Page 19 2024 Logan County Spring Farm Magazine LINCOLN DAILY NEWS March 2024 Costs are broken down into categories including one of direct costs such as seed, chemicals, seed, drying, storage, and crop insurance. Power costs are another area including machine hire, repair, depreciation, fuel and oil, utilities, and a small charge for a light vehicle. The last area is overhead costs consisting of hired labor, building costs of depreciation and repair and rent, insurance, and interest costs. The financial goal is to pay for all costs and have enough left to continue investing in the business and be able to cover family living expenses. Some expenses are not encountered by various growers, while others have additional costs. One of the largest variables is the percentage of land owned by the producer. Owning significant percentages of the ground you are farming allows for production at a lower cost, compared to another producer who farms mostly rented ground. Of course, this also assumes the rented ground costs significantly more than the ground owned. Like many business owners, farmers will make decisions to help the bottom line as their economic situation turns. Maximizing income and minimizing costs are the goals. The trick is to accomplish this without harming your long-term earning potential. Not applying needed fertilizer will save money in the short term but will affect income negatively in coming years. Delaying major purchases will save money now, but if the tractor you were going to replace needs major repairs during a critical time such as planting, it could be a very expensive decision. Each operator will make the decisions best for their operation. There is always hope for increased income as well, particularly if there are widespread weather concerns. We are in a true global market, so concerns can be at home or abroad. This isn’t the first dip in the farm economy, and producers have dealt with similar situations before and will deal with the present situation as well. [John Fulton Agriculture Consultant Lincoln Daily News]
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