Making Every Farm Input Count

Husker Home Place

How well we manage farm costs will determine profitability in times of record farm prices.

Published on: March 26, 2012

 

 

I hear it around town all the time. Farmers are making big money. Farmers are really doing well. Of course, for a small farm town, that’s good news, because when farmers have money, they spend it. They pay down debt, buy machinery, take their families out for local entertainment and build up their farmsteads and operations. Farmers and ranchers keep many rural towns moving.

In an interview about irrigation efficiency, one farmer told me the other day that many folks don’t understand that during times of record farm prices, input costs are also at record highs. That fact tells me that closely managing every input on every acre will determine if an operation stays profitable in these volatile times.

Farmers who have survived the farm crisis years of the 1980s, the droughts and floods and the roller coaster commodity prices of recent years are tough business managers. They understand efficiency. But the volatility of commodity prices, along with the steep rise in farm expenses, including land rent and taxes, have kept margins fairly tight.

To stay in business, every acre and every critter must be managed closely. That’s why variable rate technology and specific care to details are so crucial right now.

It is a message that we need to keep explaining to consumers. Farmers must be good stewards to remain in business. In the current financial climate, if they waste inputs like irrigation water, fertilizer and chemicals, they won’t survive. It is in a producer’s best interest to be mindful of resource use, because it saves money and because it is saving natural resources for their children. Saving fuel and soil in no till operations, planting cover crops to save soil and nutrients, or saving fertilizer and chemicals through variable rate technology protect the environment, and help farmers produce more by using less.

The farmers I talk with are the best kind of land stewards. They care about the animals they raise and the land they work, because these are the things that make their bottom line. They care about the land because most of them have been on the same farms for generations. And they care about leaving that same kind of legacy to the next generation.