Fruit and Nut Compass Decision Support Tool

Pointing the way toward Profitability with Tools Designed to Help Producers Make Informed Decisions

A diverse, greener, landscape requires…?

• Back of the envelop financial projections are often optimistic and lack detail.

• Undervaluing costs like labor, equipment, marketing expenses, cold storage, transportation costs, and the like can lead to unrealistically optimistic profit margins.

• Growers need tools that help them think through these finer details and make more realistic projections before they invest hard earned money and hard time in a new venture.

• The University of Wisconsin Center for Integrated Agricultural Systems (CIAS) just received a Sustainable Agriculture Research and Education (SARE) grant to produce just such a tool.

• The Fruit and Nut Compass will provide a flexible template for producers to carefully consider the potential profitability of multiple perennial crops and marketing channels separately and as a combined enterprise.

The Fruit and Nut Compass Tools for Diversified Perennial Crop Farms

Veggie Compass A Tool for Whole Farm Profit Management

Fresh Market Vegetable Farms

• Realities: • Diversified vegetable farms grow lots of crops • Diversified vegetable farms often have several marketing outlets • In addition to some shared overhead and direct costs, different

markets each have their own unique costs • Prices usually vary from across different market channels • Many growers keep imperfect, incomplete records • Labor, the biggest expense on a vegetable farm, is the most

difficult in terms of record-keeping • As a result, most growers do not know what crops or markets

are the most profitable for their farm business or have a good sense whether their pricing is adequately covering their cost of production

• Enter Veggie Compass: A spreadsheet tool to help diversified vegetable growers determine costs of production and profitability by crop and by market.

veggiecompass.com

Veggie Compass

• Farm Expenses

• Farm Sales

• Growing area of each crop

• Crop specific expenses

• # of plants in greenhouse

• Total greenhouse labor hours

• Labor hours by crop - field growing, harvest & packing

• Not Crop Specific (NCS) hours

• The cost of a crop up to harvest

• Total cost of a crop through harvest & packing

• Cost to produce each crop in $/lb

• Break even prices

• Total labor costs by crop

• Gross margin by market channel

Inputs Outputs

Input: Step 1

Input: Step 2

Input: Step 3

Output: Cost of Production

Output: Sales

Output: Enterprise Profit & Loss

Veggie Compass Overview of what it tells you. . .

• Tracks cost of production by crop within each market channel

• Helps you determine prices at farmers’ markets, wholesale, CSA, retail, restaurants

• Compares crop profitability • Helps identify efficiencies and inefficiencies • Gives you data to guide decision making: Which crops

to grow? How much to grow of each crop? Which crops are best suited for each market channel?

• Can be used to build “what if” scenarios

What Veggie Compass demands: • Record Keeping Diligence and Accuracy

Other Tools in the Compass Stable

Coming Soon:

• Pasture Dairy Compass for dairy farms using rotational grazing

• Livestock Compass for farms raising beef, lamb, pork chicken, eggs, etc. (tool will facilitate documenting costs of grazing-based production systems)

Products:

• Fruit and Nut Compass spreadsheet tool

• User’s manual

• Instructional videos

• Crop information sheets

• Project website

• In-person training workshops and

• Technical assistance to users of the Fruit and Nut Compass.

The Fruit and Nut Compass Tools for Diversified Perennial Crop Farms

Fruit and Nut Compass spreadsheet tool

• Worksheets for planning and projections forward looking tools • Perennial crops involve significant capital investment

(plants, trellis, fencing, etc.)

• Perennial crops usually involve a lag time between planting and full production meaning that it can take a while to recoup initial capital investment and begin making a profit

• Worksheets for annual profitability analysis backward looking tools • Similar to Veggie Compass

The Fruit and Nut Compass Tools for Diversified Perennial Crop Farms

Farming “success” is about more than just numbers and finances.

In addition to developing the Fruit and Nut Compass Tool, we will also:

• Interview fruit and nut farmers around the region to better understand how they define success and what factors have led to or impeded progress toward their goals.

• Through these interviews we will pull out a series of guiding principles and lessons learned that will be summarized in a research report and highlighted in case study videos that will be available on the project website.

• Main project contact: Matt Raboin, raboin@wisc.edu

The Fruit and Nut Compass Tools for Diversified Perennial Crop Farms

John Hendrickson Center for Integrated Agricultural Systems, UW-Madison

608-265-3704

jhendric@wisc.edu