With a record number of preventive plant acres and dips in crop and livestock prices, last year proved challenging for many Missouri farmers. While no one can control the fluctuation in weather or predict the movement in markets, there are tools to help manage risk for 2015. And according to Kyle Samp, farmers can plan for profits by incorporating record keeping and projection software into their farming operations.

TECH SAVVY: While Kyle Samp enjoys working with numbers on a computer, he says certain software programs, such as the web-based GrainBridge, make it easy for farmers. The drop down menu and default categories makes entering expenses and receipts simple.

Samp, along with his father Dale, operates a corn, soybean and wheat farm in Randolph County. He uses a web-based software program, GrainBridge, as a risk management and budgeting tool. "It allows me to run all of my physical sales and cash sales plus wrap it all together with futures options in to one nice neat package."

How it works

For farm management programs like GrainBridge to work, Samp says farmers must log all expenses. The process is easy with GrainBridge with its default categories such as fertility, seed, and machinery. "These fields help you think about what costs are really associated with the farm," he notes. While it is a form-filled process with some software, farmers can makes similar categories for programs like QuickBooks or Excel.

He inputs all of his production cost using a drop down menu. "It is important to budget based on your cost of production," he notes. You have to know exactly how much that bushel of corn is costing you." Part of the cost of production should be labor. Unfortunately, he notes, when he first started adding in labor costs, it looked like many days the family was working for free. "You don't know those types of statistics unless you put it down on paper. It was a real eye-opener for me."

Then Samp sets production targets, such as yield. "With this information, I am able to develop a profit goal per acre," he notes. Then Samp sets a target price per acre to achieve his potential profit. "In years like this, it was hard to hit perhaps his level of profitability." If you set a target of $9.50 bushel beans and it hits that target, sell." He admits it is hard sometimes guessing at whether to hold for higher prices. "Once you set a target profit price, you have to be okay with selling, because you reached your projected profit, even if it does go higher."

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GrainBridge allows farmers to use real cost of production numbers per farm, per field or for livestock producers per pen. Its Target Planning tools allow farmers to track their business's net position throughout the year and then adjust the plan according to fluctuating markets. "It is just one tool that can help you create a position for your operation to market against," Samp explains.

Crop insurance scenarios

Being able to plan for the worst-case scenario is important to today's farmers. Samp found plenty of use for the crop insurance section of the GrainBridge management software.

"If I thought I was only going to have 80 bushel corn and 30 bushel beans, I could put those into the program and estimated, based on my crop insurance, what my payout would be," he explains. With those figures, he is able to evaluate the risk before it happens.

Samp says then farmers are able to strategize as to how to react to difficult crop years. "It is easier to plan before it happens than during the disaster." This year, he was able to run the model with his prevented plant acres.

This is the third crop cycle crop Samp has used the software. "More than anything it allows me to market with confidence."