Paul Carr, pictured at his office in Blue Earth’s Ag Center, works with farmers to ensure that accurate records are kept so they may be utilized in making important business decisions.

Farm Business Management instructor Paul Carr has first-hand knowledge regarding many of the issues farmers are facing today. While he is employed by South Central College (SCC) to help farmers become more efficient in their operations, Carr is also an active farmer himself.

Prior to coming to work for SCC, Carr had been employed at First Bank, Blue Earth, for almost 22 years where he was the chief ag credit officer.

“I really enjoyed my time at First Bank,” Carr says. “I had the privilege of working with some very good people.”

According to Carr, the reason for the change was so that he had more flexibility to operate his own farm.

“I farm too much to have a full-time job but not enough to be on my own,” he explains. “My new job is not meant to be a full-time job, although it has been busy lately.”

Carr says one of the things he focuses on in his new job is helping farmers with their record keeping which can include helping them understand and better utilize their record-keeping software.

“We want the farmer to have good records,” Carr comments. “First, accurate records are needed by the farmer for tax purposes. Second, a farmer needs to have good data for year-end analysis so he can prepare financial statements like balance sheets and cash flows – reports their lender will want to see. Third, by having good records, a farmer is able to compare their operation to others in the county and see how they are doing in relation to things like seed costs, chemical costs, land rent, machinery rent and a number of other items. There are over 100 farmers in Faribault County that a farmer can compare themselves with.”

The farmers Carr works with cover a broad spectrum.

“I work with some people who hardly need to borrow any money,” Carr notes. “But I also work with some people who are facing financial difficulties.”

Carr says agriculture currently is in a period where margins are extremely tight.

As an example, Carr shares that in 1996, the gross revenue from raising corn was about 30 percent of the price of the land. Now, Carr says that number is less than nine percent.

“So that magnifies the need of knowing where you are so that you can make good business decisions,” Carr comments. “With cash flows so tight, I work with the farmer to determine how their operation can be more efficient. We will examine each individual enterprise, whether it is grain or livestock. We will even look at each individual field separately to see how they compare with other fields.”

He says the higher costs of many inputs, combined with lower commodity prices, are combining to make profitability difficult these days.

“It seems like most inputs have risen in price. Seed, fertilizer, land, property insurance, heath insurance, property taxes and machinery repair costs are all higher. Interests costs are also higher than the real cheap level we had been dealing with,” Carr says. “Crop insurance is a little cheaper, but that’s about it.”

So, how do farmers deal with some of these issues?

“When it comes to machinery items like combines, they will run them longer. They just won’t trade as often,” Carr answers. “The price of used machinery has softened somewhat and that can provide farmers with some other options.”

Working with the farmers, Carr can help them get a better grasp of where they are and where they need to be.

“It is also very important to keep debt levels in check,” he notes. “If you are having to spend too much just making interest payments it can lead to problems.”

With things sounding gloomy at the present time it is a wonder any young people would want to farm. However, another part of his job is giving presentations on farm transitions and how that might be accomplished.

“There are programs out there to assist new farmers,” Carr remarks. “For example, one program offers tax credits to beginning farmers.”

Many of Carr’s clients are younger farmers.

“Some of the younger farmers work in town so they get their health insurance benefits,” Carr says. “Then they go home and put in another full day on the farm.”

And Carr finds that encouraging.

“There are still people with the drive to farm,” Carr states. “Even if they have to work a job in town to make it work.”

Another thing Carr can help farmers do is prioritize their goals.

“There are so many things which are out of a farmer’s control so then the key is to control the things you can,” Carr says. “That’s why I like my job. I like helping people so if there is something I can do to assist them, I am going to do it.”