Archive for the ‘Agriculture’ Category
There are many stereotypes about CPAs, and probably none of them involve accountants donning beekeeper suits. But that is exactly what happened earlier this week when several of us visited Gentry Apiaries in Oakdale, CA. One of the highlights of our work is when we get to see our clients in action and learn about what they do… and this “field trip” was no exception.
Louise Gentry and Lucille Hoffman shared their 30+ years of experience in the bee industry, specifically the raising and selling of queen bees. Our tour began in the warehouse where bees are boxed up for sale. After suiting up in protective clothing, we headed outside to observe the daily feeding routing. Louise and Lucille demonstrated how they open up the hives each day to inspect the queen bees and refill the feeders with syrup. In the “don’t try this at home” category we learned that you can catch a bee by grabbing its wings. Let’s just say that if you’re not fast enough to get both wings at the same time then plan on getting stung.
Louise Gentry (right) discusses her beekeeping experience with Dave Aced (left)
Lucille Hoffman (r) showing Cynthia Guerrero (l) emerging bees
We learned a lot of other interesting facts during our visit. For example, bees can fly up to 5 miles from their hive in search of flowering plants and when they return to the hive they are inspected by “guard bees” before being allowed back into the hive. Both Louise and Lucille talked about how they got into the business, and the fact that they continue in this labor intensive work simply because they love what they do. And in case you’re wondering – getting stung is just part of the daily routine for these folks.
- Lucille Hoffman inspects a frame for queen bees
Thanks again to the folks at Gentry Apiaries for their hospitality. I’m always amazed at how much we learn when we spend time with our clients in their business environment.
Grimbleby Coleman staff headed out of the office yesterday to enjoy some warm weather and support two local ag events. We were a Silver level sponsor at the Ag Aware Luncheon hosted by the Chamber of Commerce to raise funds for local high school Future Farmer of America (FFA) programs.
There are seven FFA chapters in the Modesto area that teach high school students about agriculture. Students are given the opportunity for hands on learning projects, and they also learn skills and character qualities that will serve them well in any industry. Two current FFA members exhibited outstanding public speaking skills by telling about their FFA experiences and their plans to be involved in agriculture in their careers. One nice aspect of FFA is that no prior ag background is required, and the students talked about how FFA transformed their vision of farming and agriculture.
Later in the day we also attended the 98thAnnual Meeting of the Stanislaus County Farm Bureau. About 200 attendees were at the dinner meeting for the annual election of officers. Assemblyman Bill Berryhill gave an informative update on several legislative items that will impact ag. The event also included a number of awards to local elementary students for their winning essays in the “Imagine this… Stories Inspired by Agriculture” program.
We enjoyed visiting with a number of clients and other folks that stopped by our booth to chat. Hope to see more of you at future events (check our website for upcoming events). It’s always inspiring to meet the people that are hard at work putting food on our tables.
-Jeff B.
Grimbleby Coleman was a sponsor at the Oakdale Chamber of Commerce Ag Scholarship luncheon on Feb. 23rd. Our group enjoyed the presentations by Dr. Eric Mussen (UC Davis apiculturist) and John Miller (Vice President, Cal. State Beekeepers Association) on the topic of “What’s the Buzz all About?”
Bees play a key role in the $2.6 billion almond industry by providing pollination during this time of year. If you’ve been enjoying the nice weather and spending time outdoors lately, you’ve probably observed the blossoming almond orchards and active bees. California’s 750,000+ acres of almond trees require over a million colonies of honey bees for pollination, and beekeepers from all over the country play a critical role in meeting that demand. Honey bees have gotten their share of press over the last several years regarding the troublesome losses known as “colony collapse disorder” (CCD).
Dr. Mussen and Mr. Miller talked about the challenges faced by beekeepers, some of whom are struggling to cope with losing 30% of their colonies each year. Research on the cause of CCD is ongoing but so far inconclusive other than pointing to some combination of pathogens, pesticides, or nutritional issues. One interesting fact explained by Dr. Mussen is that the elements causing sickness within the colonies have no impact on the purity of the honey produced, since honey is a water based substance and the foreign elements are found in an oil based (lipid) substance. Just as oil and water don’t mix, so the honey is able to maintain its purity without contamination from other negative substances in the colony.
John Miller closed the informative presentation by noting the success of the almond industry, which he illustrated (tongue in cheek!) with the following chart:
“Growing Advantage” was the theme of the 2011 Almond Conference earlier this week in Modesto, CA. The theme was well deserved by an industry whose production has ramped up from 516 million pounds in the early 1990’s to around 1.9 billion pounds this year. I attended a portion of the conference, and I was particularly impressed with the panel presentation on the Economics of Almond Production.
A common theme from several growers on the panel revolved around subjects that are near and dear to a CPA’s heart: strong accounting systems, active budgets, and measuring results. The presentations by these growers were a great illustration of concepts that we’ve been talking about for a long time, and I’m excited to see them applied in the ag setting.
Accounting Systems – the days of pencil and paper are gone for most businesses, and farming is no exception. The most important thing about an accounting system is that it should be able to supply the information needed for informed decisions on a timely basis. We’re seeing more and more ag businesses invest the resources to upgrade or add systems that are leading to better informed decisions. Most people didn’t choose to farm because of their love for paperwork, but those that pay close attention to the financial matters will have an advantage.
Active Budgeting – one grower talked about their operation’s use of budget to actual reports, including the use of cost centers to separate crop production and overhead costs. These were monthly reports with line by line budgeting. Does it take some time and headache each year to plan this budget? Sure, but the reward is better feedback throughout the year in monitoring their financial performance. A budget can look like an overwhelming process, but we’ve helped clients break it down into manageable pieces that are easier to deal with and achieve results.
Measuring Results – several growers talked about measuring Return on Investment and Return on Acreage, both being key components of the farm business scorecard. How does your net return per acre compare to the value of that acre of land? Karen Klonsky discussed the UC Davis cost study results which calculated that it costs $8,738 per acre to establish an orchard – what kind of price and production results are needed to make that a profitable investment over the next 25 years? [As an aside, the UCD cost study can be found at http://coststudies.ucdavis.edu]
In summary, the conference was well worth attending. The presentations highlighted the fact that the growth of business expertise in the almond industry has kept pace with their expanding crop production. Financial measurement and analysis is just as pertinent for the farm as it for the factory, and we enjoy helping our clients make these concepts a reality in their businesses. Best wishes to the industry for a great 2012!
Once again the ground is shaking, dust is swirling, and lots of slow moving machinery is on the road. You don’t have to go far out of town to see corn being chopped into silage for dairies or almonds being shaken from the trees and swept into rows in the orchard. Harvest is a time of reckoning, when yields are counted and results are tallied.
When you think about it, harvest is a lot like running a business. The whole process is similar to the kind of annual scorekeeping that many businesses do at the end of their financial year. There are a number of object lessons that can be learned from the farm life cycle:
Yield – The yield is similar to the revenue reflected on your business income statement. But what about all of the activities that influence that yield? How does a business owner or farmer for that matter impact the results of his harvest?
Inputs – The successful grower spends time and effort to add soil amendments, fertilizers, and other nutrients that will help maximize the crop. What factors help determine the size and quality of your business “yield”? Depending on your business, it could be investments in better technology, or additional training for your employees. And just like the farmer, you’ll need to weigh the costs vs. the expected benefits.
Dormancy – the almonds being harvested all around us required a certain number of hours of cold weather during their winter dormancy season. Businesses also need downtime to regroup and plan for the year. How much time are you allowing to think and plan for your business? How effective are those planning sessions?
Water – every crop being harvested is the result of a sustaining flow of water during the growing season. Cash is the water of every business – are you managing your cash flow effectively? Are you strategically saving the excess cash in good times as a resource for “drought” in other seasons?
The list could go on, but suffice it to say that whether your business is farming or something else there is a lot that goes into completing a successful year. Thoughtful strategic planning, careful budgeting, and diligent financial oversight can all work together to grow better fiscal yields in any business. So the next time you drive through a cloud of harvest dust, take a moment to appreciate all the planning and processes that result in food on our tables. And to all of our farming clients and their families, best wishes for completing a safe and profitable harvest!
In just two weeks from today, the World Ag Expo in Tulare, CA will be opening for its annual 3 day run from February 8th through the 10th. Touted as the world’s largest annual ag expo, the event covers 2.6 million square feet of show grounds and attracts around 100,000 visitors each day. The 1,600 exhibitors will be bringing lots of new equipment to see, and information to absorb from all sectors of the industry.
I’m excited about all of this because several of us from Grimbleby Coleman will be visiting the Ag Expo on Feb. the 8th. We’re looking forward to learning about new developments in the industry and visiting with our clients. If you plan to be there, let us know by an email or leave a comment below – we would love to stop by and see your exhibit and hear how things are going for you.
More info on the event is available online at www.worldagexpo.com. Hope to see you there!
Success in business lies in understanding the needs of our clients and customers and then providing something of value in response. Sounds simple, right? Our customers will tell us what they want, we take care of it and everyone is happy. Let me use my recent trip to Lowe’s as a quick case study of how this just might not be so simple in real life.
I stopped by Lowe’s one evening after work with a fairly simple mission: get the part I need to fix a broken plug on our vacuum cleaner’s electrical cord. Being the power-tool-inhibited accountant that I am, I knew there was a chance that things could get a little dicey once inside the store… but I was able to find the electrical aisle successfully on my own. I noticed a Lowe’s employee in the aisle and headed over to him with my simple request.
Me: “I’m looking for something to fix the end of a power cord.”
Employee: Blank look.
Me [realizing that this isn’t coming out quite as smoothly as I intended]: “Uh, you know, like where you plug a cord into a wall. I need something to fix that.”
Employee: Blank look, with hint of nervousness.
Me [wondering if I should talk louder, slower, or both]: “You know where the prongs are that go into a wall, and one of the prongs came out so I need to fix it…”
Employee: “Uh, this really isn’t my main area. I’ll get someone else to come over here.” [Exits rather quickly]
Ok, I’ll admit that while I could picture what I needed, I didn’t have a clue how to describe it. Actually, I should have been using the phrase “replacement plug” (which, for the record, I discovered on my own in the next aisle).
So maybe that communication thing isn’t always as easy as it sounds. Think about your customers. How can you help them communicate their needs and questions? Is industry jargon too often a barrier to your customer’s understanding? Sometimes it helps to look past the question to the motivation behind it. What are the unasked questions under the surface? While you may not have all the answers, your customers will appreciate your attempt to speak and understand their language.
I grew up in the country, where roads are “maintained” rather than “improved”, and where storm drainage can often be a challenge. So we were used to big rain storms (like last week) resulting in large puddles of water on either side of the road. We knew it was a big storm when the puddles met in the middle and stretched across the entire road (and as kids, it meant that some excellent “mud biking” was in store). A day or two after the rain had stopped, someone would notice the puddles and put up a warning sign like the picture above.
This always struck me as humorous. Everyone who lived on our road, or used it on a daily basis, had already been navigating the puddles for several days by the time these signs started showing up. We already knew, or had learned the hard way, that caution was needed. So what was the point of the sign?
When is a warning sign most effective – before something dangerous or unwanted happens, or after it occurs?
What about your business – are you getting timely warnings before adjustments are needed, or just historical indicators telling you that something has occurred? What are the key performance indicators that drive your business? How do you get accurate and timely feedback about these key measurements, so that you can react when adjustments are necessary?
Think about your potential warning signs and put them up early. Let people know what they mean and how to avoid the problems that could arise. Prepare a plan to follow to get you around the potential pitfalls.
And please, drive safely this week!
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