11 Epic Ways to Improve your Farm Profitability
Imagine if you could take one simple move in your farm, and see an instant boost in your farm profitability.
Or even better:
What if there were 11 of these moves….
….and each of them could generate extra income per acre of the total production area.
You’d probably be excited to read about them.
Because here’s the deal:
Success in farming is possible.
But in order to be successful as a modern-day farmer you need to be more like a modern-day tech entrepreneur than a peasant agrarian of yesteryear. You need to divorce the traditional farming methods because the traditional farming model is broken and it doesn’t work.
A lot of new farmers struggle because they follow their hearts instead of approaching farming as a business. The obstacles preventing you from getting into farming and succeeding can be overcome. Profitable farming is possible.
With that, let’s jump in:
11 simple ways to improve your farm profitability
1. Survey the market
Growing any crop without a specific market in mind is suicidal. Sadly, that’s what most people do. They rush into farming business without validating the market potential of their given crop.
Those who do, become a “me too” kind of farmer. They validate what to grow by looking at what their neighbours are growing.
With no time the market becomes saturated with similar commodities.
Competition kicks in and the only way to stand out, is through lowering your prices. But that’s the best scenario, the worst case scenario would be the marketing dictating what price you get.
No one wants to lose control of how they price their commodities.
But that’s what you’ll get when you fail to look for a market upfront. You’ll pay for the mistake by squeezing your margins dry.
To be on the safe side, start by approaching all probable market outlets about your farming ideas and then choose an enterprise based on the feedback you receive.
That way you’ll be sure that the market really needs what you intend to grow.
2. Choose the right crop
Choosing the right crop to plant is the first step to optimizing farm profitability.
In any given market, consumers will demand more than one enterprise. As an entrepreneur under such circumstances, you’re face with a decision on what enterprise to select. My advice is simple, choose the one that has a higher market value.
The reason I say this is because the cost of production is almost the same across various enterprises.
For example, whether you need to grow tomatoes or squash, you’ll require land, same land preparation, and same operation cost.
But the difference is determined by how the market values a given crop.
For instance, it might value tomatoes more than squash in which case you should go for tomatoes.
3. Plan well in advance
Planning is important in all fields and those who ignore it do so at their own peril.
It’s a fact that all professionals have plans – For instance, doctors follow a treatment plan, airline pilots follow a flight plan, and soldiers follow a military operation plan.
Why shouldn’t’ you have one?
While I can’t guarantee your success – in fact no one can, having a plan dramatically increases your probability of success.
The reason why most farming ideas no matter how great never live to see the light of day, is that they neglect this vital step.
Knowing this gives you unfair advantage over the rest of the folks.
When you take your time to write a detailed farm plan, you’ll save yourself a lot of time and frustration trying to figure what to do next.
And as with any agricultural produce, time is a luxury you cannot afford.
Given the perishable nature of most horticultural produce, you’ll be screwed if you lack a plan of action.
4. Hire rather than buy
Land is the leading factor of production. Without it your dream of becoming a farming entrepreneur is just that.
But in reality this should not hold you back as there are countless opportunities to farm without owning.
The most common and cost-effective opportunity is leasing the land.
Leasing the land is an amazing way to get into the farming business while side-stepping the high capital cost of purchasing the land
Besides the land, you can also hire other farm machinery instead of buying. For example, it won’t make sense purchasing a tractor when just starting out.
It’s better to start small and then advancing as your farm profitability increases.
5. Diversify your enterprises
Specialization is for insects.
Not unless you’re an insect, which certainly you’re not because you’re reading this, specialization should not be on your plans.
Not at least in farming. There are some other instances where specialization is paramount, but if you want farm profitability badly, you can’t afford to specialize.
You have likely heard the expression “Don’t put all your eggs in one basket.”
For example, if you’re growing passion fruits for income, it could be a good idea to intercrop them with other vegetables such as leeks, strawberries, onions, beetroots, and spinach.
These intercropped short term crops will enable you to earn some income before your main crop.
6. Stick to the plan
Starting a farm of your own is a fantastic way to give yourself some control and possibly earn an extra income at the same time.
That being said, starting a farm is not a “magic button” to stardom or riches.
Nothing usually is.
Farming is risky, challenging, and not for the fainthearted.
Farmers and agripreneurs deal with unpredictable situations, such as crop failures and market fluctuations. One year may produce a bountiful harvest, while another may bring total devastation and little or no income.
This is all part of the business of agriculture.
Now, when you face such situation, the last thing you need to do is switch plans.
While some challenges might require a change of plans, it’s better to stick to your plan and learn from your mistakes.
It’s all part of the process that eventually leads to farm profitability.
7. Invest in yourself
You need to continually invest in yourself to become better at what you do. Grasp any learning opportunity to help you make better farm decisions.
While you do this, don’t worry about being perfect.
If you worry too much about being perfect, you’re never going to get anything done. Get your farm set up as soon as you can, and you can worry about learning the ins and outs of the trade later.
As long as you take the first step, you’ll be fine.
A good place to start is checking out my passion fruit farming course, where I provide you with a step by step guide to growing passion fruits for massive profits.
Other learning events such as field days, open days, and libraries are all good sources of information.
8. Don’t take short cuts
Farming entrepreneurs have a role to play. A role to protect the integrity of the industry and restore faith in the quality food standards.
Taking short cuts defeats the whole logic of protecting the industry’s integrity.
Compliance to quality standards and other farm operations is key. Therefore, to safeguard your farm profitability, you need to adhere to those standards.
I’m sure you don’t want to lose your hard earned cash when you’re slapped by a ban or court suit for contravening the law by taking shortcuts.
9. Keep clear and trackable records
Keep current, accurate records.
Pay attention to details. Know where your money is generated and spent. Storing receipts in a shoebox and waiting to post figures at the end of the year is not a recommended recordkeeping system.
Good records will help you to measure your cash flow as well as to estimate the profitability of the enterprises. Alternatively, you could use cost of product calculator to calculate your income and cost of production.
10. Keep food safety in mind
Remember that you’re growing food for human consumption.
And as such, food safety is key. The only way to ensure that you’re growing safe and high quality produce, is by following the best agricultural practices.
Internationally producers and consumers are embracing the practices and ideals of GLOBAL GAP. It’s not just a requirement but an important component in enhancing food safety.
Consumers will pay you more when you’re accredited and certified against such standards.
11. Ask for help
There is absolutely no reason why you shouldn’t ask for help when you need it.
Many people, including myself, are happy to help people out.
You’d be surprised.
We’ve covered quite a deal of information on how to maximize your farm’s potential. However, even with all the knowledge in the world, nothing can ever be done without taking action.
And that part is solely upon you. How much you succeed is all up to you. Remember that knowing and not taking action is like not knowing at all.
If you can implement just 20% of those items on the list, you’ll see massive profits on your income statement. Farm profitability is possible beyond imagination.
Which other ways are you using to keep your farm profitable?