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Corn+Soybean Digest

Computing Profit

Steve and Amy Copenhaver wanted another tractor but didn't know if the purchase would be financially smart.

So the Stanley, IA, growers ran an analysis using a farm management program called Profit Manager.

“It allowed us to see how many dollars per acre it would raise our machinery costs,” Steve explains.

“This program really makes you aware that when you buy or own a piece of equipment, you've got several cost components to consider: principle, interest, repairs and depreciation,” he adds.

The result? They bought a used tractor and a corn planter in the same package. That raised their per-acre machinery costs by a total of $9/acre, but allowed more timely planting and corresponding higher yields.

Profit Manager is the brainchild of Chris Barron, a certified crop adviser, corn and soybean grower and Pioneer sales rep at Rolwey, IA. He and partners Rick Matthiesen and Jason Franck farm 1,900 acres, operate a Pioneer sales agency and do custom work for other farmers. They operate as Carson & Barron Farms, Inc.

Barron started wrangling with the concept of a computerized management program about four years ago. And, with help from Shad Decker, a friend and computer guru, he developed the program.

So what can it actually do? Plenty. It shows gross income per acre needed to achieve operation goals, the market price level needed to make an intended profit and which fields are most profitable or unprofitable. It gives the total cost of production per acre and/or per bushel and the breakeven sales price at each yield level. And that's just for starters.

Barron says the program is user-friendly and costs $120. He uses the CD-ROM for their operation and also for Pioneer clients.

The program asks a grower scads of questions to help analyze a situation. One example: Would hiring custom work be more prudent than buying more machinery?

“With the spreadsheet in this program,” Barron explains, “you put in your acres and it allows you to see where you're at in terms of cost per acre. If there aren't enough acres to justify the equipment, you can't afford to own it.”

One problem many farmers get sucked into is being too aggressive on bidding for rented land. “This tool has stopped me from being real aggressive on land rent,” Barron admits. “When you punch in the numbers, it quickly makes you a lot more disciplined.”

The challenges? In order to get good results, you have to be systematic enough to keep good records and then input actual figures from your operation, not use averages.

For more about Profit Manager, contact Barron at 888-938-6987, or e-mail him at [email protected].

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