2020 Fall Farm Outlook

PAGE 14 2020 Logan County Farm Outlook LINCOLN DAILY NEWS October 28, 2020 Finally, Anderson suggests offering services such as “custom planting” and “spraying” at a lower price than others. Other ideas are to “clean driveways” or “hay ditches.” While you are trying to reduce debt and make more money, there are several mistakes you should avoid. The Agamerica article “Decrease Your Farm Production Costs by Fixing these Five Common Mistakes” shares several tips for reducing debt. The first mistake the article mentions is “too much diversification of seed purchases.” This problem may occur when farmers go to a variety of suppliers and buy small quantities of seed. One fix is to “consolidate your seed purchases.” That can be done if you buy from “the two or three highest performing brands or companies” that offer what you are looking for. After that figure out which places give you “the highest return on investment.” When possible, negotiate discounts on these purchases. The second mistake is “spending too much on chemicals such as pesticides and herbicides.” This mistake can be corrected if you evaluate, analyze and research “generic chemical alternatives.” The most expensive chemical is not always the best. The third mistake occurs when people buy unnecessary machinery and equipment, which could cost them thousands of dollars. Before making a purchase, it is best to evaluate whether you really need to replace the equipment. You may be better off doing repairs on what you have and postponing purchases. The fourth mistake happens when people pay too much cash rent on farmland. That can be corrected by talking to landlords to see they are willing to “incorporate a flexible rent structure” and lease. The fifth mistake is “failing to minimize cash flow by insufficiently paying off debt.” A fix is to “optimize your farm’s balance sheet and restructure your farm’s debt.” Knowing your financial standing can help you decide whether you may be able to refinance loans. Fortunately there are many options for lowering your debt. Knowing the best options for financing, how to ease your debt load and mistakes to avoid can help you reduce debt and bring in more money. As Scott Anderson says, “Debt is a stifling reality for any farm operation, but as you can see, there are ways to wiggle out of it—or at the very least, to keep your business afloat.” [Angela Reiners] Resources Successful Farming “Are You Successfully Managing Farm Debt?” by Shawn Williamson https://www.agriculture.com/news/business/ are-you-successfully-managing-farm-debt Farm Progress “Six Steps to Ease the Burden of Debt” by Scott Anderson https://www. farmprogress.com/blogs-6-steps-ease- burden-debt-10832 Agamerica “Decrease Your Farm Production Costs by Fixing These Five Common Mistakes.” https://agamerica.com/tips-to- reduce-production-costs/