Farm management
assignment
University of Pannonia
Georgikon Faculty of Agriculture
Keszthely, Hungary
1
Conditions of Assignment
• Degree: Farm Business Management
– Students: 3rd yr BSc students (final yr)
– Subject: Business Management and Finance
Or
• Degree: General Agriculture
– Students: 4th yr (1st yr MSc)
– Subject: Agricultural Extension
• Preliminary knowledge required:
– Basic microeconomics
– Basic farming technology
2
General Description of Assignment
•
What?
– Project: collect information about a farm enterprise, estimate its profitability and give
suggestions about possible improvements
•
Resources?
– Students get basic information about a particular farm enterprise in class
– Students go to visit the farm, look around and ask the farmers about questions about
the enterprise
•
How?
– Relying on collected information assess the profitability of the farm enterprise (P&L
account, budgeting)
– Suggest possible ways of improvement (partial budgeting) – technology-related and
financial aspects
•
How to present?
– Write up an assessment in 5 pages (describe technology and financial situation)
– Prepare presentation (depends on class size…
•
•
Timing: approx hours (1 hour classroom preparation, 3hours farm visit, 2 hours
assessment, 2 hours preparing presentation/essay)
Assessment:
– Quality of data collected
– Profitability calculations and results
– Suggestions for improvement – are they correct and realistic financially and
technologically
– Quality of presentation, essay
3
SAMPLE PROJECT
• Assess the profitability of a broiler
farm in a nearby village
(Balatonkeresztúr)
• Give suggestions for improvement of
the financial situation
• In class: Student get the following
data (handout)
4
Handout
•
•
•
•
Light (automatic control system)
1st day: 24 hours lighted, then 23
hours light and 1 hour dark period
Preparation for transport at slaughter:
catching – hired labour (5 persons: 2
family, 3 hired)
Labour: mainly family labour but 3
persons hired at transportation of crop
for cleaning the chicken house
Technical data
• Number of chicken per
crop: 1000 heads – only
females
• Input: day old chicks
purchased
• Fattening period: 49 days
• Slaughter weight: 2,0
kg/chicken
• Feeding (automatic
system)
• Feeds purchased:
– starter: 0,8 kg/chicken (fed
for 1st and 2nd weeks)
– grower: 1,5 kg/chicken (fed
for 3rd and 4th weeks)
– finisher: 2,0 kg/chicken (fed
for 5th and 7th weeks)
5
Expected result
• Find out the output per crop, and also the
output per year
• Calculate the market revenue
• Find out the variable costs per crop and
for the whole year
• Calculate gross margin
• Find out the fixed costs
• Calculate profits
6
Work process
• Students prepare for farm visit (1 hour):
– List of information to ask at farm
• Farm visit – approx 3 hours spent at farm
– Collect information about technological details
– Collect info about financial details
• Homework (approx 4 hours):
–
–
–
–
Describe broiler fattening technology
Prepare Gross Margin Calculation
Prepare suggestions on improvement
Prepare essay/presentation
• Classwork: present results, discussions
• Teacher evaluates output
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Expected information to collect at
farm
Info about technology, input and output quantities
Output related info:
Sale price of chicken per kg at slaughter
Input, variable cost items:
Purchase price of day old chicks
Number of crops per year
Purchase price of feed (starter, grower, finisher)
Labour: number of days, cost per day per person
Any other variable cost item? (vet, extensionist…)
Fixed cost items and fixed costs
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Sample output/1
Description of technology:
– Tasks before purchasing day old chicks
• Cleaning chicken house, handling manure (amount, spreading, time needed,
labour needed)
• Disinfecting the chicken house (labour needed, disinfenctant needed)
• Washing feeders and drinkers (time and labour need)
• Spreading new litter (amount and price, time and labour needed)
• Preparing equipment, placing feeders and drinkers
• Heat up chicken hours (1 day before new batch arrives to 32 degrees C)
• Placing day-old chicks into chicken house (time, labour)
– Technical info about chicken house: ventilation, humidity, temperature,
heating system
– Number of crops per year: e.g. 5,5 crops = 330 workdays (49 days + 11
days cleaning)
– Feeding technology, feed conversion ratio: total feed needed per 2 kg
chichen = 4.3 kg
– Drinkers, water needed for drinking per crop
– Medication and vitamings,
– Visits by vet, visits by extension agent
– Preparation for transport, labour needed
– Losses during transport (day-old chicks, slaughter), losses during
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feeding period
Sample output /2
Per crop (HUF)
Per year (5.5 crops, HUF)
OUTPUT: 1000 chicken of 2 kg @ 190 HUF/kg
380 000
2 090 000
Less: 1050 day old chicks @25 HUF per chick
26 250
144375
353 750
1 945 625
starter: 1000 x 0,8 kg @90 HUF/kg
72000
396000
grower: 1000 x 1,5kg @ 55 HUF/kg
82500
453750
finisher: 1000 x 2,0kg @55 HUF/kg
110000
605000
Feed cost total:
264500
1454750
Heating, electricity
12000
66000
Labour (3 persons, for 11 days each @1000
HUF/day
33000
181500
Other (vet, extensionist)
20000
110000
VARIABLE COST TOTAL
329500
1812250
GROSS MARGIN
24 250
133 375
NET SALES INCOME:
VARIABLE COSTS:
Feed / 1000 chicken
Fixed costs (maintenance, phone, accountant,
etc.) HUF/year
Profits: HUF
70000
10
63 375
Sample output /3 improvement
Per crop (HUF)
Per year (5.5 crops, HUF)
OUTPUT: 1000 chicken of 2 kg @ 190 HUF/kg
380 000
2 090 000
Less: 1050 day old chicks @25 HUF per chick
26 250
144375
353 750
1 945 625
starter: 1000 x 0,8 kg @90 HUF/kg
72000
396000
grower: 1000 x 1,5kg @ 55 HUF/kg
82500
453750
finisher: 1000 x 2,0kg @55 HUF/kg
110000
605000
Feed cost total:
264500
1454750
Heating, electricity
12000
66000
Labour (3 persons, for 11 days each @1000
HUF/day
33000
181500
Other (vet, extensionist)
20000
110000
VARIABLE COST TOTAL
329500
1812250
GROSS MARGIN
24 250
133 375
NET SALES INCOME:
VARIABLE COSTS:
Feed / 1000 chicken
Fixed costs (maintenance, phone, accountant,
etc.) HUF/year
Profits: HUF
70000
11
63 375
Experiences with project
•
•
•
•
Students tend to get detailed technological data
Often forget about general economic data.
Project is generally popular
Organisational difficulty: organised farm visit by
bus, willingness of farmer to disclose of
information
• Learning difficulty: student has to find out what
information should be collected for the project
• Marks: by content, by work process, by output
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