Money Saving Tips

December 26, 2016 10:12 AM
 
Money Saving Tips

This year’s tight margins mean it’s time to take a critical look at how you’re spending money. Learn from three farmers who are putting a little more elbow grease into saving on inputs in 2017.  

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Letting the suppliers come to him, Dave Nichols is cutting costs by taking bids on common inputs. 

“I’ve been surprised,” he says. “I’m not saying they were overcharging in the past, but our nitrogen liquid fertilizer is half what it was two years ago.” (A drop in nitrogen prices helped too.)

It’s not always easy to shop around for the best deal because sometimes it means you don’t get to work with your local dealer or the suppliers you have long-standing relationships with, but for Nichols the savings have been worth it. “I’m sending a signal to our suppliers we’re partners and in this together,” he says.

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Using a combination of marketing and strategic cost cutting is helping keep Derek Haigwood in the black next year. 

He plans to hold onto his current equipment a little longer to cut costs, though he recognizes he’ll need to consider warranties and repairs in that equation. “I’ve traded equipment every year the past five years, but this might be the first year we don’t trade anything,” he says.

He’s keeping a close eye on the markets, too, looking for what he calls a “home run” opportunity to ship grain along the Mississippi River. “Make  up [the costs] in marketing,” he says.

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Corn and soybean farmer Vic Miller is putting a few more miles on his truck looking for good deals. “I’ve done a lot more shopping around this year,” he says. “It’s really important to be aware of prices and where I can find the best price.”

In addition, Miller says using flex leases on his farms helps make sure he and his landowner are getting fair prices. “We’ve used flex rent for four to five years,” he says. “You have to have a good relationship with your landlord—communication is the biggest issue.”

When commodity prices were high rent was in the $400 per acre range, but now that commodity prices have softened, he’s seeing much lower land rent, which allows him to maintain profitability.

Miller drives as far as 30 miles to look for good deals. He says a little extra work saved him $40 per ton on nitrogen compared with his former “go-to” supplier. He saved an extra $15 per ton on phosphorus and potassium by shopping around, too. “That adds up to several thousand dollars in savings fast,” Miller says. “It’s a matter of survival for all of us.”

He applies this same strategy when making repairs, too. “Bearings are bearings, I don’t need my tractor’s brand on the box,” he says. He performs nearly 100% of machinery repairs at home, too, unless there’s a computer-type repair that requires the dealer’s touch.

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