38 March 26, 2015 2015 Logan County Farm Outlook Magazine Lincoln Daily News.com
Labor
Farmers may be thinking of reducing the amount of
farmhands that they bring on to help with the everyday
operations of a farm. However, with a reduction of
labor comes a greater demand on the farmer himself.
This may not necessarily result in a poor product
in the same vein as saving on seeds or pesticides.
However, the toll of such savings could be a loss in an
emotional sense, creating stress for the farmer and any
family they may have. As a result, the savings kept
from not paying farmhands may be needed for medical
expenses in case of injury or stress-related problems.
Farmers looking to purchase new machinery with
last year’s profits may decide to hold off on buying
new parts or vehicles.
That certainly makes
sense, given the high
cost of such equipment.
However, holding off on
new mechanical purchases
assumes the risk that
existing machines will
not break down due to age or wear and tear. On top
of that, many modern machines come with digital
technology that operates them, which requires constant
maintenance. Is it necessary to keep upgrading every
year? Not necessarily, but this measure of savings
comes with a very high potential cost. On a related
note, some farmers may decide to stretch
their schedules on routine maintenance, such as oil
changes or part replacements. Much like owning a
car, scheduled maintenance can be altered, but routine
maintenance can often prevent expensive problems
down the line.
Crop insurance can
be a major cost for
farmers. According
to estimates provided
by the University of
Illinois, premiums for
crop insurance are set
to be higher for 2015
than in 2014. Some
farmers may decide to forego crop insurance in an
attempt to save on expenses. There is nothing stopping
them from doing so, but, as is the case with any type
of insurance, it only takes one emergency to make
someone rethink. The year a farmer does not buy
insurance could also be the year a late frost with no
opportunity to replant, freak flood, prolonged wet and
cold conditions, drought, tornado, straight-line winds,
hail, fire could all decimate hundreds of acres.
The above are all ways in which farmers could try to
cut down on their costs to recover after a year such
as 2014. Unfortunately, while these measures do cut
down on expenses, each one comes with multiple risks
that carry potential greater loss of profits.
Machinery
Crop Insurance
Story by Derek Hurley
