Farm profitability analysis can help producers make decisions that will either earn more money or the same money with less work. Ultimately, there’s no point in doing the analysis if it doesn’t influence and change business behaviour. Budgeting Carefully select the crops you wish to grow. Don’t seed 300 acres of oats out of habit, […] Read more
Stories by Dean Klippenstine
Analyzing capital structure enables better investment decisions
There are several things to look for when analyzing farm profitability. Gross margin and the farm’s spending on labour, power and machinery are obvious measures, but this week I want to talk about land, building and finance (LBF), which focuses on the capital structure of the business. Rental costs of land and buildings, interest costs […] Read more
Understanding cost per acre ensures profitable expansion
Producers spend a lot of money on labour, power and mach-inery. Management has the most control over this category of expenses. When analyzed together, it can give producers a clear picture of the real cost per acre of their operations. Unfortunately, many operators still wrongly believe that these costs — especially machinery, which is often […] Read more
