Episode Details

8 Ways to Increase Farm Profitability 
December 5, 2016 Nick Horob

Farm Finance<https://www.harvestprofit.com/blog/tags/farm-finance#categories>


As we’ve mentioned numerous times, we like to talk about actionable ideas that you can implement in your operation.

Here’s a list of eight things that you can do to strengthen your operation for 2017 and beyond.

8 - Meet With Your Local Grain Merchandisers

Most grain merchandisers I know are a wealth of local market knowledge.  Most are willing and enjoy sharing this information with their farmer suppliers. Here are a few things to ask them about.

  *   Inquire about local basis patterns. Basis follows certain local patterns and grain merchandisers can identify certain times of the year for you to target your basis “sales”.
  *   Ask them how they manage their spreads. This is an intermediate/advanced topic that many producers should learn more about. Futures spreads play a large role in the P&L of a commercial grain facility. You owe to yourself to learn about them. 
  *   Ask what you’d need to do to be the producer they call when they really need bushels.  You want to be the person they call when they are filling a train, a short sale, etc. Ask them what it would take to be that producer for them.

Schedule a meeting with your local merchandisers this winter.

7 - Study Your 2019 Split Tests

Most successful producers I know conduct split tests throughout the growing season.  It’s your job to sit down with anyone involved in your agronomy decisions (including sales people) to evaluate and learn from your tests.

As you likely know, every growing season is different.  You don’t want to completely change your plan from year-to-year based on results that were based solely on a year-specific weather issue.  You should try to identify trends in your tests from year-to-year rather than making a rash decision (eg. to completely throw out a company’s seed).

“If you don’t measure it, you can’t improve it.” You’ve measured it, now learn from it and improve it!

Also, I’d be completely open and share your results with neighbors and peers.  Knowledge is going to spread regardless so why not learn as much as possible as soon as you can.

6 - Don’t Buy Shit You Don’t Need

No explanation needed! That includes stuff from us. If you don’t think we’ll add value to your farm, certainly don’t buy our course or software.

5 - Shop Your Chemical Plan

Resistant weeds are costing producers a lot of money these days. They need to be dealt with but it’s my opinion that some producers are scared into buying an A+ mode of action (A+ = expensive!) when a B-quality mode of action (or generic) will work just fine.

My recommendation is to solicit a bunch of advice this winter on what chemical plans are working best in your area with a focus on both effectiveness and cost-efficiency.

4 - Set SMART Long-Term Goals

In a business with as much uncertainty as in farming, it is difficult to make confident decisions. During good times, it’s easy to think that they are here to stay and vice versa (today!).

These goals can include anything but they should follow the S.M.A.R.T guidelines below.

  *   S - Specific
  *   M - Measurable
  *   A - Attainable
  *   R - Relevant
  *   T - Time-based

Becoming a better grain marketer is a good goal in theory but it’s not a SMART goal as it’s very hard to measure and it’s not time-based.

Having more working capital is another good goal in theory but it’s not a SMART goal as it’s not specific or time-based.

Write down your goals and track them! Our favorite old friend, a spreadsheet, is great for