The free program gives farmers and ranchers a breakdown of costs and revenues coming in and going out
With the help of provincial economists, Alberta farmers and ranchers are again reviewing their operations to see what’s making money and what isn’t.
Called AgriProfits, the Alberta Agriculture program is available each year for producers to get a breakdown of all the costs and revenues that go into and come out of their farm or ranch.
For example, cattle producers get to know exactly how much feed their herd is eating and how much each animal on average is returning in profits.
For crops, farmers learn how much fuel or spray they’re using and how much they’re earning per acre.
As well, producers learn the value of their assets, such as barns and combines, and how quickly they’re depreciating. Loan payments, labour costs and veterinary bills are also included.
In the end, all expenses and revenues are calculated to show how much of a profit a producer is making overall, said Ann Boyda, a livestock economist who oversees the program.
“It really analyzes the whole farm and, when I say the whole farm, I’m talking about a farm that has a number of enterprises, like cow-calf, backgrounding, forages or crops,” she said. “It’s very thorough.”
What’s more, she said, the program is free of charge.
“Production information is critical for a producer’s own business analysis,” she said.
“Any decisions they need to make, they will need to have a good understanding on where the costs are coming from and what’s generating income in their operation.
“We want them to be profitable and we want them to be successful, so that’s why we do this.”
Boyda said interested farmers should first send her basic financial details, which are kept confidential. After that, she will send a specialist to the farm or ranch for a walk-through.
In the following months, producers will then be sent a detailed analysis of their own operation, as well as an analysis that looks at how well producers across the province are doing.
The provincial analysis, which is an average of all the farms that participate in the program, lets producers compare their farm or ranch to that average.
By doing that comparison, they get a sense of what they could improve on, Boyda said.
“There’s no guarantees with financial markets in the economic sense, but generally understanding how their own system works and comparing that to the average will help with their decision making going forward.”
John Mochniuk, who farms near Wildwood, Alta., said he finds the AgriProfits program beneficial. He’s been part of it since 1991.
“It’s an awesome management tool that nobody could do without because they give you a total breakdown of your farming operation, as well as input costs and returns,” he said.
“They really just give you the knowledge, and it’s a great way to see how you compare.”
The program is also available to dairy producers.
Pauline Van Biert, a research analyst with Alberta Agriculture who oversees the dairy program, said it’s critical for producers to know their finances, particularly when it comes to comparing how they’re doing to the provincial average.
“You might think you’re doing good, but when you compare to an average, you’re thinking, ‘why is my vet cost three times as high as the provincial average when I thought I was doing good?’ ” she said.
“When you have nothing to compare to, then you don’t really get the whole picture.”
As well, the economic analysis can be helpful when it comes to succession planning, she added.
“If you are thinking about splitting up your farm or figuring out how much your farm is worth, you need to know where you’re at as a big picture,” she said.
“It’s important to know your numbers moving forward.”
Alberta Agriculture is still accepting applications for the program. If interested, crop and cattle producers can contact Boyda at email@example.com.
Dairy farmers who want to take part can contact Van Biert at firstname.lastname@example.org.