Monitoring profit is vital

THE Knowledge Transfer (KT) programme has large numbers of farmers participating in discussion groups in Kerry. All KT programme participants must complete a Profit Monitor for each of the three years of the KT programme duration.

The Profit Monitor is a facility that allows advisers to carry out a detailed analysis of the financial aspects of the farm business.

It provides a breakdown of the various elements that contribute to the farm output and cost structure as well as an analysis of cash flow trends. This latter aspect is particularly relevant in situations of business expansion or development where cash flow is crucial and may come under pressure.

The data produced by the Profit Monitor allows us to compare costs with accepted good standards and with other farms.

This facilitates the identification of costs that are out of line and presents us with the opportunity to change practices or routines that contribute to the problem.

Those farmers who do the Profit Monitor every year have available to them a multi-year comparison that allows them to track progress and evaluate the effect of any changes in management or investments undertaken.

The processing of a Profit Monitor is a complex exercise to be completed by a Teagasc Adviser or Agricultural Consultant. However it is the farmer that is providing the input information, costings and farm output figures to the adviser.

What the farmer puts in is what he gets out and to get accurate results accurate inputs are necessary. Management recommendations are only as good as the information on which they are based.

By doing an accurate Profit Monitor annually with high-quality information more informed decisions can be taken and more confident planning can be made for the future.

Time spent on assembling the relevant material and processing it is time well spent. The Profit Monitor must be completed for each year of the 3 year KT programme and comparisons can be made over the years as mentioned above.

One of the great benefits of the Profit Monitor is that it provides solid data for future farm planning. In the absence of this type of data we often end up using text book figures or standard data for planning which may be completely irrelevant to the farm in question.

By having good analysis of our farm businesses we can prepare more realistic plans with a much higher probability of successful outcomes. Teagasc dates for your diary: Expanding Your Horizons; seminar outlining help and support for people living in rural areas, Killarney Heights Hotel Monday, February 6, at 8pm. Also, National Hill Sheep Conference, Malton Hotel, Killarney, Wednesday, February 8, at 5.30pm.