42 Story Idea? Email Paul.Nolan@Farms.com Better Farming | May/June 2024 Some of these questions can cause sleepless nights, but the more you know about the market, the better equipped you are to make a decision. Don’t bet the farm What happens if your new miracle crop ends up as a wreck? Do you have enough other crops to carry you through? What happens if it doesn’t rain? Do you have crop insurance? What happens if your house, shop, tractor, barn, or combine burns down? Do you have enough insurance? Be careful with grain contracts. Many people have had issues if they didn’t get a crop and did not have an act of God clause in case of crop failure. Also, be careful of who you sell to with deferred grain cheques. If a grain company folds up before you cash the cheque, you could be out of luck. It’s best to plan for disasters to occur but hope for the best. Make sure you have multiple sources of income if one crop or venture does not do well. Job-costing Maybe I should call this “crop-costing” if we are talking about farms. Until we started doing serious job-cost calculations at our business, we wasted a lot of time doing jobs that didn’t make much money. Sure, we liked doing some of those jobs, but they didn’t make as much money as other jobs. We started a basic job-costing program that we still have today. We track the amount of time we spend on each job so we can bill it correctly and analyze our pricing and procedures. We try to do that on the farm, too. We separate our crop income and try to figure out how much we made per acre on each crop and how much time and money it cost us to grow that crop. Then we figure out our profit per acre. It’s amazing how that helps make our decisions on which crops to grow. How much do each of your crops make per acre? Build a solid base Somewhere it says that if you build a house on sand, it is doomed to failure. The same goes with farming. If you don’t have a solid base, you are pretty vulnerable to the storms that affect farming. Years ago, a 95-year-old gentleman we knew came for a visit. It was at the height of the potato boom, and he knew the potato farming industry. He looked at all the equipment and said, “Too much new equipment. They’ll never make it.” Not too long after, there was a big bankruptcy sale. Try to build a solid base for your farm before you expand too much. If you have a few bad years (such as the last three drought years we had), you will be able to weather the storm better. It’s better to have a small, successful farm than a huge farm that is bankrupt. Hard work Hard work can solve many problems, but not all of them. Most farmers don’t work a 40-hour week, but working long hours at a job doesn’t guarantee success. Make sure you are working smarter and working at things that will make you money, not just things you like to do. Not many farmers like doing bookwork, but unless you know where you are financially and how you are making money, you stand a good chance of failure. Take time to job-cost your crops and see what is making the most money. Take time to plan ahead and decide what is best for your farm to buy. Sometimes doing books is the hardest job on the farm, but it can yield the best return. Well, there’s a bit of farming history. Perhaps it has given you an idea or two that might help your farm. Enjoy the spring, and may you have a great year on the farm. BF Tractors, Trucks & Growing Grain BUILT ON FARMER Relationships. We Purchase: Oats • Flax • Barley Wheat • Other Grains Grain Millers is a privately held, family-owned company. We depend on direct farmer relationships and offer farm gate pricing and contracted grower production. Our Crop Science Team is here to help you with any agronomy questions you may have so you can get the best return on your production. When you sell to Grain Millers, your grain is going directly into some of the most technologically advanced mills in the world! grainmillers.com | 800.328.5188 OATS/FEED GRAINS: 306.786.4682 FLAX: 306.933.4644 OTHER GRAINS: 952.983.1269 RON SETTLER Ron has farmed for over 45 years in Lucky Lake, Sask. In addition to grain farming, he and his family also operate a mechanical repair shop.
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