There is nothing easy about farming today. Between supply problems and rising costs, it is hard to break even, let alone realize a profit. Yet, when it is your livelihood, your family, and your way of life, then you find a way to adapt, adjust and change with the trends. You know that it is still possible to provide for your family and workers through farming by modifying some of your systems and techniques to bring costs down. Here are some ways to reduce costs in farming and help your finances stay healthy.
1. Implement Automation
One way to save money on your farm is to implement automation technology. By using irrigation management, you can be in control of how much water is used in precise locations. This can be monitored from an app so you do not have to be on-site to maintain proper irrigation. There are two advantages to this system. The first is that it saves you time in the field which could reduce employee costs because they do not have to manually work the valves. The second advantage is that you will save on water because of the precision possible with this system. Sensors can let you know about water consumption which reduces waste. Both of these benefits present ways to reduce costs.
2. Negotiate Early Orders
Purchasing your fertilizer, seeds, pesticides and herbicides takes up a huge part of your farm’s finances. Negotiating with suppliers for prices that your budget can handle is critical to your farm’s health. Try to purchase these items early to keep costs down and to stay on track for planning purposes. Researching all of the available supply options could uncover new products or smaller companies that are looking to build their client base. As long as the quality is still strong, don’t be afraid to go with lesser-known brands or generic labels for cost-saving purposes. Every dollar you save will add up to make a difference at the end of the month.
3. Repair Instead of Replace
There are times that you absolutely have to replace a broken or worn-out piece of equipment, but if at all possible, you should first try to repair what you have instead of buying a new one. Part shortages have made some types of equipment hard to come by and demand will always drive up prices when supplies are few. The only time it is more cost-effective to replace instead of repair is when the replacement actually saves your production money. Then the savings and the expense tax write-off make the purchase worthwhile. But, if replacement is more than repairs will be and doesn’t reduce costs, then don’t be fooled by a sweet-talking salesperson who needs to meet a quota.
4. Consolidate and Restructure
Consolidating debt and restructuring finances is a great way to reduce costs on your farm. Debt consolidation will get you on the right path to financial freedom and being debt free faster and will help you stay focused on productivity instead of bills. You can also use money from consolidation to put in place one of the cost-saving structures, such as automation, which is an investment that will continue to save you money. Restructuring your financial plan involves applying the cost-saving methods discussed here to your current budget and putting the money saved into the goals of your farm. You may have priorties to pay off debt, acquire new land, implement new methods or add a production line, and using the funds freed up in your reduced costs can get these started.
You want your farm to grow in all the right ways, such as productivity and profit, and not in the negative ways, like debt and expenses. Reducing costs by installing automation technology, buying supplies early, holding off on replacing expensive equipment and consolidating debt can give you the money your farm needs to stay healthy and viable for years to come.