Cost of Production & Financial Basics Overview

How to estimate costs of production per unit for your operation, setting the stage to translate those numbers into meaningful reasoning for sales pricing and marketing decisions. We review  reading income statements (P&L), understanding cost of production, or COGS (cost of goods sold) and what goes into them, and how to classify other expenses, in relation to income and resulting gross and net profit.

Educators: Anjali Oberoi and Olivia Tincani

This workshop kicked off the “Bringing Meat to Market”  series of business trainings focused on the fundamentals of the supply chain, sales, and marketing of grassfed meats for western producers. Starting with one of the most important data points for your business, our first webinar will teach new and seasoned producers how to estimate costs of production per unit for their operation, setting the stage to translate those numbers into meaningful reasoning for sales pricing and marketing decisions. After all, one can’t imagine potential financial success without knowing the associated costs. 

We begin with a snapshot review of what goes into your income statement or P&L in order to differentiate between the cost of production, or COGS (cost of goods sold), and other expenses, in relation to income and resulting gross and net profit. From there we review what inputs are truly considered costs of production, and how to classify them in your accounting — whether this is handwritten, in excel, or in a software program. We discuss post-production costs and how they play into the mix, and the specifics of grassfed production as compared to other livestock businesses. We review how to figure in labor, both paid and unpaid, and how to determine the opportunity cost of your enterprise decisions. This course will act as a preview to a future session on budgeting and breakeven analysis.