Do You Benchmark Your Pricing Performance

[charliep]

Most of you will be doing the annual review of the financial performance of your business (accrual income statements, breakevens, cash flow, net worth) and are starting to prepare for 2004/05.

How many of you calculate an average price for your the crop you grow (revenue from a crop divided by volume sold) and compare it to an average price. Example on canola. Canola prices (rough numbers) varied from $8/bu to $10/bu in 2002/03? Which end of this scale were you at? This would not be to make anyone feel guilty but rather look for things that might have been done different/things that can be improved in the future.

What are others thoughts on this?

[craig]

Charlie I tried to do this but ran into some weird numbers. My year end is October and seem to run into problems sorting old and new crop. It shows the shortfalls of using appliance accounting for management purposes. Craig

[lakenheath]

Craig,

I am a accountant and a farmer. I agree with you that it may seem difficult to sort old crop and new crop prices. What I found useful was spreadsheets. Using pre-developed farm accounting programs has its benefits but sometimes they are not detailed enough for management purposes. I try to keep inventory records (year grow, crop type, protein, etc.). When I record sales I also include with the sale amount, the year grown, how many bushels, protein (basically as much information as possible). Then at the end of the year I can extract all the useful data I need. Spreadsheet programs are easy to learn and absolutely invaluable.