Guide
5 Ways To Cut Costs In Your Agricultural Business Today
Agriculture has always been and will continue to be a low-margin industry: it’s hard for producers to differentiate their products or create a brand. Because of this, people in the sector need to find ways to cut costs, boost revenues, and ensure that they make their operations as efficient as possible. But how?
Words by: Auto Trader
Published on 20 July 2019 | 0 min read
Check out these five strategies to cut costs in your agricultural business today.
1. Invest In Automation Technology
Ask any farmer about their biggest costs, and most will reply in with a single word “labour.” Paying for people to tend land is expensive, if agricultural businesses can find ways to reduce the amount of labor they need, then they can cut costs overall.
Right now, many companies are offering those in the sector a range of ag tech products: everything from automated combine harvesters to soil moisture sensors. In the future, new technologies will arrive that will allow farmers to spend less time out in the field and more time creating value digitally.
Right now, many companies are offering those in the sector a range of ag tech products: everything from automated combine harvesters to soil moisture sensors. In the future, new technologies will arrive that will allow farmers to spend less time out in the field and more time creating value digitally.
2. Proactively Ensure The Health Of Livestock
Sick livestock is a significant risk to the viability of an agricultural business. A single poorly cow isn’t going to cause a company to fail, but a whole herd of cattle could. The problem with conventional livestock is that they are so genetically similar that if a disease takes hold of one animal, it often takes hold in all, necessitating the destruction of the entire herd. Farmers need to avoid this by keeping facilities hygienic and minimising the introduction of new stock.
3. Buy Tools Second Hand
Many agricultural businesses fall into the trap of believing that everything they buy needs to be brand new. But it turns out that there are all kinds of tools that you can purchase second hand which will do the job just as well.
Take tractors, for instance. A brand new tractor can cost tens of thousands of pounds, but a second-hand model will set you back far less. You're certainly in the right place to find these here.
Take tractors, for instance. A brand new tractor can cost tens of thousands of pounds, but a second-hand model will set you back far less. You're certainly in the right place to find these here.
4. Optimise Your Crop Choice
When you see the market price for a crop like quinoa break out, it’s tempting to shift production to the new plant. But farmers who don’t grow foods designed to live and thrive in their climate will suffer. Sure, the price of quinoa and other trendy health foods might be skyrocketing, but unless you happen to operate a business in Peru, you’re going to struggle to grow the stuff efficiently.
5. Vary Nitrogen Rates
Varying nitrogen rates in the soil might sound like a lot of hassle (and often it is) but if you get it right you can dramatically increase the yield of the land, while at the same time, reducing other inputs. You can now get a range of software programs that tell you how and when to plant to vary the levels of nitrogen in the ground to maximum effect.
Conclusion
Cutting costs in an agricultural business in 2019 is the same as cutting costs at any other point in farming’s history: it requires finding ways to do more with less. Thanks to technologies, like automation, the trend we’ve seen over the last two centuries towards lower labor inputs and higher yields per acre looks set to continue.