How to improve farm profits?

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Generating profits should influence most decisions as a farm manager. Many things affect the level of profit. This, in turn, determines remuneration for the operator’s management & labor, the growth potential of the farm business, and the ability to pay off debt. A good farm manager should ask himself/herself the following questions often.

• Am I making the most profitable use of my land and structures with the agricultural enterprises I have chosen?
• Are my operating inputs at the optimal level?
• Is my equipment the proper size for my farm?
• Do I acquire the most favorable terms on borrowed money?
• Does my borrowed money earn a rate of return greater than the interest rate I pay?
• Are my field operations timely?
• Do I plan and carry out good marketing strategies?
• Do I make good use of my time and hired labor?
• Do I take advantage of new technologies?
• Do I maintain good business relations with others?
• Do I manage my taxes to increase after tax income?
• Are my operator management and labor allowances reasonable?
• Am I allowing my farm operation to grow by putting back some of my profits into the business?

There is no one clear path to improving profits. Rather, profitability is a state of mind in which a farm manager carefully controls every aspect of the operation to make the most profitable and economic use of the resources available to the farm business.

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