One way producers can maximize profits in lean years is to divvy up their farms into three categories, explains Chris Barron, an Iowa producer and Top Producer columnist.
“How valuable is it to keep the farm you know isn’t producing?” Barron asks.
Rather than becoming stuck, a producer with 10 farms might align each location into one of these columns:
- Upper Third: High productivity, consistent, correct scale
- Middle Third: Breakeven, medium productivity, some consistency/location/scale
- Lower Third: Lower productivity, inconsistent, poor location or scale
In some cases, a producer must hold onto farmland. In other cases, though, sorting out higher-performing farms from lower ones can enable farmers to make adjustments or remove certain locations from the operation.
“It’s about return on investment for each individual farm,” Barron notes.
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