“After more than a decade of working with farms, livestock operations and other agribusinesses, I’ve found that the most successful entities aren’t determined by geography, operation size, or crop type,” shares Maxson Irsik, Pinion agricultural business advisor.
These defining traits and actionable steps are what separate top performers, and they can help your business thrive, too:
1. Control expenses. Top producers know that lowering costs is critical to profitability, but they won’t sacrifice revenue to save a buck. They may prepay inputs for a discount, look for cheaper supplies, or find ways to cut utility costs or waste, but they will be very careful not to cut expenses that will also cut revenue.
2. Set goals and follow budgets. Successful producers have a clear vision of what they want to achieve. Whether it’s increasing production or herd size, or changing their crop mix, they understand how decisions will impact their financial performance. They look ahead a year or more. Most write down those goals and include the numbers. They also set a budget based on accurate prices, yields, and costs – and they stick to it.
3. Use benchmarks. By gathering information and comparing their practices and performances to others in — or out of — their industry, they learn where and how to improve. They’ve focused on planning, planting, buying inputs, irrigating, harvesting, and transportation. Benchmarking helps them identify strengths and weaknesses, and those insights lead them to greater success.
4. Understand the market and marketing. The most successful ag operators have taken the time to educate themselves on market terms and drivers. They’re aware of what buyers want.
They know their cost of production and understand marketing windows. Savvy producers pay attention to what agricultural economists are saying and apply their projections to their own operations. All that knowledge helps them avoid costly mistakes, mitigate risk, and drive revenue growth.
5. Focus on the details. In farming, little leaks here and there add up to large rivers. The producers who consistently succeed have kept track of the money that flows in and out of their business every month. They track all receipts, records, and other financial information.
6. Leverage technology. Top producers are receptive to new ideas and collaborations. They may not be the first adopters of new technology, but they’re often among the early users. They’ve learned to incorporate automated accounting, precision farming, and information technology into their businesses to save time and money.
7. Have an eye for opportunity. Farmers that go the long-haul are often considering new revenue streams. Whether from expanding acreage, diversifying into cheese-making, or investing in renewable energy for their operation, they look for ways to add to the bottom line.
Any one of these actions could benefit your farm or ag business – if you’re looking to improve your performance, make this the year you put one or two of them into play.
Connect with Pinion’s ag-focused advisors for ag-industry benchmarking, cost-cutting strategies, and tailored financial planning to propel your business forward in 2025.
