Farm Profitability

As a farm manager, your two most underlying and important concepts that you should always be mindful of are generating profits and increasing profitability.    There are several things that you do whichy can affect your profit level, which subsequently determines your farming business’ growth potential not to mention your standard of living.

Here are some key questions that every good farm manager should ask himself / herself.

• Are my chosen building and land resources with livestock and crop businesses being put to the most profitable use?
• How about my operating inputs.  Are they running at optimal levels?
• Am I using the right equipment (size, etc) for my farm?
• Am I taking enough time to negotiate and acquire the best possible terms when it comes to borrowing money?  Does that borrowed money earn a rate of return that is greater than the interest rate that I pay?
• How timely are my field operations?
• Have / do I carefully plan and carry out sound marketing strategies?
• Do I make the best use of my time, and my hired labor resources?
• How well-learned am I in regards to new farming technologies?  Do I take full advantage of them?
• Is there any custom field work, or even off-farm employment opportunities that might increase my farm income?
• Do I strive to maintain excellent business relations and communication with others?
• Are my family’s living allowances sound and reasonable?
• Am I giving my farm operation its best opportunity for growth by putting back a portion of my profits into the business?

As you can see with the above questions, there are a lot of different roads that you could take to improve farming profitability.  Remember, profitability is a state of mind, one where a farm manager controls every aspect of the farming operation carefully in order to make the most profitable use of his / her resources.