Lake Erie Grape Farm Cost Study
(LEGFCS) Using Tax-based
Records For Cost of Production
Barry Shaffer
Lake Erie Regional Grape Program
Cornell Cooperative Extension
Fredonia NY
bes9@cornell.edu
LEGFCS Genesis
In 1993, we assembled a committee to design a
simple form to get the most information with
skimpy financial records.
 Most Lake Erie Grape Belt Growers are now
specialized grape growers.
 Very little in the way of inventories
 Cooperative members would likely have large
accounts receivable. Cash market growers would
likely have low to no accounts receivable.

Lake Erie Grape Farm Cost Study
(LEGFCS) started for the 1991 tax year.
The committee decided to use farms that
had a minimum of 85% of crop receipts
from grapes. This probably eliminated no
more than 20% of the grape farms in the
Lake Erie Region.
 We erred on the side of getting a larger
sample size instead of more detail on
fewer farms and based much of the
information from Schedule F’s.

LEGFCS Guidelines

We also gathered production information
such as:
 Bearing
acreage
 Business organizational type (mainly sole
proprietors, a few corporations, and very few
partnerships)
 Yields (tons per acre farm wide)
 How many operations were using Sec. 179
expensing
 Nitrogen rates (starting in 2006)
LEGFCS Process
I developed a simple 5-page worksheet to
gather the data.
 Normally make farm visits for data collection
after taxes are done (push to finish most in
March and April)
 Compile the averages and then prepare
individual farm analyses for LEGFCS cooperators.
Then sit down again with cooperators usually
starting in July to go over the results.

LEGFCS Software
Originally I had the records on MS Excel.
 After 2 or 3 years, I transferred over to
Filemaker Pro. This was a good database
to use because I used Macs up until 1998
and then switched to PC’s. I was able to
transfer to the PC with no problems with
Filemaker Pro files.
 The individual farm analyses include
graphs from MS Excel spreadsheets.

Cost of Production Benchmarks
The information received allows us to
establish benchmarks for American grape
production for NY, PA,OH, and MI.
 We use the information in

 Newsletters
 Informal
meetings
 Conferences
 Publications
Information Example
Average Annual Costs, by Category, 2001-2005
43
Fertilizer
Taxes
68
Insurance
78
Supplies
78
100
Repairs
Interest
114
Operator labor
116
Chemicals
117
Depreciation
213
Other costs
356
Paid labor
380
0
50
100
150
200
$ per acre
250
300
350
400
LEGFCS Limitations

Missing Net Worth
I
have an idea where net worth is trending
but no definitive numbers.
 Liabilities and debt restructuring aren’t
captured directly.

Tax Depreciation
Where Could Tax-based Cost of
Production Studies Fit?

Farms with little or no ending inventories.
 Some
vegetable growers
 Farm stands
 Some fruit farms
 Some greenhouse operations
 Industries with spotty financial records
 Others?
Tax-based Farm Records
Better to get half a loaf than nothing at
all.
 Multiple year averages help to give a more
complete picture.
 Cost of production can help growers of all
sizes to help evaluate their operations.
 Easier data collection!
