US (WI): Veggie Compass helps growers make data-driven decisions

Fresh market vegetable growers with multiple crops and markets make numerous complex production and marketing decisions. Which crops are the most profitable? How quickly would a labor-saving tool pay for itself? Which markets make the most economic sense for a crop? Do prices cover production costs? The Veggie Compass farm management tool was developed to help farmers answer these questions and more, based on data gleaned from their farm operations.

Veggie Compass began as a partnership between the University of Wisconsin-Madison and Jim Munsch, a Wisconsin organic farmer and farm business consultant. In 2006, after working with fresh market vegetable growers on a cost analysis spreadsheet, Munsch joined forces with UW-Madison researchers Paul Mitchell and Erin Silva, as well as John Hendrickson of CIAS, to secure a USDA Risk Management Agency grant. The grant funded the development of a profitability management tool for diversified, fresh market vegetable operations.

Veggie Compass is now used by growers throughout the U.S. and beyond. Groups of growers can use Veggie Compass as a comparative tool to help them understand the norms for production and profit in specific regions. An expanded version of the tool, made available in 2014, includes instructional videos produced by the Southern Sustainable Agriculture Working Group (SSAWG), and an online video explains how to use a Google Doc form to collect labor data. Workshops on using Veggie Compass have been offered across the U.S., primarily in collaboration with SSAWG.

How does Veggie Compass work?
The overarching goal of Veggie Compass is to provide diversified fresh market vegetable growers with tools and know-how to optimally manage their farm operations. Veggie Compass is a Microsoft Excel spreadsheet in which growers enter their expenses and sales information, and then allocate detailed expenses, including production labor hours, to each crop (see Table 1, below). The spreadsheet uses this data to calculate each crop’s cost of production per pound (or other unit), net profit by market channel, and gross margin by market channel.

The financial data needed for the tool can come from accounting programs, checkbooks, receipts and invoices. Sales data can be gathered from sales receipts, harvest logs and weekly sales charts. Labor data needs to be recorded by crop and activity throughout the growing season, and growers typically enter their labor totals into the spreadsheet at the end of the season. The Veggie Compass website at www.veggiecompass.com has recommendations and sample forms for recording sales and labor data.

Read more at www.cias.wisc.edu