How to Create a Farm Resource Inventory

Goats May 23, 2011 Print Friendly and PDF

2nd in a Series of Goat Economic Fact Sheets: How to Create a Farm Resource Inventory

Marion Simon, Ph.D., State Specialist for Small Farm and Part-Time Farmers Kentucky State University Cooperative Extension Program

Note: Under the U.S. National Animal Identification Program (NAIP), it is important for livestock producers to have a registered Premises Identification for their farm and point of origin identification for each goat marketed. These identifications should be used in your record-keeping and inventory lists. Goat farmers use land, labor, machinery, water resources, breeding stock, financial resources, and management to produce commodities for sale. It is important to identify and update all of the farm’s available resources at least once a year. An accurate up-to-date resource inventory can help to:

1. Complete a balance sheet;

2. Provide a summary of collateral that can be used for a loan application;

3. Identify problems with the condition of the farm’s assets and their management;

4. Provide information that can be used to evaluate options for growth and diversification;

5. Identify underutilized resources;

6. Compute non-cash expenses such as depreciation;

7. Determine the health of an operation; and

8. Document the farm’s resources in case of fire, theft, or storm damage.

Resource Inventory

The resource inventory will help to identify soil erosion in fields and pastures, manure that is stored (dumped) too close to water sources, financial problems such as too much debt or large variable costs, and needed labor and human resources. Only after a resource inventory is completed can the current health and future direction of the operation be determined. The resource inventory can be divided into these five areas:

1. Physical/Natural Resources

These include:

  • A map detailing the land topography; pasture; vegetative species; weeds and woody species and their sites; carrying capacities of each field; the location of structures including barns, working pens, and fences; and all water resources that are available including ponds, streams, automatic waterers, and rural water lines (a NRCS soil map and a hand-drawn map are helpful).
  • Soil surveys including land use and fertility (soil test) recommendations by field or area (a NRCS soil map and university Extension soil tests are helpful).
  • An accurate description of wildlife and domestic species and populations (including loose neighborhood dogs and coyotes) to determine potential predators or problems that can result from them.
  • A historical record of rainfall and weather patterns for the farm or local area.
  • The fair market value of the land (farm) if it were sold.

2. Human/Personnel Resources

These include:

  • All persons who work on the farm including the farmer, family, paid full- or part-time employees, custom hired operators (i.e., a hired trucking company or fencing company), friends and neighbors;
A. The names, assigned duties of each person, their salaries/wages, their skills and talents, their work schedules, emergency information for employees, and sources of help to cover a person who is absent or cannot perform his/her duties; and
B. I-9 (U.S. citizen or not) and other data that is needed for filing income taxes, insurance benefits, Social Security or tax identification number, etc.

3. Equipment Resources

These include:

  • The size, age, condition, and model or serial numbers of all equipment that is used by the farm (permanent identification on the equipment is helpful);
A. Note whether the equipment is owned, rented, or borrowed; and
B. Estimate the fair market value of each piece of equipment and its depreciated value (original cost minus accumulated depreciation).

4. Animal (and Forage) Resources

These include:

  • The inventory and value of all livestock including goats, guard animals, and others. The value of breeding stock can be determined by (1) original purchase price minus accumulated depreciation or (2) the fair market value. These records should include each animal’s identification (ear tag, ear notch, implant, or NAIP), breed records and registrations, breed or type, performance and production of dam and sire records;
A. The total number of fenced or available acres along with a history of yields that are used by each enterprise (i.e., goats and estimated forage production in the field).

5. Financial Resources

These include:

  • Cash and savings accounts that are used by the farm (it is best to separate farm and family living bank accounts, but this is often not practical for small producers);
A. Current debts: include the lender, the amount owed, the interest rate, and the time remaining on the loan;
B. Operating loans that are used year after year along with the expected amount to be borrowed, terms, and interest rates (these are loans that you expect to have each year for you to operate the farm but that you do not have now); and
C. Other credit that may be available (i.e., a tab at the feed store).

References

“Risk-Assessed Business Planning for Small Producers” curriculum developed by a joint project of 1890 Land-Grant Institutions, USDA-CSREES, and the SRRMEC (funded project collaborators: Marion Simon, Daniel Lyons, and Nelson Daniels), authors of the manual: Stan Bevers, Brenda Duckworth, Blake Bennett, Rob Borchardt, Nelson Daniels, and Allen Malone (Texas A&M University and Prairie View A&M University).

Marion Simon, Farm Business Planning chapter, Meat Goat Production Handbook, Langston University, OK, ISBN 1-880667-04-5, pp. 313-326.

Marion Simon, Farm Business Planning section, Web-Based Training and Certification Program for Meat Goat Producers, Langston University, OK.

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This work is supported by the USDA National Institute of Food and Agriculture, New Technologies for Ag Extension project.