How to Improve Your Farm’s Profitability

Apr 14, 2022 1 min read

When you’re farming for profit, you’re also running a business. In business, it is always crucial to pay attention to your bottom line, and it’s even more critical when high inflation increases your costs. Here are six areas that can help you focus on how to make your farm profitable.

1. Consider Growing Your Own Feed

If you’re raising livestock for meat or milk, you may save money by growing your own hay, corn, soybeans or oats. When you grow your own feed, you also know precisely what you are feeding your animals and you can customize your feed to meet their needs. Be sure to factor in the costs of any additional equipment you may need if you’re not already growing these crops.

2. Improve Your Crop Yields

There’s no crystal ball that can show you how to improve crop yield. But you can research local and statewide planting trends to look for opportunities. You can also focus on tried-and-true yield improvement techniques like making your soil healthier, managing weeds effectively and using sensors to monitor the health of your crops.

3. Maintain Your Equipment

It’s no secret that taking care of your machinery and equipment can save you money. And now, ongoing supply chain issues can make it harder to replace your equipment with new models. Set up a regular schedule for pre-planting, pre-harvest and off-season maintenance tasks to extend the life of your machinery.

4. Manage Your Risks

By diversifying your crops and livestock, you can make your farm more productive and reduce your financial risks. You can also look for opportunities for vertical integration — processing livestock or transporting crops, for example — that may reduce the impact of uncertainty on your farm business.

5. Restructure Your Debt

If you have multiple loans, you may be able to save money and time if you consolidate your farm debt. You might also have the option to stretch out your repayment timeframe so you can make lower payments when you don’t have as much cash available. And if you’re paying high interest rates, you can consider refinancing your debt at a lower rate.

Prepare for the Unexpected

You can take every possible step to increase your farming profit margins, but it’s still crucial to protect your assets and your livelihood. A local Farm Bureau agent can discuss your needs and find the coverage that can help your operation withstand the growing costs of running a farm, from workers’ compensation to farm and ranch insurance.

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.