Cutting Costs in Tight Times, Difficult but Doable

In a special series of reports this month, Hoosier Ag Today and  Farm Credit MidAmerica have been focusing on the fixed costs of a farming operation and how to better manage those expenses. We have focused on equipment costs and land costs. Some fixed expenses are more difficult to cut than others. Evan Hahn, Vice President of credit, Agribusiness, with FCMA, says labor  costs are areas where efficiency can often be improved, but employees may be affected, “One way is to improve production efficiency by using precision equipment which can reduce labor costs.”

A cost that  is often hard to control is family living costs. Hahn said they recommend writing a check each month to cover family living costs, “With lower profit levels in an operation, some families may have to look at lowering their living costs. One way they can do that every month is to write themselves a check out of the farming operation. That allows them to separate those costs from the farming operating costs.”

Hahn says, if you need help evaluating your fixed costs, talk with your  lender.

FCMA has other resources to provide advice and direction for your operation. Visit them at