We have all heard that a penny saved is a penny earned, but in today’s farming climate of ever-fluctuating input costs and grain and livestock prices, pennies are hard to earn and save. Here are some strategies to deal with higher farming costs for both grain and livestock farmers.
STRATEGIES FOR GRAIN FARMERS
1. Consider increasing on farm storage, which would allow you to buy inputs when they are cheaper in off-peak season and store until needed. Once the initial expense of putting up extra storage is covered, you will be able to take advantage of savings in future years. In addition, any new storage would be capital, so it would be written off over the future years, giving you additional tax saving opportunities.
2. Save labour and fuel by using the most efficient tractor possible with your seeder. If you have a tractor that could easily pull a larger seeder, consider increasing the size of the seeder. For example, if you change from a 40-foot seeder to a 60-foot seeder using the same tractor and a bit more fuel, you will cover more acres per hour, reducing your per-acre fuel and labour costs.
3. Utilize new technologies such as GPS guidance and variable rate application. With GPS-guided autosteer, you will limit overlap, which can significantly reduce your costs — not only of product applied but also time and labour to do the work. Variable rate application, based on soil tests and yield maps, can increase the return from your input dollars.
4. Conduct soil tests to ensure that the fertilizer application is optimal for each field and only applied where necessary.
5. If possible, use zero till to cut down passes to save fuel and labour costs.
6. If you are only swathing because you do not have a straight cut header, you should consider buying one to cut out one pass.
7. Join up with a group of farmers to see if it is possible to get a bulk deal on fertilizer from different sources. A group of Alberta Hutterites and farmers used this strategy to import fertilizer directly from Russia, by getting enough orders to fill a ship. (This was reported in the Western producer.)
8. Only go to town when necessary and combine journeys. Among a group of farmers, alternate the responsibility of going to town and collecting items for each other.
9. Take advantage of seed technology. Seed with the latest in disease resistance or herbicide tolerance may cost a little more up front, but it could reduce the need for disease control sprays and will give you lower-cost weed control.
10. Consider spot sprays for weeds or disease. If you have infestations concentrated in just a few areas, target those areas instead of the whole field. Scout the field to ensure that any spraying is absolutely necessary.
11. Save on repair and maintenance by deciding whether it is cheaper to run older machinery or buy newer machinery. How much downtime will you have with each option?
12. Buy a seeder with a neighbour to spread out the equipment and labour costs over more acres. Seed one farm first one year and the other farm first the next, with each farmer driving the support vehicle for the other.
13. To stay efficient and become bigger, you must have reliable equipment. Having an old combine that breaks down and results in loss of wheat quality may cost more than buying a newer combine that would be reliable.
STRATEGIES FOR LIVESTOCK PRODUCERS
1. The longer you can extend grazing season, the less feed you will have to carry to the livestock, thereby the less fuel, labour and wear and tear on equipment. By using swath grazing or bale grazing, the livestock go to the feed.
2. When checking pastures in the summer, use the most fuel-efficient vehicle, such as an ATV. Using an old truck will use more fuel. This suggestion comes from the Samuel Roberts Noble Foundation study: www.noble.org/Ag/Economics/CostProduction
3. Cut fuel costs by only putting older bales through the bale processor. The livestock will always eat the good bales.
4. Figure out ways to put out a week’s worth of hay all at once. That way you only have to start the tractor once a week to do that job. You could put moveable electric fence around the bales. Or you could rotate the cattle through different paddocks, which can be accessed from the main yard.
5. Calving in late spring when grass is coming would eliminate possible weather-related difficulties, such as having to put calves in hot boxes to prevent freezing after birth.
6. If possible, grazing a neighbour’s stubble fields would give the grain farmer the benefit of the manure, and give the livestock farmer an extended grazing season.
7. Consider sharing equipment. Does it make sense for each neighbour to have his/her own small baler? Or would it make more sense if all the neighbours bought a large baler between them. A large baler could bale faster and be used by each neighbour in rotation.
8. When making hay, double up the windrows with a hay rake or with a side-discharge mower. That way, you can bale two rows simultaneously to save time and fuel.
9. Poor quality hay costs the same to make as good hay.
10. For both grain and livestock, use the want or need principal. Do you want a particular machine because it is the new thing? Or do you really need it?
Karen Cartwright is with BDO Dunwoody LLP in Virden, Man.