2015 Logan County Farm Outlook Magazine Lincoln Daily News.com March 26, 2015 37
Lowering your
costs may
increase your risks
2
014 was a great year for Illinois farmers in
terms of production. Record-high numbers
of acres of corn and beans were with record
breaking bushels per acre yields were harvested.
However, while crop yields were high, the
financial return was lower than anticipated. Prices
dropped considerably as the harvest season moved
on.
As is the case with any business, the goal of
farming is not just to produce a product but to
make a profit while doing so. Illinois farmers
will no doubt be looking for ways to minimize
potential losses in the future and make up for
losses suffered after years such as 2014.
One way to minimize potential losses in the
business world is to reduce costs going into
production. Illinois farmers will be looking at
their budgets and cutting costs where they can
to help secure a greater profit. Again, this is a
standard way of thinking in the business world,
but such a way of thinking does not come without
its own risks.
There are several areas of expenditure that may
come to mind when looking to save money in the
field:
A farmer may likely consider trying to expand their
farm ground in order to bring in a potentially higher
profit at the end of the season. Theoretically, a greater
amount of product sold would make up for a lower
price of sale. However, as we have seen after 2014, that
line of thinking is not favorable for more than one or
two years in a row. Additionally, farmers would face
the increased cost to operate a greater amount of acres.
The alternative is to reduce the amount of land farmed
to try and negate potential losses, but such a move will
also reduce a potential profit even farther should the
price be too low at harvest.
The expense of pesticide
could be reduced if a
farmer decided to use
a different brand of
chemical. However,
cheaper pesticides are
similar to other cheaper
merchandise in the
sense that buying cheap
is not always smart. A
cheaper pesticide may
be cheaper for buyers
because it costs less to
manufacture, which
means the ingredients
may not be as effective.
In addition, crop ailments may become more resistant
to pesticides as years go on, and switching to a cheaper
(but potentially less effective) formula may not protect
the crop and profit.
Seed, much like pesticides, should be approached with
the same method of thinking. Cheaper seeds, much
like cheaper foods in the grocery store, may not come
with the same quality of product in the long run,
which may result in lower quality and quantities to
market after harvest.
Overall acreage
Pesticides
Seeds
Continued to page 38
