Farming is always rewarding in itself. There is a tangible sense of satisfaction that comes with watching your crops grow, nurturing them, and then harvesting the fruits of your labor. However, there is also a business side to farming. After all, in order to be able to produce all of your crops you need to make a lot of investments before, during, and after the harvest, which is why it’s important to keep your expenses and profits in mind. In this article, we will discuss seven business tips for farmers that can help them estimate their costs and revenue.
1. Online Calculators
First thing’s first. You need to know your costs in order to make a profit. There are many helpful online calculators that can help you estimate your costs of seed, fertilizer, equipment, land, labor, and more. The good thing is, there are specialized calculators for basically any crop. From a corn yield estimator to a hops price per pound calculator, you can find the information you need with a few clicks of the mouse. These calculators will let you know what your break-even point approximately is, how much you need to charge for your crops in order to make a profit, and more. The more advanced versions will also help you calculate how to improve your crop yield based on certain inputs such as fertilizer type and rate, planting date, and more.
2. Market Predictions
Just like in any other business, it’s important that you try to predict what the market will need, preferably before you plant your crops. You can do this by reading industry journals, attending trade shows, and talking to buyers. This information will help you determine what crops to grow, how much to produce, and when to bring them to market. If you grow multiple crops but have invested more in one type that’s not going to be as popular in the following year, you might want to look into getting a financial credit for agriculturalists in order to help you cover some of your costs, and invest in your secondary crop. The farming business is pretty competitive, which is why you need to spend time and money on market research and further investments, respectively, in order to stay ahead of the curve.
3. Know Your Strong Suits
As a farmer, you need to know what your strong suits are. Perhaps you have very fertile land that’s perfect for growing corn. Or maybe you live in an area with a longer growing season, which gives you a leg up on the competition when it comes to tomatoes. Use your strengths to your advantage and grow crops that will be in demand and that you can produce efficiently. The best way to identify your top skills and products is to talk to other farmers, attend farming conferences, and read industry publications. When you stay in the know – both when it comes to your potential partners and competitors – you can better understand where your business fits in the market, and what you need to do to succeed. Of course, the numbers speak for themselves as well, so make sure to track your expenses and revenue carefully over time to see if you’re trending in the right direction.
4. Plan For Possible Disruptions
A lot of people focus solely on their crop production when it comes to their farming business, but they forget about other important aspects such as storage, processing, and shipping. All of these steps are crucial to getting your crops from the farm to the grocery store – and things don’t always go as planned. Disruptions can happen during any stage of the process, which is why you need to have a contingency plan in place. For example, if your crops are ready to be harvested, but the storage facility is full, you need to know what your options are. Perhaps you can find another storage facility or sell your crops at a discount. Whatever the case may be, it’s important that you have a plan B – and C – in place in case of disruptions.
5. Welcome Change
The farming industry is constantly evolving – new technologies, new methods, and new markets are always emerging. As a farmer, it’s important that you welcome change and adapt to the ever-changing landscape. Otherwise, you’ll quickly fall behind your competitors. One way to stay ahead of the curve is to attend farming trade shows and conferences. This is a great opportunity to learn about the latest trends and technologies and to network with other farmers. You can also read industry publications and websites to stay up-to-date on the latest changes. Another way to adapt to change is to be open to new ideas. If you’ve been farming a certain way for years, and it’s no longer working, don’t be afraid to try something new.
6. Have a Solid Business Plan
Last but not least, it’s important that you have a solid business plan in place before you start farming. This document should outline your goals, strategies, and financial projections. It will serve as a roadmap for your business and help you make decisions along the way. If you’re not sure where to start, there are plenty of resources available online, such as templates and tutorials. And if you need help putting your business plan together, don’t hesitate to reach out to a financial advisor or other business professionals. Your business plan should have both long-term and short-term goals, and it should be reviewed and updated regularly to reflect changes in the market and your business.
7. Stay Organized And Keep Good Records
Farming is a complex business, so it’s important that you stay organized and keep good records. This will help you track your expenses, understand your costs, and make informed decisions about your business. To be more precise, you need to keep track of the following:
- Your expenses – including what you’ve spent on seeds, equipment, labor, and other costs.
- Your revenue – how much money your crops are bringing in.
- The percentage of yield for each type of crop.
- The average price per pound for each type of crop.
When you have this information at your fingertips, you’ll be able to make better decisions about your business. For example, if your revenue is low for a particular crop, you might want to consider growing a different crop next year. There are a number of software programs available that can help you with this, but a simple spreadsheet can also do the trick. Just make sure to update it regularly.
Farming is a rewarding and challenging business that comes with its own set of unique costs and revenue streams. By following these seven tips, you can better estimate your costs and revenue, plan for disruptions, and stay ahead of the curve. With a solid business plan and good record-keeping, you can set your farm up for success.
