Breakeven Analysis and Scenario Planning Workshop

This 2-hour workshop is designed to assist producers in evaluating the breakeven point for different enterprises. Additionally, the workshop introduces scenario planning, enabling producers to analyze the impact of specific metrics or variables across various farm operation scenarios. These skills are crucial for producers to comprehend the repercussions of significant events like crop failures or reduced yields, especially in the face of ongoing climate disruptions. This is particularly relevant for those relying heavily on a substantial percentage of their income from high-risk specialty crops. Diversifying crops, markets, or adopting new production methods can benefit from the application of breakeven analysis and scenario planning, considering different potential events that may unfold in the future.

Understanding breakeven analysis is vital for farming operations, particularly in the context of unpredictable climate disruptions. Farmers need to make informed decisions that ensure the economic sustainability of their operations. Breakeven analysis provides a critical tool for assessing the point at which total costs equal total revenue, offering insights into the minimum level of production needed to cover costs. By employing breakeven analysis, farmers can proactively plan and adapt to the uncertainties posed by climate change, allowing them to make strategic choices in crop selection, resource allocation, and risk management. In essence, breakeven analysis serves as a fundamental practice in climate-smart farming, enabling farmers to navigate the complexities of a changing climate while ensuring the economic viability of their operations.

Scenario planning is a managerial tool that allows entrepreneurs to navigate uncertainties. Scenario planning involves the creation of future situations and facilitate the analysis of their potential impact on business operations. By anticipating different economic, climatic, and market conditions, farmers can develop flexible strategies that help mitigate risks and capitalize on opportunities. Scenario planning serves as a proactive approach, allowing farmers to adapt and thrive in an ever-changing agricultural landscape.

Link to the: Fact Sheet - Breakeven Analysis and Scenario Planning for Farming Operations

Link to the: Slide deck - Breakeven Analysis and Scneario Planing for Farming Operations

About the Presenter

Cian Dalzell has been farming since 2007, growing both the soil and financial records and systems at Three Maples Market Garden since 2010. In addition to growing vegetables in Berkshire County, he has a decade of working in natural foods retail and nearly a decade of providing business technical assistance. Cian came to the Carrot Project for a workshop on financial recordkeeping and is now the lead trainer and a business advisor with the organization. His areas of expertise include financial analysis and planning, competitive analysis, business planning, and building operational systems.

Funding Aknowledgement

This material is based upon work supported by USDA/NIFA under Award number 2021-70027-34693