A partnership between Penn State Cooperative Extension and the Farm Service Agency has developed a successful production training program for more than 367 farmers. Farmers received training in producing planning and budgets, partial budgeting, and livestock and agronomic basics. Significant gains in knowledge occurred in multi-year planning, enterprise budgeting, and use of the Penn State Agronomy Guide. Designing workshop material for low-producing farmers proved difficult because most participants, while finding the topics helpful, also found the material too advanced. Future focus will encourage greater involvement with private-sector institutions and coordination between production and management Extension specialists

Balliet, Kenneth L

Chess, William J

Hanson, Gregory D

Parsons, Robert L

English

Clemson University: TigerPrints

The Journal of Extension Volume 40 Number 4 Article 11 8-1-2002 Farm Production Analysis Training for Small Farmers Gregory D. Hanson Penn State University, gdh3@psu.edu Robert L. Parsons University of Vermont, Bob.parsons@uvm.edu William J. Chess Penn State Cooperative Extension, wjc4@psu.edu Kenneth L. Balliet Penn State Cooperative Extension, kballiet@psu.edu This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 4.0 License. Recommended Citation Hanson, G. D., Parsons, R. L., Chess, W. J., & Balliet, K. L. (2002). Farm Production Analysis Training for Small Farmers. The Journal of Extension, 40(4), Article 11. https://tigerprints.clemson.edu/joe/vol40/iss4/11 This Feature Article is brought to you for free and open access by the Conferences at TigerPrints. It has been accepted for inclusion in The Journal of Extension by an authorized editor of TigerPrints. For more information, please contact kokeefe@clemson.edu. 	 JOEHOME JOURNAL GUIDELINES ABOUT	JOE CONTACT NATIONAL	JOB	BANKCurrent	Issues Back	IssuesAugust	2002	//	Volume	40	//	Number	4	//	Feature	Articles	//	4FEA8Farm	Production	Analysis	Training	for	Small	FarmersAbstractA	partnership	between	Penn	State	Cooperative	Extension	and	the	Farm	Service	Agency	hasdeveloped	a	successful	production	training	program	for	more	than	367	farmers.	Farmersreceived	training	in	producing	planning	and	budgets,	partial	budgeting,	and	livestock	andagronomic	basics.	Significant	gains	in	knowledge	occurred	in	multi-year	planning,	enterprisebudgeting,	and	use	of	the	Penn	State	Agronomy	Guide.	Designing	workshop	material	for	low-producing	farmers	proved	difficult	because	most	participants,	while	finding	the	topics	helpful,also	found	the	material	too	advanced.	Future	focus	will	encourage	greater	involvement	withprivate-sector	institutions	and	coordination	between	production	and	management	Extensionspecialists.	Internet	Address:	kballiet@psu.eduIntroductionA	training	partnership	between	Farm	Management	Extension	specialists	at	Penn	State	Universityand	the	Pennsylvania	Farm	Service	Agency	of	the	USDA	(PA/FSA)	has	provided	a	unique	outreachavenue	to	train	small-size	farmers	who	are	characterized	by	weak	financial	and	productionmanagement.	PA/FSA	requested	that	production	training	workshops	be	provided	as	a	follow-up	tothe	highly	successful	financial	training	conducted	in	alternate	years	at	approximately	15	Extensionoffices	across	Pennsylvania	(Hanson,	Parsons,	Musser,	&	Power,	1998;	Parsons,	Hanson,	Musser,Fruend,	&	Power,	2000).	The	program	reached	207	farms	in	1998	and	172	farms	in	2000.Program	GoalThe	Farm	Production	Analysis	Training	Course	accomplished	a	number	of	highly	valuableobjectives	in	outreach	education.	First,	the	producers	were	presented	practical	workshop	planningand	analysis	exercises	that	were	useful	to	them	in	their	individual	farm	operations.	The	FarmGregory	D.	HansonProfessorDepartment	of	Agricultural	Economics	and	Rural	SociologyPenn	State	UniversityUniversity	Park,	PennsylvaniaInternet	Address:	Gdh3@psu.eduRobert	L.	ParsonsExtension	Assistant	ProfessorUniversity	of	VermontBurlington,	VermontInternet	Address:	Bob.parsons@uvm.eduWilliam	J.	ChessRegional	Farm	Management	AgentPenn	State	Cooperative	ExtensionNew	Castle,	PennsylvaniaInternet	Address:	wjc4@psu.eduKenneth	L.	BallietRegional	Farm	Management	Agent	and	CEDPenn	State	Cooperative	ExtensionMiddleburg,	PennsylvaniaProduction	Analysis	Training	course	provided	an	integrating	framework	for	Extension	agents	andspecialists	to	work	together,	pooling	their	expertise	to	address	a	more	comprehensivemanagement	program.	Farm	Production	Analysis	Training	also	fostered	an	outreach	partnershipbetween	Penn	State	Cooperative	Extension	and	the	USDA/FSA	unit	in	Pennsylvania.	Without	FSAproviding	incentives	for	their	borrowers	to	attend,	it	would	have	been	difficult	to	achieve	theenrollment	turnout	required	to	conduct	the	Farm	Production	Analysis	Training	program	on	astatewide	basis.Production	Training	ProgramThe	Farm	Production	Analysis	Training	workshop	addresses	production	management	issues	thatare	typical	for	traditional	crop	and	livestock	producers,	with	a	special	emphasis	on	dairyproduction.	The	course	has	an	intense	focus	on	production	planning	and	workshop	exercises.	Thecore	modules	are:1.	 Annual	Production	Planning,2.	 Workshop	Planning	Exercises,3.	 Partial	Budgeting,4.	 Livestock	Production,	and5.	 Crop	Production	and	review	of	the	Penn	State	Agronomy	Guide.The	daily	homework	assignments,	listed	below,	indicate	how	the	course	begins	with	a	thoroughanalysis	of	the	just-completed	year	and	then	shifts	to	planning	for	the	upcoming	year.Day	1:	Analysis	of	the	past	year's	crop	and	livestock	performanceDay	2:	Enterprise	budgets	for	the	year	just	completedDay	3:	Project	enterprise	budgets	for	the	new	yearDay	4:	Capital	spending	plan,	crop	plan,	and/or	livestock	plan	for	the	new	yearDay	5:	Prepare	management	behavior	changes	for	the	new	year,	referred	to	as	"take-backs"and	"give-aways."The	assignments	are	organized	so	that	they	not	only	build	on	the	progress	made	by	theircompletion	in	stages,	but	also	comprise	key	components	of	the	farm	production	plan	for	theupcoming	production	cycle.Annual	Production	PlanningEnterprise	AnalysisThe	planning	process	begins	with	careful	evaluation	of	performance.	Producers	are	asked	to	rateeach	crop	enterprise	with	respect	to	yield,	planting	timeliness,	weed	control,	harvest	timeliness,machinery	performance,	and	labor	performance	as	Poor,	Fair,	Good,	or	Excellent.	Then	producersare	challenged	to	briefly	identify	(in	writing)	the	number-one	management-related	productionproblem	of	each	enterprise.	This	done,	the	producer	is	further	requested	to	briefly	indicate	howhis/her	management	would	change	in	the	new	year	to	better	address	the	number-one	problem.	Asimilar	enterprise	evaluation	is	conducted	for	each	livestock	activity	on	the	farm.Enterprise	BudgetsAn	enterprise	budget	is	prepared	with	column	entries	for	the	year	just	completed,	the	projectedcosts	and	returns	for	the	new	year,	and	the	actual	costs	and	returns	for	the	new	year.	Thesebudgets	are	generic,	with	a	focus	on	the	major	categories	of	yields,	commodity	prices,	seed,fertilizer,	chemicals,	repairs,	crop	insurance,	depreciation,	fuel/oil/lube,	custom	hire,	and	"other."	Asimilar	three-column	enterprise	budget	for	livestock,	with	feed	and	supply	inputs	detailed,	is	alsoprovided	to	the	producers	with	livestock.Capital	Spending	PlanPurchases	and	sales	of	machinery,	livestock,	and	real	estate,	including	remodeling	of	facilities,	areprojected	in	terms	of	dollar	outlays.	And	a	brief	description	of	asset	type,	year,	model,	etc.,	isincludedProduction	Plan:	Crops	and	LivestockA	generic	production	plan	with	categories	for	acres,	yields,	sales,	and	inventory	carry-over	is	alsoprepared,	with	three	separate	columns	in	each	category	for	past	year-actual,	current	year-projected,	and	current	year-actual.	For	livestock	and	dairy	producers,	a	similar	production	plan	isprepared	with	entries	for	animal	inventories	and	milk	and	meat	production	and	sales.Projected	Production	Progress:	Year-EndFinally,	each	producer	is	asked	to	briefly	prepare	a	statement	addressing	the	following	categoriesfor	the	new	year	production	cycle:1.	 Major	production	goals,2.	 New	changes	in	the	production	system	to	be	implemented,	and3.	 Financial	progress	anticipated.The	closing	exercise	in	the	own-farm	planning	process	is	to	prepare	at	least	two	"take-backs"	andtwo	"give-aways"	that	assist	the	producer	in	improving	his/her	management	performance	in	theupcoming	production	cycle.Workshop	Planning	ExercisesThe	workshop	exercises	focus	on	applied	issues	that	require	decisions	during	the	course	of	theproduction	cycle.	The	first	exercise	appraises	the	current	and	future	machinery	needs	of	theoperation,	for	each	major	implement	item,	including	current	fit	to	production	needs,	projected	dateof	future	upgrade,	and	type/characteristics	of	future	replacement	item.The	second	exercise	projects	how	the	farm	operation	could	best	increase	production	to	150%	ofcurrent	capacity.	The	rationale	for	this	is	that	producers	frequently	are	observed	to	increase	yieldsof	corn/milk	and	expand	the	number	of	acres/cows	so	that	combined	output	growth	of	50%	isachieved	over	a	5-year	period.	Workshop	participants	analyze	yield	and	production	units	5	yearsago,	current	levels,	and	projections	for	5	years	into	the	future.	This	is	followed	with	trend	analysisof	investment	and	debt	for	these	respective	three	time	periods.The	third	workshop	exercise	requires	producers	to	identify	how	they	could	increase	the	degree	ofproduction	specialization--doing	fewer	things	better.	Producers	consider	options	of	reducing	ownequipment	inventories,	using	more	custom	hire	applications,	and	redesigning	cropping	andlivestock	systems	to	become	more	focused	on	the	highest	revenue	producing	unit.The	fourth	exercise	is	particularly	aimed	at	small	farmers.	They	are	encouraged	to	think	"outsidethe	box"	in	evaluating	five	ways	to	compete	with	large	farmers:	updating	technology,	practicingcash	flow	budgeting	to	control	costs,	use	of	a	family	spending	plan,	recognizing	key	elements	ofthe	management	style	they	employ,	and	use	of	a	debt	reduction	plan.	These	exercises	enrich	thepeer-learning	processes	fostered	by	the	workshop	heuristic	approach.Partial	BudgetingIn	this	section	of	the	course,	producers	analyze	an	investment	decision	for	their	operation	in	termsof	the	four	traditional	categories	in	this	approach:Added	costs,Added	receipts,Reduced	costs,	andReduced	receipts.The	key	to	the	success	of	this	analysis	is	for	the	producer	to	narrow	the	focus	to	a	change	that	isneeded	to	strengthen	the	upcoming	production	cycle.Livestock	ProductionThe	impetus	from	Pennsylvania's	large	number	of	small-size	dairy	producers	led	to	thedevelopment	of	a	dairy	production	component	to	the	course	that	was	prepared	and	is	taught	byExtension	dairy	specialists.	This	component	focuses	on	topics	of	dairy	management	basics,	butalso	includes	such	features	as:Personal	goals,Management	of	debt-per-cow,Economies	of	size,Herd	management	goals,Feeding	and	nutrition,Pre-calving	management,	andReproduction.The	importance	of	the	"basics"	in	management	can	never	be	over-emphasized,	particularly	withsmall-size	producers.Crop	ProductionThe	Penn	State	Agronomy	Guide,	a	comprehensive	compendium	of	information	for	soil	testing,fertilization	requirements,	soil	preparation,	characteristics	of	seed	varieties,	erosion	control,alternative	tillage	systems,	etc.,	provides	the	base	for	this	segment	of	the	course.	Again,	Extensionagronomy	agents	lead	this	component	of	the	workshop.	Farmers	are	led	through	exercises	inreading	soil	tests,	calculating	nutrients	available	from	manure,	and	designing	fertilizer	andpesticide	program	for	specific	fields	and	crops.Participant	Evaluation	ResultsAll	participants	were	asked	to	complete	nearly	identical	pre-and	post-workshop	evaluations	toappraise	changes	in	knowledge	and	viewpoint.	Nearly	80%	of	the	participants	found	multi-yearproduction	planning	to	be	moderately	or	very	important,	post-workshop,	compared	to	a	31%	pre-workshop	level	(Table	1	(A)).Interestingly,	enterprise	analysis,	one	of	the	most	traditional	approaches	to	farm	management,registered	the	largest	increase	in	knowledge,	increasing	from	20.1	to	75.2%	(Table	1	(B)).	It	is	alsoencouraging	that	knowledge	of	the	Agronomy	Guide,	a	traditional	source	of	crop	productioninformation,	increased	substantially	in	the	"moderate"	and	"excellent"	categories	(Table	1	(C)).The	last	question	in	Table	1	(D)	was	only	asked	on	a	post-workshop	basis.	The	response	ofparticipants	was	very	positive,	with	71.1%	indicating	budgeting/planning	tools	would	be	helpful	tofor	their	farm	to	survive.	These	results	indicate	that	farmers	benefit	greatly	from	outreachproduction	programming	that	focuses	on	budgeting/planning.Table	1.Participant	Evaluation	of	Training	Components	(n=95)	Before AfterA.	Your	view	of	the	importance	of	multi-year	production	planningNot	important 7.10% 1.20%Not	very	important 15.50% 0.00%Somewhat	important 46.40% 18.80%Moderately	important 21.40% 56.50%Very	important 9.50% 23.50%B.	Your	knowledge	of	enterprise	analysisMinimal 18.00% 1.10%A	bit 20.20% 2.30%Somewhat	important 41.60% 20.50%Moderately	important 16.90% 64.80%Excellent 3.40% 11.40%C.	Your	knowledge	of	the	Agronomy	GuideMinimal 39.10% 1.10%A	bit 12.60% 2.30%Somewhat 18.40% 23.00%Moderate 21.80% 47.10%Excellent 8.00% 26.40%D.	Budgeting	and	planning	tools	that	will	help	your	farm	surviveNot	likely	2.20%Not	very	likely	4.40%Uncertain	22.20%Likely	56.70%Highly	Likely	14.40%Table	2	shows	that	farmer	participants	were	more	"satisfied"	or	"highly	satisfied"	with	the	moreproduction-based	components	of	the	workshop,	including	the	livestock	and	agronomy	sections.Given	the	increasing	importance	of	business	management	practices	in	a	globalized	marketeconomy,	this	result	reinforces	the	view	that	continued	focus	on	budgeting/planning	will	beimportant	in	Extension	programming.Table	2.Satisfaction	with	Core	Workshop	Sections	HighlyDissatisfied Dissatisfied So-So SatisfiedHighlySatisfied MeanBusiness 0.00% 6.20% 38.30% 42.00% 13.60% 3.63%Livestock 0.00% 3.60% 19.00% 56.00% 21.40% 3.95%Agronomy 0.00% 2.40% 19.00% 47.60% 31.00% 4.07%Participant	evaluations	from	2000,	when	compared	with	the	previous	instruction	cycle	in	1998,provided	some	evidence	that	the	course	was	viewed	to	be	useful	to	producers	(Table	3	(A))	andthat	the	course	materials	had	been	improved	(Table	3	(B)).	However,	it	is	very	evident	that	thistype	of	in-depth	workshop	is	demanding	of	the	participants.	For	example,	in	both	years	more	than90%	of	the	participants	found	the	level	of	the	course	was	"too	advanced"	(Table	3	(C)).	Also,	aboutfour	out	of	five	producers	believed	that	the	5-day	course	was	too	long	(Table	3	(D))	and	that	thebudgets	and	plans	prepared	for	their	own	farms	amounted	to	too	much	outside	work	(Table	3	(E)).Table	3.Evaluations	from	1998	vs.	2000	1998N=732000N=95A.	Topics	covered	were	helpful	for	my	businessYes 76.4% 78.9%Partially 19.4% 21.1%No 4.2% 0.0%B.	The	suitability	of	the	instruction	materials	wasExcellent 41.1% 53.2%Sufficient 56.2% 45.7%Poor 2.7% 1.1%C.	The	level	of	the	course	wasAppropriate 4.2% 5.3%Too	Advanced 94.4% 92.6%Too	Easy 1.4% 2.1%D.	The	length	of	the	course	wasAppropriate 30.1% 13.7%Too	Much 68.5% 84.2%Too	Little 1.4% 2.1%E.	The	amount	of	outside	work	wasAppropriate 11.1% 14.0%Too	Much 81.9% 86.0%Too	Little 6.9% 0.0%Discussion	of	Production	Management	Training	in	2002The	outreach	workshop	described	above	is	viewed	by	participants	to	be	highly	successful.	Inaddition,	there	is	little	question	that	this	type	of	in-depth	management	training	with	focus	onenterprise	analysis	and	planning	will	become	more	important	to	producers	in	the	future.	However,it	is	recognized	that	most	farmers	are	not	particularly	interested	in	upgrading	or	do	not	believethey	have	the	time	to	substantially	upgrade	their	management	processes.	A	one-on-one	focus,with	application	of	the	FINPACK	financial	and	production	management	software	or	MARKETEERmarketing	software,	would	be	ideal	if	county	Extension	agent	resources	were	adequate	(Penrose,Smith,	&	Vollborn,	1999;	Suvedi,	Lapinski,	&	Campo,	2000).	Integration	of	Web	site	resources	alsorepresents	an	option	for	the	future	(Walker	&	Holden,	2000).Given	these	heuristic	parameters,	our	focus	will	be	several-fold	as	we	prepare	for	the	next	round	ofPennsylvania	production	management	training	in	2002.First,	the	support	of	private	sector	institutions	to	encourage	farmer	participation	will	bepursued.	Partnerships	in	outreach	education	with	PA/FSA	can	be	extended	to	otheragribusinesses,	lenders,	and	cooperatives.Second,	thorough	preparation	of	the	county	Extension	agents	is	critical.	The	personal	tie-inbetween	the	workshop	participant	and	the	county	agent	instructor	makes	the	educationalexperience	positive	and	enjoyable	for	everyone	involved.Third,	the	materials	themselves	can	be	"polished"	so	as	to	continue	the	trend	towards	higherquality	and	more	professional	materials	with	each	training	cycle.Finally,	course	materials,	particularly	exercises,	can	be	partially	shifted	to	the	Internet.There	is	no	easy	remedy	or	solution	for	increasing	the	benefits	of	management	training	other	thanto	maintain	a	steadfast	focus	on	the	detail	and	quality	of	the	Outreach	education	product,ReferencesHanson,	G.D.,	Parsons,	R.L.,	Musser,	W.,	&	Power,	L.	(1998).	Impact	analysis	of	farm	financeworkshops.	Journal	of	Extension	[On-line].	36(3).	Available	at:http://www.joe.org/joe/1998june/rb2.htmlParsons,	R.L.,	Hanson,	G.D.,	Musser,	W.N.,	Fruend,	R.,	&	Power,	L.	(2000).	A	financial	trainingprogram	for	USDA/FSA	borrowers:	evolution	and	impacts.	Agricultural	Resource	and	EconomicsReview	29(2),	240-250.Penrose,	C.D.,	Smith,	P.L.,	&	Vollborn,	E.M.	(1999).	Production,	processing,	and	marketingopportunities	for	Athens	County,	Ohio	farmers:	Assessing	needs	and	creating	solutions.	Journal	ofExtension	[On-line].	37(6).	Available	at:	http://www.joe.org/joe/1999december/rb2.htmlSuvedi,	M.,	Lapinski,	M.K.,	&	Campo,	S.	(2000).	Farmers'	perspectives	of	Michigan	State	UniversityExtension:	Trends	and	lessons	from	1996	and	1999.	Journal	of	Extension	[On-line].	38(1).	Availableat:	http://www.joe.org/joe/2000february/a4.htmlWalker,	R.C.,	&	Holden,	L.	(2000).	Survey	Results	from	Users	of	a	Dairy	Management	Web	Site.Journal	of	Extension	[On-line].	38(1).	Available	at:	http://www.joe.org/joe/2000february/tt1.htmlCopyright	�	by	Extension	Journal,	Inc.	ISSN	1077-5315.	Articles	appearing	in	the	Journal	become	the	property	of	theJournal.	 Single	 copies	 of	 articles	may	 be	 reproduced	 in	 electronic	 or	 print	 form	 for	 use	 in	 educational	 or	 trainingactivities.	Inclusion	of	articles	in	other	publications,	electronic	sources,	or	systematic	large-scale	distribution	may	bedone	only	with	prior	electronic	or	written	permission	of	the	Journal	Editorial	Office,	joe-ed@joe.org.If	you	have	difficulties	viewing	or	printing	this	page,	please	contact	JOE	Technical	Support©	Copyright	by	Extension	Journal,	Inc.	ISSN	1077-5315.	Copyright	Policy

Farm Production Analysis Training for Small Farmers

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Farm Production Analysis Training for Small Farmers

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