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PRODUCTION HISTORY

 

     When we discuss records another area that must be addressed is our production record.  Perhaps if there is one area of our record keeping that is abused and neglected it is probably record keeping.  There are several formats that can be used.  There are no excuses for NOT keeping accurate production records.  Production history in a farming/ranching operation must be recorded by classification correlating to the smallest crop or sometimes field needing our direction and evaluation for future decisions.  These decisions can be very simple, i.e., whether or not to utilize no till versus minimum till or the complex process of evaluating the soil condition versus the required micro and macro nutrients each type of plant requires to succeed and produce a fruit or a by product.  This applies to livestock as well as it does to any type of plant that we may produce.  Accurate production records for the lender and for yourself will help analyze your performance.  In preparation for a guaranty loan with the FSA entity they require five years of production history and 5 years of income and expense history.  Why do you think it is required?  The main reason is, to see what type of business operation you are running.  A business cannot be successful if its records are not in place.  If you have never lived through an IRS audit, you have not lived.  They will dredge up everything you ever thought about owning, owing or purchasing and make you supply the records to prove its existence or non-ownership.  Another area that is becoming so vital in our every day existence is the pesticide and insecticide applications that we do in our operations.

 

     Law suits in our legalistic society become very costly both time wise and dollar wise.  Be extremely careful in everything you do to keep accurate records.  This is imperative.  Trust me on this, we know first hand experience and thank goodness all ours were in place.  So by all means keep accurate records that can be found and used again.

 

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