Study circles allow beginning and establishing growers to learn from experienced farmers and experts, compare notes with peers and network in an informal setting. A recent study circle held in Western Pennsylvania highlights the value of this approach to learning.
Western Hub Study Circle
The Western Hub Study Circle first met in March 2015. Farmers gave input on which topics they were interested in learning more about, and this discussion has guided the five meetings that have followed. Participants have learned from experts as well as from fellow growers, discussing topics as wide ranging as farm equipment, on-farm energy efficiency, marketing strategies and business management, record keeping, and soil health/ cover crops.
Financial Management and Accounting: "Money Is Made With a Pencil, Not a Pitchfork"
On March 31, 2016, the Western Hub Study Circle met at Harvest Valley Farms in Gibsonia, Allegheny County. The meeting was hosted by Dave King, second generation farmer and co-owner of Harvest Valley Farms. Participants enjoyed a potluck dinner, informal presentations and a lively discussion on financing and accounting for agricultural enterprises.
Mike Hoover, an accountant at MSC Business Services, PA Farm Bureau, gave an introduction to the range of financial and accounting services which their company can provide to agricultural enterprises. Juliette Enfield, an Extension Educator in Farm Business Management, shared tips for better farm accounting and provided information on upcoming Penn State Extension farm business workshops.
Juliette shared 5 tips for farm financial management:
- Don't leave your farm financial management to your accountant. Your accountant doesn't know your business as well as you do and may or may not be familiar with agricultural business. The farm manager should have his or her own records that more accurately reflect the profits of the business.
- Know your cost of production for key items. If you do not know your cost of production, you will not know whether you are making money or not. Calculating the cost of production for an item will take some time, but there are budgets available for you to follow.
- Don't believe that time spent in the office is time wasted. Allocate a part of every day or every week to update your farm financial records. Record keeping is a critical part of running a business.
- Clearly define your business' mission and vision. These are the ultimate goals and values of the business. Most people think this is only important when a business first begins, but as the business evolves, the mission and vision change too. The mission and vision of a business is a powerful communication tool among all partners who have a stake in the business.
- Have a marketing and sales plan. Research prices and markets whether you are selling locally, nationally, or internationally. If you can farm well but you have not identified where and when you will sell your products, you will not be able to grow your business.
Penn State Extension's Farm $en$e class teaches farmers how to understand their business' financial statements in order to make informed management decisions on the farm. As a part of the class, participants create financial statements for their farm. For a more advanced level of farm financial analysis Extension also offers QuickBooks classes tailored to farm businesses.
The Study Circle presenters sparked an active discussion in which growers of all levels voiced their financial management successes and challenges, asked questions and learned from their peers. Two of the participants had professional farm finance experience and shared useful insight on farm loans and accounting.
Participants learned it is important to know your books, and one shared that "money is made with a pencil, not a pitchfork."
Learning and Networking: One Thousand Questions
The study circles have been a great forum for what one participant called "good open, honest discussion" and valuable networking. One hundred percent of the participants from the March 2016 meeting indicated they increased their knowledge through the study circle--82 percent reported learning a good amount or a great deal. They increased their knowledge of Penn State Extension and other resources, and 78 percent plan to do something different on their farm based on what they learned.
Since the last meeting, farmers have reached out to share even more positive feedback. Several of these beginning farmers contact presenters following the meeting, and several have sought out advice and professional services.
One participant shared that "in talking to other farmers I realize I'm not the only one with a thousand questions."