Agriculture Accounting: Big Buckets and the "Golden Rule"

▤ Summary

In farming especially, there are countless variables that can severely impact the production numbers of a farm—everything from the vagaries of natural weather patterns to soil quality, crop/livestock genetic factors, and the availability of labor at an affordable cost. The most ambitious effort in history to document and standardize agricultural information management was orchestrated by the National Pork Producers Council (NPPC) at the turn of the 21st Century. Three committees composed of the best and brightest executives and experts honed in on Production, Financial, and Managerial accounting standards that would bring world-class uniformity and management control to the pork industry and set the pace for producers of other commodities. Back then (and even now) most ag producers relied on stand-alone "generic" accounting software while tracking management detail and quantities within specialized production programs or custom spreadsheets. While some of these indirect measurements can be “folded in” after-the-fact, direct units must be captured within the same transaction as dollars, accounts and centers for a more accurate farm financial analysis that provides useful insights.

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