It’s Possible To
Profit In 2017
Many farmers are worried about 2017. Is it possible to not only break even but to make a profit? It all depends on what practices you have in place. We’re here to tell you that, yes, it is possible. But it takes a lot of diligence and hard work. Over the past few years, the price of grain has continued to decrease which has led to less working capital. There are going to be many challenges for farmers, and these will determine whether they simply stay afloat, or make a profit.
Do the Math
First of all, if you hope to thrive in 2017, it’s imperative that you are tuned into your numbers. This includes budgeting, cash flow, taxes, the works. Be sure you know the numbers inside and out. A helpful tool is to have a marketing plan already in place. That way, when the times comes to make a quick decision you are prepared and can make an educated decision. There should be no guesswork! Plus, having a marketing plan written out prevents any decisions made with emotion. This is one key to making your farm profitable when it seems impossible.
Be Wary of “Deals”
In the age of online retailers, it can be tempting to try and find the latest and greatest deals out there. Especially if you are paying more than you’d like for a product. However, keep in mind that most of the time, you’ll be paying up the wazoo for shipping. So something you thought was a steal, could end up being a terrible purchase. The same goes for out of state purchases. Take into consideration how much it will cost to travel there and back, is it worth it?
Keep Lenders in the Loop
Additionally, your lenders will always be watching how you handle expenses. This is another reason you need to be on top of the numbers and stay organized. Keep the communication open, and make it a point to keep lenders updated. Let them know how everything is going, and whether or not you’ve faced any challenges.
Family vs. Farm
The next thing to consider is that expenses for the family and for the farm need to be kept separate. Take the time to figure out how much it costs to support the family, and take that amount as a paycheck. Keep separate accounts, and every month when you take a paycheck it should go into the family account. Personal expenses should not be paid for by the farm.
Assess your Assets
Also, a good way to cut back on expenses is to evaluate which assets you aren’t using. Old equipment that no longer serves a purpose isn’t exactly doing you any favors. Things that do not get used regularly are just taking up space. In addition, try not to overstock materials. It’s definitely a good idea to have back-stock, such as new filters or belts. But, that doesn’t mean you need to buy in bulk.