Procurement
-Accounting Issues
-Taxes
-Business Development
-Conducting seminars on Government programs and other issues
For more information about us give us a call at (256) 372-4970 and 1-866858-4970.
Website: www.aamu.edu/smallfarmers
Cooperating Units: USDA Office of Advocacy and Outreach (OAO), USDA/NIFA/ Beginning Farmers and Ranchers
Development Program (BFRDP), USDA/OAO/Outreach Assistance for Socially Disadvantaged Farmers and
Ranchers (OASDFR) Program, Alabama Cooperative Extension Systems, and Alabama A&M University.
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