There's money to be made in production agriculture, and no-tillers can make more money than anybody else,” says Moe Russell, a management and financial consultant to farmers in 17 states.
Roughly a third of the farmers in the United States are “so well-heeled” that they are financially secure for at least a decade, Russell says, though he warns that roughly half of the other growers will be forced out of the business by financial failure within that period. The remainder, the Panora, Iowa, consultant says, “will have an opportunity to make more money in the next 10 years than they did during the past 25.”
The difference between the winners and losers is clear, Russell maintains. “The people who make a lot of money are doing five things, primarily four, that the also-rans aren’t doing.” His list includes:
Marketing: Securing a buyer, at favorable prices, for all crops produced.
Equipment Cost Management: Overseeing machinery costs, which vary by as much as $170 per acre among Russell’s clients.
Inventory Management: Minimizing the costs of crop storage, handling and quality deterioration.
Agronomic Management: Including decisions on genetic selection, drainage, compaction, fertility and tillage.
Input Cost Management: Many farmers spend the majority of their time in this area, although it has the least potential benefit.
Equipment costs represent a large portion of farm operation expenses, Russell notes. “Machinery ownership costs can amount to 25 percent of the balance sheet value of equipment,” he says, and no-tillers should…