With Prices Like This, Who Needs to Know the Cost of Production?
May 4, 2012
Every farmer does, writes Tina Barrett, executive director of the Nebraska Farm Business, Inc. in this week's Cornhusker Economics article.
"A few months ago I was talking with a producer and I mentioned that I worked with farmers on calculating cost of production, among other things. He posed the question of why do farmers really need to know their cost of production? Sure, five or six years ago when margins were tight cost of production was important in marketing their crop, but what’s the point with the increase in crop prices and wide margins?"
Learn why Barrett says keeping a close eye on your cost of production is just as important in a good year as it is in a downturned market.
She writes: "If you can keep your cost of production below your neighbors, you will be able to expand faster, reduce debt or eliminate debt faster, and maybe even take that family vacation that you keep hearing needs to happen!" and discusses why farm business management can be as important as production in achieving a competitive advantage.
Read more in her May 2, 2012 Cornhusker Economics article.