How Not To Have Beef With Your Farm’s Finances

The sad reality is that a lot of farms lose money. It’s one of the many things people don’t tell you before you commit to the lifestyle. So, there’s a good chance that you’re finding money is a little tight at the moment. The temptation is to assume it’s the way of industry and to tighten your belt, but that is wrong.

The truth is farmers don’t turn a profit because of their own mistakes. It’s not nice to hear, yet it’s the reality in most cases. With that in mind, it’s time to squash the beef and shake hands and be friends.

Here are the ways you can do it with minimum hassle:

Review Supplier Contracts

Farmers need suppliers to cultivate crops and look after their livestock. However, there is no reason to let them dictate the terms. Sure, they have some leverage but they need your custom too. Without your investment, their bottom line will suffer. As such, it’s important to review supplier contracts, check your USDA property eligibility, and renegotiate them every couple of months. Has the rate of inflation increased? Has there been a price hike? Are there extenuating circumstances? Take all of these into consideration before speaking to a peer and asking for a price reduction. Also, shop around for a better deal.

Photo by Jed Owen on Unsplash

Don’t Waste Equipment

You have spent a small fortune on machinery which (hopefully) will change the farm’s fortunes, only for it to sit idle. You don’t need telling that this is a huge waste of money. To get value for your investment, it’s vital that they operate daily without any complications. On a basic level, rivercountry.coop can help by providing the right fuel. It’s amazing how many tractors rust in fields because their tanks are empty. Secondly, maintenance is essential too. Apriso.com has many tips, but the main one is to keep up with the training aspect of things.

Keep Separate Records

One of the reasons finances take a hit is that of a lack of organization. Thanks to the fact that farmers work from home, they keep all of their records together in a nice, neat pile. Of course, there is no way to tell what is what at the end of the year when the accountant does his/her analysis. That is, of course, if you have one. Without thorough record keeping, there is no way to tell what you are spending and where you can cut back.

Never Do Nothing

When there is a drought or a flood or some circumstance unforeseen, there’s a tendency to stand still. It’s as if you can see what’s happening yet can’t react in time. Unfortunately, this is a farm killer because the damage is done before you can react. So, the best thing to do is to come up with a plan in case of emergencies. That way, it’s possible to limit the damage and save some of the farm rather than let it all crumble.

A disaster never seems as if it will happen to you, but are you that lucky?

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.