Producers must consider farm costs as well as family costs in order to accurately gauge their
financial health, notes Jerry Gulke, president, The Gulke Group.
“What’s the bottom-line cheapest cost of production I can arrive at if I just look at my actual cash
expenses?” Gulke asks. “In other words, what does it take me to put the crop in and take it off, and
will I make enough money then to worry about buying new machinery or doing new tiling or my personal
expenses for living?
“I don’t subscribe to the idea that just because I’m in the farming business that the farm owes me a
3% or 5% return to management.” In Gulke’s view, capable producers will obtain returns from what
is left over after they pay everyone else. In tough times, families must identify places to cut.