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RSS By: Chris Barron

Chris BarronHave a margins question? Through this blog, you will gain insight into improving your bottom line, as a margins expert answers questions and provides farm business advice.


2011-12 Grain Profits

Oct 23, 2011


One way to think about improving opportunities for next year is to look at the profits per acre from 2011. Just as we calculate fertility removal based on yield per/ac., consider profit removal based on income per/ac. If yields are high it pays to replenish the soil with nutrients that were removed. If yields are lower the fertilizer application could be lowered somewhat, providing the current fertility level is adequate. The same is true as we think about profits. If profits are high we need to replenish each acre with the products and services which helped us to achieve success. If profits are lower for the year we may need to cut back on some overall expenses and reassess plans for improving our profitability next year.
Just as we document our fertilizer planning we should also document our profit planning strategies. If we put on a particular level of fertilizer, it's generally tied to a specific yield goal. When we invest in particular products and services they should also be tied to specific profit goals.
Be sure to invest some time during and immediately following harvest to assess which products and services specifically led to both positive and negative results. It's easy during harvest to think about changes or improvements from the combine seat. It's also very easy to forget several of the products, services, or management techniques without some written reminders. It's definitely worth taking a little time to plan for next year's success.
Here is a list of the top management techniques, products and services which tend to have the fastest return on investment for most farms.
  1. People - Always invest first in Family, Partners, Employees, and your Community.
  2. Seed – Use The Best Genetics / Hybrid Placement.
  3. Fertilizer and Nitrogen - High fertility equals high yields
  4. N Stabilizers / Crop Insurance / Crop Protection Products - Protect Your Investments
  5. Financial / Marketing Consultants - Manage Risks / Capitalize on Opportunities
  6. Equipment & Precision Technology  – Timeliness, Accuracy, Efficiency
 If you have significant profits in 2011, be sure to replenish opportunities with the right investments for success in 2012.
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COMMENTS (1 Comments)

To think, I was cnousfed a minute ago.
11:41 PM Oct 31st

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