What Are Compass Tools?
Compass Tools are free downloadable spreadsheets created at the Center for Integrated Agricultural Systems, University of Wisconsin-Madison. These tools help farmers actively manage for increased farm profits by helping them understand their cost of production, by product and by market channel. This enables farmers to make strategic decisions to adjust prices, reduce costs, shift market channel focus, reduce or drop unprofitable products, and expand production of their most profitable ventures.
The very first Compass tool was Veggie Compass, first available in 2012. It was designed in consultation with diversified vegetable growers. Based on demand from other types of producers similar Compass tools have been developed. Livestock Compass is now available for meat and egg producers. A grain-crop tool is available which is focused on helping conventional grain producers estimate the financial outcomes of converting to certified organic production. In the future, we will have Compass tools for grass-based dairy farms and fruit and nut growers. The Fruit & Nut Compass will be a planning tool to predict expenses and profitability over a 15-year planning period.
Grower Challenges & Needs
Farm profitability is a major component of sustainable agriculture, in combination with environmental stewardship and social well-being. Profitability is crucial to sustaining and expanding organic vegetable production in the Midwest.
The Compass Toolbox is an ongoing project at the University of Wisconsin-Madison that responds to the need for tools to address farm financial viability. It involves the development of whole farm profit management tools and training workshops. Our tools are designed to help growers improve on-farm decision making and financial farm planning in order to maximize profitability and ensure the continuation of sustainable farms.
An important aspect of profitability is knowing the cost of producing goods sold in order to know the price needed for success. While specialization has become to norm for much of American agriculture, a strong counter current is highly diversified operations that produce a wide variety of products and sell in several market channels (e.g. CSAs, farmers markets, restaurants, and wholesale). This is true not only for vegetable growers but also livestock, fruit and grain producers. Such diversity makes it difficult for farmers to gather accurate crop- and market-specific cost information. This cost of production information is necessary in making financially driven marketing and farm planning decisions but is lacking within most of the record keeping systems used by growers.
Consequently, many growers make a myriad of decisions based on instinct rather than on data from farm records. This observation led to the idea that if a tool was available to help facilitate the collection and analysis of such information, growers would be in a better position to optimize both their productivity and profitability. Thus, the Veggie Compass effort was conceived.