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.
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
2. Human/Personnel Resources
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
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
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
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).
“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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