Author: Carol Hinton
Planning Unit: Breckinridge County CES
Major Program: Farm Management
Plan of Work: Providing opportunities and resources to educate families on financial management
Outcome: Long-Term Outcome
During the past 27 years I have been asked, ‘just what does UK College of Ag say we can make on this crop’, but to this extent I would never have ever thought I would be asked so many times to run an Enterprise Budget.
Crop and livestock prices have been more than depressing for growers, and they began to realize that its time to put some numbers down on paper to verify what they were thinking.
I worked closely with two growers on tobacco enterprise budgets. They had all their crop input prices, down to the acre, even down to the labor per stick of tobacco. I put their numbers in the electronic Crop Enterprise Budgets on the UK CAFÉ Ag Economics website, and it was a huge eye opener for them. It began as a mission of theirs to find out where they were losing money and it came down to a big decision of do ’I continue to grow losing 26 cents per stick and I hope Mother Nature will treat me better’ or ‘do I move on without tobacco in my cropping system’. It was amazing, each farmer had their crop input costs, and the final budgets came within 1 penny of each other, that validated the figures for them.
Several factors played a roll into their decision making; what do I do with my tobacco equipment, what will I do with my time, will my employees be able to survive without tobacco income, and so many more emotions were running through their minds.
Farmer number 1, dropped tobacco, he was able to find an Assistant Farm Manager position in another county, he sold a few pieces of equipment, he found work for his employees on other farms, he still managed to plant 1200 acres of his own crop, and he put up the first hay in May, earlier than the past 20 years, he’s never looked back. He kept coming back to the fact that the mental strain was killing him, but he loved to raise tobacco.
Farmer number 2, dropped tobacco, sold the equipment, managed to cut hay for the first time in May and June that he has never managed to do raising tobacco, other farm employees were managing the cropping much better. They have not missed any part of the tobacco crop.
The process of running those Crop Enterprise Budgets didn’t stop with just two farmers. At every meeting producers would ask, ’just what kind of numbers are you showing these guys to make them want to get out tobacco’. I had permission to show the budgets to others and I think finally over 75 people had looked at them and pondered the same things.
During the COVID 19 time, I was able to talk with growers on the phone or at farm store, and the amount of stress, financially and mentally they are going through has been at times for them unbearable. It doesn't have to be tobacco that is causing a strain on the farm net income, it could be any crop. Growers have asked now for classes on developing their own business or re-inventing themselves for an off the farm job.
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