Amid economic uncertainties, policy changes, and other factors impacting production costs, finding proactive ways to reduce expenses can make all the difference for American farmers when it comes to surviving off-season.
Farmers understand that several factors that are sometimes outside their control impact the success of their operations. Rising production expenses are one of the most significant challenges faced by the farming industry. While commodity prices are strengthening, input costs are also substantially increasing.
Although inflation has been dominating production costs for several years, supply chain bottlenecks during the pandemic amplified the rising costs for many essential supplies like seeds, fertilizers, and equipment. According to a report by the USDA Economic Research Service, expenses are projected to increase annually by 7.4%, which is higher than any previously recorded production cost estimations.
Although farmers cannot control these external factors, they can control their response. Factoring in rising production expenses is crucial to preserve working capital and making profitable decisions for farming operations.
Here are six effective money-saving strategies that are proven when it comes to reducing the overall cost of production.
#1- Avoid Premium Prices by Being Thrifty
Even if you can afford to buy everything you need to run successful operations at your farm at peak prices, you shouldn’t. Reduce costs significantly by purchasing the essentials off-season. If you plan to maintain the quality of seeds by storing them correctly, consider pre-purchasing them before the next season to score discounted prices from suppliers.
Similarly, you can buy used or new equipment and parts from reliable companies that buy and sell farming equipment. If you’re looking for irrigation supplies, look no further than Flatwater Sales Inc.
They stock new and used center pivots, snap boots and cable, solenoid valves, pivot tires, control panels, running lights, U joints,and other parts. You can get discounted prices for other irrigation equipment as well, including kifco and rainbow pumps, big gun sprinklers on wheels, lima mac generators, motor lead cables, collector rings, rainwater reels, and several other components. Give them a call at 402-300-3113to get more information about their solutions that are ideal for improving yields and safety at farms.
#2- Track Expenses
All agricultural businesses need to incur costs, but they don’t need to be addressed collectively. Evaluate the investment requirements and plan the expenses according to the ones that feel more urgent compared to those that can wait until later.
Data management solutions help keep track of all the details, allowing you to get an accurate picture of how the farm is doing overall. Create separate budgets for short-term and long-term viability before deciding what is needed to reach the current and future goals. Determine areas with opportunities for reduced input as well as places that would benefit from increased input.
#3- Explore Assistant Programs Offered by the Government
Loans and grants can be incredibly helpful for softening the financial blow when you’re struggling with hefty investments necessary for profitable and sustainable operations. For instance, the USDA and the Farm Service Agency rolls out several programs targeted at helping businesses in the agriculture sector. These programs make improvement projects more attainable for farmers.
#4- Conserve Resources
Evaluate all the methods your farm utilizes for crop residue, livestock water, irrigation, and pest control. It could reveal hidden money-saving opportunities in terms of fuel, equipment, and labor without any significant impact on your farm’s operations. There are many conservation management practices that can improve profitability while also assisting you in qualifying for several cost-sharing programs.
#5- Invest in Alternative Energy Sources
Save energy costs in the future by investing in solar panels and wind turbines for smart farm management. Run all the agricultural machinery and farm equipment on power created by solar panels or wind turbines. Alternative energy solutions have come a long way in the amount of electricity they generate, which helps reduce energy expenditures significantly.
Selling back to the power grid can also become a potential revenue source. Put your outbuilding and barns to work and enjoy the new revenue stream, along with controlled utility costs. If the alternative energy infrastructure investments seem overwhelming, consider all the incentives farmers can get for going solar.
Tax-saving is also possible as you can write off the alternative energy equipment just like other heavy equipment is depreciated. The cost-shared expense nature of the investment means the NRCS EQIP, federal Investment Tax Credit, USDA REAP grants, and other municipal or local incentives have got you covered for a major chunk of installation costs. All of them can help maximize ROI with shorter payback periods.
#6- Schedule Regular Maintenance to Keep Machines in Good Shape
Capital investments are significant in both impact and cost. All machinery is essential to successful farming operations and preventing downtime. Make equipment and machine inspection and maintenance part of the routine to extend their life expectancy and performance.
Create a practically achievable plan and stick to it. Don't forget to include animal barns, crop storage and drying units, and ventilation, insulation, and cleaning systems. Servicing belts and motors at regular intervals help ensure all equipment performs at peak efficiency and extends the cost amortization as well.
#7- Invest in Cost-Effective but Quality Equipment
Purchasing the least expensive equipment can be tempting when you’re trying to save some bucks. But this could backfire severely if the equipment constantly breaks down, requires costly repairs, or doesn’t perform as per the standards.
Investing in high-quality equipment is key to keeping a farm running at its peak without hiccups. This will put you in a position to reap considerable savings on replacement or repair costs. If you’re ready to cut costs around the farm with outstanding irrigation equipment, Flatwater Sales Inc. offers new and used farming equipment at competent prices!
The buying and selling marketplace is run by experts who believe farming isn’t only a job but a way of life. It’s an important industry that supports the global food supply and provides jobs to many people who deserve safety when using equipment to improve yields.
The company has quickly made its name as one of the leading center pivot contractors with a loyal client base across the US. They can provide you with a wide range of solutions to keep your farming operations running smoothly—all while ensuring top optimal safety, productivity, and longevity.
Reach out to them to invest in high-quality equipment, parts, and solutions, at some of the most competitive rates in the market.
