7 Steps to improve profitability in agriculture
To improve profitability in an increasingly competitive and
uncertain environment, farmers must have a better understanding of their profit
drivers and road management strategies in place. For many, price will have the
biggest impact on revenue, but small changes across businesses are often
achievable and can have a significant impact on revenue. For example, in our
study, a 10% increase in price and production combined with a 10% decrease in
costs will double the cost.
1. CONSIDER CREATING YOUR OWN LIST
If you raise cows for meat or milk, you can save money by
growing grass, corn, soybeans or oats. When you grow your own food, you also
know exactly what you are feeding your pets and can adjust your diet to meet
their needs. Be sure to pay for any additional equipment you may need if you
have not grown these crops.
2. IMPROVE YOUR INCOME
No crystal ball can show you how to grow healthy fruit. But
you can research local and statewide cropping systems to look for
opportunities. You can also focus on methods that improve yield, such as
improving your soil health, effective weed control, and using sensors to
monitor the health of your crops.
3. PROTECT YOUR EQUIPMENT
It’s no secret that taking care of your machinery and
equipment can save you money. But now, sustainable supply chain issues can make
it difficult to replace your equipment with new models. Organize pre-harvest,
post-harvest and post-harvest planting programs to extend the life of your
machine.
4. MANAGE YOUR RISK
By changing your crops and livestock, you can improve your
performance and reduce your financial risk. You can also look for vertical
integration opportunities – livestock processing or crop transport, for example
– that can reduce the impact of uncertainty on your agricultural business.
5. REFINANCE YOUR DEBT
If you have a lot of loans, you can save money and time if
you approve your farm loan. You may also have the option of extending your
payment term so you can make lower payments when you don’t have a lot of money.
But if you are paying high interest rates, you may want to consider refinancing
your loan at a lower rate.
6. DEVELOP A NEW ENERGY
Renewable energy can increase farm income and secure energy
sources for the future. Determine if your farm is suitable for one of the following
renewable energies:
• Micro-hydropower projects
• Solar panels, geothermal heat pumps or electric heaters
• Air conditioner
• Grow trees, tropical forests and short rotation crops as
biomass fuel for supply or sale.
• Installation of anaerobic digesters to produce methane as
fuel for electricity or heat
7. OPTIMIZATION OF ANIMAL INDUSTRY
Livestock production is a major part of Scottish
agriculture. Effective management can help reduce impacts on climate change.
- Develop and monitor
animal health plans for all your pets -
Increased
reproductive longevity; seeking a higher return per unit of training -
Improve list
conversion performance; gain good weight every day -
Increased efficiency
in livestock breeding -
Wherever possible,
cover and keep the slurry and food cool during storage -
Consider anaerobic
digestion of feed and slurries from all livestock
