Evaluating Input Costs: Part of a Smart Financial Strategy

With no market relief in sight for the foreseeable future, evaluating your input costs is something producers should consider on an ongoing basis. From the amount of fertilizer to experimenting with different seed varieties, there are so many input costs that impact your bottom line. These things need to be considered by every producer.
 

Should you prepay for your inputs or hope they decrease in price through spring? 

Keep the dialogue with your input suppliers open throughout the growing season and beyond to get their thoughts on the trends in the inputs and their availability this fall compared to next spring.

Are you paying the same rent for lower quality land as you are for higher quality land? 

Another major input cost — land cost — is always important to evaluate. Looking at the yield on each field should determine if rent for that acreage is in line with its overall profit potential. If you're not diligent on determining your breakeven on each farm, you may be subsiding a specific farm, impacting your total-farm breakeven. 

The goal of farming is to provide a profit for your family living needs. We in agriculture are so fortunate to have the privilege of doing something we enjoy while providing for our families. Making sure we understand our break evens on all units is key if we want to not merely survive, but grow and build a sustainable legacy for future generations.