A wise old professor of farm management, whom I once studied under, taught us that this is the time of year when we should sit down and re-evaluate what we’ve done and what should be changed for the next production cycle. Since the old gentleman was not only a great teacher, but a very successful farmer as well (a rarity in higher education), I’ve decided to finally heed his advice.
He preached that the ways to increase prices received for output produced were both limited and complicated. Forward contracting and hedging on the futures market were two things that he tried his best to explain to our class, but it always seemed to me that these methods were much more applicable to crop farmers than cattlemen. That, plus the fact that I flunked the test over that material, made me realize that I should just continue to sell my product at the livestock auction barn. So… no change in marketing for the coming year.
The major part of his class that I did understand was related to controlling the cost of inputs into the farm operation. Since we can’t control prices to much extent, lowering the costs of our expenses should improve profits, right? Here’s my list… and my decisions on the big ticket items:
Fertilizer. I had to quit spreading commercial fertilizer on pasture ground about 4 years ago. With the huge increase in prices due to the so-called energy crisis, I calculated that the only land I could afford to fertilize was the acreage I was going to cut for hay. Some of my neighbors started using poultry litter as an alternative, but now that those prices have gone up to equal or exceed those of commercial fertilizer, it also seems not to be an option. I just called my fertilizer dealer and he informed me the prices will be significantly higher this year. Conclusion – I guess I’ll repair my old manure spreader start slinging it again – something for which my neighbors say I’m very proficient.
Fuel. Diesel prices continue to inch upward. About the only way to save fuel in my operation is to stop clipping pastures in the summer. But if I do that, then the weeds will certainly take over the farm – especially since I quit fertilizing. I could start putting off-road diesel into my pickup truck, but just yesterday I passed through a MoDOT checkpoint at the intersection of the state highway close to my home. The $1,000 fine and six months in prison doesn’t seem like a viable alternative, although the free room and board during my imprisonment would be a huge cost-saver. Conclusion – No change in my current operation.
Feed. My motto has always been, “If it’s not grass, my cows will pass.” About the only feed I buy is what grain I feed to the blind calf and three-legged cow that will be butchered for the home freezer. Conclusion – The only direct effect that high feed prices have on my operation is the lower prices I receive for my calves.
Taxes. Yeah, right. (Or, as someone recently said, “The rent is too @#$% high!”)
Cost of cows and bulls. Finally, an input that I can reduce! You see, I always start my calving season the first week in February, but here it is the last part of November and I already have six spring calves on the ground. It would appear that I have absolutely no need for the six high-priced bulls that I own, since my neighbors’ bulls seem to be more than adequate in keeping my cows bred. That would also lower the costs I incur on fence repair and maintenance. Conclusion – Sell the bulls and rely on the generosity of neighbors.
I knew, all along, that my money wasn’t wasted on that college degree in agriculture. I should have been doing this year end evaluation long ago. Thanks, Prof.
Jerry Crownover is a farmer and former professor of Agriculture Education at Missouri State University. He is a native of Baxter County, Arkansas, and an author and professional speaker. To contact Jerry about his books, or to arrange speaking engagements, you may contact him by calling 1-866-532-1960 or visiting www.ozarksfn.com and clicking on ‘Contact Us.’
