Steve Johnson, farm management specialist with Iowa State University
Aired: December 2016
Overall, 2017 will be another down year despite more record yields, with USDA-ERS data predicting about a 15 percent drop in farm incomes, says Steve Johnson, farm management specialist with Iowa State University. “As we enter the fourth year of depressed prices, successful farmers are watching their margins, paying attention to cash flow and cutting costs.”
1. Proactively manage your costs. Tighten up your record keeping and do the acre-by-acre calculations necessary to determine your production costs. Use those numbers to make strong management decisions.
2. Leverage yields to maximize profits. Your own numbers are more relevant than USDA averages, so they should determine your fixed costs and the prices you need. As a farmer you have more control than you think —use it to make effective, informed decisions.
3. Manage your financial emotions. The key is to develop a plan that includes time and price objectives and an understanding of your cash flow needs. Don’t let your emotions stop you from taking a profit.
This interview was conducted as part of the ILSoyAdvisor.com Profitability Radio series, sponsored in part by your Illinois Soybean Association checkoff program.