AGRICULTURE BUSINESS MANAGEMENT Agriculture Marketing/Distribution and Retail Services Agricultural Business Management (30-90 days) This unit deals with agricultural business management in Wisconsin. Topics include career opportunities, farm establishment, organizing and managing the farm business, and the problem-solving, decision-making process. Objectives To acquaint students with employment information and career opportunities in the farm management industry To review guidelines used to assess the feasibility of starting a farm business operation To increase student awareness of the problems and scope of the management function, administration, and decision-making aspects of the farm business To improve student ability to keep accurate financial records and to use them to solve farm management problems To develop student understanding of the process used to develop short- and long-range farm business plans To give students opportunities to explore ways to make more effective use of the capital resources of a farm business Competencies At the conclusion of this unit, students will be able to explain current employment information such as job descriptions, job availability, personal and educational requirements, working conditions, opportunity for advancement, and other factors relative to potential employment in the agricultural business management industry and relate it to their personal needs and aspirations; identify several criteria for successful entry into the farm business; define economic terms such as resource, product, land, labor, capital, and management; apply the principles of marginal physical product, marginal value product, and law of diminishing returns; interpret the opportunity costs of given products; understand the input-input and output-output relationships; comprehend the interrelationships of the manager's role in farm businesses; identify the cost concepts, including fixed,variable, total, and marginal costs; define the revenue and supply concepts in given situations; recognize the concepts of risk and uncertainty; relate to adjustments of uncertainty in given situations; draw conclusions of alternative methods to predict prices and yields; develop a long-range plan of farm businesses involving budgets, transition and annual planning, and cash flow statements; develop an accurate and complete inventory of all crops, livestock, and equipment required for the management function; and explain how financial records and analysis can be used to solve farm management problems. Subject Matter (Basic skills integration areas are shown in brackets following title.) Careers - Current and future employment needs - Job descriptions - Training requirements - Working conditions - Opportunities for advancement - Other factors Getting established in farming [Social Studies] - Opportunities Renting Ownership - Qualifications - Training needs and locations Types of farming [Social Studies] - Dairy - Crop - Livestock - Special Opportunity costs of agriculture [Mathematics, Social Studies] - Types - Applications Acquiring the farm [Careers, Mathematics, Social Studies] - Personal resources - Farm and area resources - Personal preference - Financial situation Steps in acquiring a farm [Social Studies] - Leasing - Parent-child agreements - Part-time farming - Partnership - Purchasing Farm business arrangements [Social Studies] - Sole proprietorship - Partnership - Limited partnership - Corporations Basic economic principles [Mathematics, Social Studies] - Product functions - Law of diminishing returns Financing the farm [Social Studies] - Outright purchase - Land contracts - Installment sales - Special arrangements Credit types [Social Studies] - Short term - Intermediate term - Long term Credit sources [Careers, Social Studies] - Banks - Credit unions - Farm credit services Production Credit Association (PCA) Farm Credit Bank - Farmers Home Administration (FmHA) - Insurance - Other, (e.g., personal, family, individual, land contracts) Farm records [Mathematics] - Inventory - Net worth statement - Income records Operating Capital Purchased for resale Nonfarm income Other - Expense records Operating Capital Labor Personal (family living) Nonfarm expenses Other - Depreciation schedules - Filing systems for a farm - Record retention Financial records [Mathematics] - Net worth statements - Profit and loss statements - Cash flow statements - Farm business analysis Farm financial ratios [Mathematics] - Current debt to worth - Equity value - Net capital - Solvency - Liquidity - Profit to net worth Planning procedures [Careers, Social Studies] - Family goals - Resources available - Budget development - Labor required - Farm business alternatives - Compare new plan with present plan - Farmstead planning - Crop field arrangements Preparing budgets [Mathematics] - Fixed costs - Variable costs - Family living costs Farm insurance [Social Studies] - Negligence - Liability - Life - Health - Fire, wind, etc. Risk and uncertainty [Social Studies] - Types - Aspects and conditions - Decision criteria under varying states of knowledge Other management considerations [Careers, Science, Social Studies] - Soil conservation and water management - Educational opportunities Cooperative Extension Universities Vocational, technical and adult education colleges Others - Types of farm business organizations - Government, agricultural stabilization, and conservation services Motivational Activities Take field trips to different kinds of farms. Invite resource speakers to discuss different sources of credit and agricultural business arrangements. Develop a farm income-and-expense book. Analyze financial records, such as financial statements, cash flow, and profit-loss records. View films, videotapes, and slides on topics related to this unit. Demonstrate computer software for agricultural business management. Learning Activities Participate in a Supervised Agricultural Experience program. Gather the information and prepare the forms necessary to purchase a farm. Evaluate the crop enterprises grown on the family or a local farm. Complete and interpret the farm business analysis and profit-loss statements for an example farm. Develop crop and field plans in relation to livestock needs. Evaluate a net worth statement of the family or example farm. Develop short- and long-range planning estimates for the family or example farm. Instructional Materials Textbooks and References Agri-Business Finance by Gary T. Devine. Danville, IL: Interstate, 1981. Available from National Farm Book Company. Doane's Facts and Figures for Farmers. 4th ed. Bloomington, MN: Doane Information Services, 1981. Available from Nasco. Doane's Farm Management Guide. 15th ed. Bloomington, MN: Doane Information Services, 1982. Available from Nasco. Estate Planning for Farmers by J.W. Looney. 3rd ed. St. Louis, MO: Doane Information Services, 1979. Available from National Farm Book Company. Farm and Ranch Business Management. Moline, IL: John Deere Company, 1987. Farm Estate and Business Planning by Neil E. Harl. 9th ed. Niles, IL: Century Communications, 1984. Available from National Farm Book Company. Farm Management by Michael D. Boehlize and Vernon R. Eidman. New York: John Wiley and Sons, 1984. The Farm Management Handbook by W.P. Mortenson and R.A. Luening. 6th ed. Danville, IL: Interstate, 1979. Available from National Farm Book Company. Financial Management in Agriculture by John A. Hopkin et al. 3rd ed. Danville, IL: Interstate, 1983. Available from National Farm Book Company. Financial Planning in Agriculture by K.C. Schneeberger and D.D. Osburn. Danville, IL: Interstate, 1977. Available from National Farm Book Company. Introduction to Agribusiness by N. Ormi Rawlins. Englewood Cliffs, NJ: Prentice Hall, 1980. Available from National Farm Book Company. Managing the Farm Business by Larry J. Connor et al. Englewood Cliffs, NJ: Prentice Hall, 1981. Available from National Farm Book Company. Bulletins and Pamphlets The following are available from the Cooperative Extension Service. Do Landlords Make a Difference A9N3T143. Farm Records Example. A7801211. Getting Started in Farming. NCR81. Is Corporate Management of Farming a Threat A9N4T143. Planning and Managing Your Farm Business Center. NCR233. Planning Your General Farm Partnership Arrangement. NCR224. Periodicals Crops and Soils Doane's Agricultural Report Drovers Journal Wisconsin Agriculturalist Computer Software The following are available from Doane Information Services. Ag CheckFinancial Recordkeeper. Apple, IBM. Ag Check PlusFinancial Management System. Apple, IBM. Ag DiskBudgeting. Apple, IBM. Ag DiskCash Flow. Apple, IBM. Ag DiskFarm Accounting. Apple, IBM. Ag DiskFinancial Management. Apple, IBM. Ag DiskProfit Projector. Apple, IBM. The following is available from Farm Business Software Systems, Inc. Transaction Plus. IBM. The following are available from Hobar Publications. Agricultural Marketing and Commodity Futures. Apple. Farm Accounting Package. Apple, IBM, TRS. Farm Business Analysis. Apple. Farm Management and Related Review Package. Apple, IBM, TRS, Macintosh. Farm and Ranch Business Management and Related Review Package. Apple, IBM, TRS, Macintosh. The Farming Game. Apple, IBM. The following is available from Midwest Agribusiness Services, Inc. Agri-Quiz: Farm Management. Apple, IBM. The following is available from Mid States Agri-Technology Associates, Ltd. Micro-Tutor: Farm Management. Apple, IBM. Laboratory Resources The following are available from the Ohio Agriculture Education Curriculum Materials Service. Coordinated Financial Statements for Agriculture. 804X. 2nd ed. 1984. Good Farm Accounts. 8022M (Student manual). 1979. Set of Financial Statements. 805X. 1980. You and Your Balance Sheet. 806X. 1985. Films, Videotapes, and Slides The following is available from the Bureau of Audio Visual Instruction. Farm Records: The Net Worth Statement. 11342 (VHS videotape, color, 35 minutes). University of Wisconsin, Department of Agricultural Journalism, 1984. The following is available from the Grange Farm Film Foundation. In the Pursuit of Excellence - Agricultural Excellence. (16mm film, color, 13 minutes.) The following is available from the Media Resources Center. Estate Planning: Keeping the Farm in the Family. S28288F (16mm film, color, nine minutes). John Deere Company, 1975. The following are available from the Modern Talking Picture Service. Enterprise Farming. (16mm film, color, 20 minutes.) Estate Planning: A Family Affair. (16mm film, color, seven minutes.) The following are available from Vocational Education Productions. Agricultural Management Series consists of the following five color filmstrips, each with cassettes and scripts: "Agricultural Cooperatives." 1-810-132H. "Agricultural Credit." 1-810-135H. "Agricultural Marketing." 1-810-133H. "Farm and Ranch Management." 1-810-134H. "Farm Personnel Management." 1-810-136H. Equipment and Facilities Computer/printer