One of the main differences between farmers who make money and farmers who don’t is cost control. Studies by land-grant universities bear this out.

In a recent study at Auburn University, researchers divided farms into two groups—those with the most and least profit. The farms reported similar proportions of owned and rented land, yields, crop mixes, debt levels and gross returns per acre.

High-profit farms gained small advantages for most other expense items. The research concluded farmers with the highest returns paid more attention to details and spent more time monitoring their businesses, than did the farmers in the lower-profit category.

High-profit farms were slightly larger, but the big differences among them were expenses. High-profit farms spent less per tillable acre for seed, chemicals and fertilizer. High-profit farms also spent less for power and equipment.

Several Kansas farmers this writer has visited with during the past few months would concur with these findings. One of the major reasons they have remained competitive is cost control—keeping costs at a minimum.

These farmers remain extremely cost conscious when buying for their farms. They don’t spend money on fertilizer, animal health drugs or equipment that won’t show a return.

As one farmer put it, “I don’t buy machinery to avoid taxes, or because I like to wear out new paint. You can buy yourself broke.”

Crop rotation and conservation tillage also keeps the weeds down and reduces the need for herbicides and pesticides. As farmers rotate crops, they use a different family of herbicides each time so weeds can’t become resistant. It also takes less product which keeps expenses lower.

Kansas farmers, and their counterparts across the country, often work closely with crop consultants when applying herbicides, insecticides and fertilizers. They’ve cut their uses significantly in recent years.

Producers determine inputs for fertilizer, herbicides and pesticides with regular soil tests. This can be a real balancing act. They want to apply enough nutrients so they can realize top yields on their land, but they can’t afford to over fertilize. It’s too expensive.

Most successful Kansas farmers have remained conservative machinery buyers also. Few have tractors newer than five years old.

All keep accurate, concise records on both production and finance. All seek professional advice from accountants, marketing specialists and crop consultants.

The key to successful operation of any business, whether it is farming, banking, car dealership, etc. remains cost control, good record keeping and tight management in all areas.

Still many factors remain out of a farmer’s control. Government regulations, foreign competition, trade sanctions, dollar value all have a direct impact on the financial conditions on the farm. By controlling factors they can, farmers can build toward a successful future in agriculture.

John Schlageck is a leading commentator on agriculture and rural Kansas. Born and raised on a diversified farm in northwestern Kansas, his writing reflects a lifetime of experience, knowledge and passion.

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