With margins squeezed tighter than a gopher in a hay baler, efficiency and cost containment have become agriculture’s near-term mantra. Effectively marketing your crop to maximize income is critical, but as you prepare for the coming growing season, consider the expense side of the ledger.
Low-cost producers consistently tend to rank in the upper third of profitability. Does that mean farming on the cheap? Not at all. Wisely focusing resources, analyzing every expense and relentlessly searching for efficiencies are among the characteristics of producers who successfully balance cost containment and production.
In farming, we often talk about cost per acre. Many ag economists recommend adjusting that thinking — especially during more challenging times — to a cost-per-bushel approach. That can help you target resources, such as fertility, hybrid selection and other inputs, to areas with the greatest potential for the biggest return. What other ways can you reduce costs and improve efficiency? Here’s a handful of ideas worth considering:
- Although diesel fuel prices haven’t kept pace with falling gasoline prices, be prepared to pounce if you believe they’ve dipped near a bottom.
- There’s still time to reduce your tax burden for 2014 or impact it for 2015.
- Look for ways to reduce trips across the field next spring. To accomplish that, don’t overlook hiring custom work or purchasing or leasing a piece of equipment from your Case IH dealer.
- Closely monitor commodity prices and use available marketing tools to protect and maximize revenue.
- Inspect equipment now, and make necessary repairs to head off in-season downtime. The experts at your Case IH dealer can help with maintenance schedules and anticipate emerging problems.
- Work with state and federal agencies to ensure you’re capitalizing on all available programs and credits.
- Consider upgrading equipment to Case IH Efficient Power for higher horsepower and productivity plus greater fuel efficiency.
- Hone your negotiating skills; leverage your loyalty. Many suppliers are willing to work with their best customers.
There’s never a bad time to evaluate the cost side of your business. You’ll likely find that doing so will pay big dividends now and when markets cycle upward.