By Brian Hefty

I have been a full-time agronomist for over 25 years now, and since I’ve heard the question, “Brian, what can I do to cut my costs this year?” about a zillion times, I feel like a little bit of an expert in this department.  Here are my top six ways to improve your bottom line in 2016:

  1. LEARN MORE.  The more information you have about anything you spend or invest on the farm, the better chance you have to make money with what you spend and save money with what you choose to cut.  There are many sources of information out there, and you have to be a little careful about who you listen to.  If you want more information and data from us, we have a number of ways to help you including Ag PhD TV, Ag PhD Radio (we take your live phone calls at 2 pm Central every weekday!), Ag PhD Agronomy Workshops & Soils Clinics & Tiling Clinics, the Ag PhD Field Day, Ag PhD apps (we now have over a quarter of million downloads of our free apps), www.agphd.com, and www.agphdsoiltest.com.
  2. DO MORE YOURSELF.  One of our most important goals is to help you do more yourself in your operation so you can increase your profit.  My dad used to call these “$100 an hour jobs”.  Whether it’s doing your own spraying, planting, harvesting, tiling, tilling, fertilizing, scouting, soil testing, or any other “$100 an hour job”, these are all things that are lucrative for your bottom line.  If you need help learning how to do any of these things, we can assist you.
  3. DON’T SACRIFICE QUALITY FOR PENNIES.  It’s hard to save your way into prosperity.  The way farming has almost always been is the highest yielding operators make the most money.  It’s great to save a little on seed, chemical, and fertilizer, but see point number one.  The first thing you need to do is understand what you really need and try to figure out if the high-priced option will make you more money or not.  A good example right now is in soybean herbicides.  People complain when I say, “Use three pre’s”.  Well, three pre’s only cost $10 to $20 depending on your soil type, tillage method, product selection, and the rates you use.  Sure, if you don’t have any resistant weeds, it’s not a huge deal; but even then this investment will likely pay for itself in better weed control leading to higher yields.  Don’t get me wrong on this point.  I’m not saying don’t try to save money.  What I am saying is if you can only save a little bit in exchange for a lot more risk, it’s probably not worth it.
  4. BUY EARLY.  On average you will save 5 to 10 percent when you buy in November or December vs. spring.  Smaller farmers often tell me they are concerned about how they compete with larger farmers, but the first thing I always tell them is larger farmers often don’t have enough cash to prepay for all their inputs.  Right there you will save 5 to 10 percent, which in some years is a really big deal.
  5. START BY CUTTING THE BIG THINGS.  It’s great to try to save 10 cents on Roundup, but how about saving $20 per acre on something instead?  Other than rent, your biggest cost is likely fertilizer.  I’ll bet I can save you $20 an acre on fertilizer with two things.  First, use the free Ag PhD Soil Test app and sample your fields yourself.  Yes, you’ll have to pay for the testing, which at Midwest Labs averages out to just over $5 per acre on 5-acre grids, but here’s what that does for you.  You will now know what your soil needs (you’ll get our recommendations and Midwest Labs’ recommendations for free), and you control the information.  You’ll know where and how all your tests were pulled, so no one else can tell you that you need something you don’t.  Second, start applying your own fertilizer.  You can buy semi-load lots of dry or liquid fertilizer, have it delivered right to your farm, and spread it yourself.  We’ve done this for 20 years, and it has saved us more than $1 million during that time.  Plus, with today’s technology everything is pretty easy.  You can equip your fertilizer spreader, planter, strip-till machine, anhydrous bar, or almost any other tool to vary your fertilizer rate automatically based on simple prescriptions you can write yourself in 3 minutes per field using our Soil Test app.  We can even show you how to do it.
  6. EARNING MORE IS MORE IMPORTANT THAN SAVING MORE.  Instead of talking about cuts, focus on improving profits.  Make sure you don’t cut things that are making you money, but by all means reduce your costs on things that don’t give you a good return.