Have you read or heard about saving on inputs and maximizing ROI in 2019? If you’re like me, you’ve read the same article in 10 different farm magazines on top of sitting through that talk at every farm conference this winter.
Even though I’m one of those farm magazine writers, I’ve gotten to the point where I flip through the page if it mentions saving on inputs. It’s not that I don’t like the idea of saving, I just get tired of the same suggestion year after year.
I tell myself, “I’ve been saving money on this farm for 7 years, there isn’t anywhere else to save. I’ve done my time, and I am doing fine at managing costs and revenue.”
My stubbornness has gotten me in trouble before, and this time was no different. After I returned from the Farm Futures Business Summit last month, I swallowed my pride and looked at our real input costs.
A closer look
Until now, each January I compared the cost of sales on a profit and loss statement from the previous year. This year, I requested complete 2018 bills from every major vendor. No one told me to do this, but I figured looking at actual bills was the best way to calculate costs per unit for inputs like feed and fuel.
Much to my shock and embarrassment, I realized I dropped the ball in a big way – like, in a six figures could-have-done-better way.
With laser-like focus in the past month, we’ve tried to slash 20% or more off prices for inputs like fertilizer, chemicals, feed, and more. We’ve accomplished this not by changing suppliers but by changing programs with existing suppliers.
I wrote about saving on mineral in this blog in Farm Futures last month. Dad and I have taken control of spending and are having fun saving money. In a way it’s even brought us closer together as a father-daughter management team.
I’m happy about saving input dollars, but I can’t rest on my laurels. As much work as I think I’ve done, there is more to do. I question why I didn’t find ways to save before now. Was it laziness, pride, or lack of discipline? Perhaps I fell in love with the day-to-day farming activities and forgot about the details.
I admittedly let some things slide last year. It’s easy to do because we have so many things to manage in a farm business.
Whenever I think I’m doing well and there’s nowhere left to improve, that’s when I’ve made a big mistake. There is always room for improvement.
The opinions of the author are not necessarily those of Farm Futures or Farm Progress.