2020 Fall Farm Outlook

2020 Logan County Farm Outlook LINCOLN DAILY NEWS October 28, 2020 PAGE 11 F arming can be costly especially with so many factors beyond your control. Finding ways to cut costs to reduce debt can help increase your income. Vice President and Farm Manager David Irwin at State Bank in Lincoln said the easy answer to making money is to take in more money than you spend. However, Irwin also said that is not a blanket answer due to many variables. David Irwin Making more money For example, the prices set at the Chicago Board of Trade and prices at the local elevator are usually different. Farmers are “price takers, not price makers” Many factors go into the difference between the board of trade price and the price the farmer receives at the local elevator, also known as the “basis.” With low commodity prices, Irwin said it can be hard to control what you are bringing in. Other variables are connected to how long someone has been farming. In this case, Irwin says, older, more established farmers may have built up wealth and net worth and can come to him for working capital “if their balance sheet allows.” Because they are established, their costs of production could be less due to being able to take advantage of some better discounts on inputs and not having to borrow large sums of money to buy those inputs, therefore saving on interest costs. These farmers are often able to offer some collateral and restructure their balance sheet. CONTINUE X