Analyzing Trends on Your Farm

A trend analysis is commonly performed at your year-end date. You can take this analysis to the next level and use your internal financial statements to monitor the trends on a monthly rotating basis. This would allow you to look at the trends closer to real time and spot issues and opportunities to improve the operations of your farm on a timely basis. You have more data in your records than what appears in your year-end financial statements. An analysis based on a number of inputs would also be very useful, for example, comparing the cost of fertilizer to the total kilograms of fertilizer purchased. This would allow you to segregate changes in cost in components based on price and quantity. You would be able to determine how much of the change in costs is controllable (i.e. quantity used) and how much is not controllable (i.e. price), or perhaps that is also controllable by using techniques like hedging or volume purchasing.