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Growing Profit Margins For Farmers: 5 Key Strategies

They are the million-dollar questions. Literally: how do you increase the profit margin on a farm? What are the best strategies to use in each aspect of the farming operations to squeeze the most money out at the end of the day? Read on to explore some of the ways you can potentially optimise how you do things to make more money.


Farmers are always looking to get the most out for the least amount of investment. It’s a fine balance between low cost and having high-quality products so its a big challenge especially when your entire livelihood hinges on dealing with major forces each that you can't control. The environment, the weather and climate change. Here are 5 key areas you can explore to give yourself the best chance of thriving.


  1. Selling strategy - adjusting how you go to market

  2. Alternative energy - reducing energy costs by producing your own

  3. Reducing chemical use - reducing chemical costs by improving plant health so chemicals aren’t needed

  4. Crop rotation - better pest management & reducing fertiliser costs and enriching soil for better over all plant performance

  5. Improving farm equipment - reducing cost of doing things with more reliable, more efficient tools


Selling Strategy


With an increased number of conscious consumers out there looking to reduce their carbon footprint, eat organic when shopping for produce and when eating out, there is a major opportunity here. Firstly there's initiating deals to supply local grocery stores. Local stores require less cost to supply because simply it’s a shorter distance to travel therefore less labour cost in payroll for drivers and less cost from wear and tear on delivery equipment.


Furthermore, you will most likely get a higher price per item here verses the major grocery stores, especially if you are an organic farm as some smaller boutique-style local grocery stores, or local grocery stores in general may charge more for a premium customer experience, allowing you to cash in. Grocery stores in resort towns for instance where consumers are already paying slightly more for the convenience of having fresh produce in their mountain town grocery store right next door to their fresh powder snow-covered ski mountains.


There is also the option to do farmers' markets and also create a local farm-to -home subscription so that people near you can buy direct and maybe even come pick up so all you have to do it prepare it thus reducing the cost of delivery and transport dramatically and boosting cash flow.


Alternative Energy


Pretty simple concept here, make your electricity and you won't have to buy it from the power company. It’s a genuinely viable option for many farms to invest in wind power for example. Wind power has been said to provide electricity for farm equipment a lot cheaper than you can get it from the local power grid and that is worth looking into. Farmers can also lease their land to wind power companies who pay monthly fees.


Solar power continues to advance as well so when it comes to securing a supply of a commodity you will always need that you have to either buy from someone else or make yourself for free this one is something to seriously explore. Any addition of alternative energy will reduce the cost of buying it so eventually, that is going to boost profits, how soon it depends on the capital investment required to install the technology but the value proposition can't be denied.


Reducing Chemical Use


Many farms have large chemical bills. Especially the big industrialised farms. Pesticides and fertilisers are the go-to’s and their expense is typically justified because they help control how well plants combat the elements to produce the things that make the money. Some say they are mission-critical and you need them but that is not the case. It’s been well documented that pesticide and fertiliser use can be reduced without losing crop productivity and you do this with better plant health off the back of better soil health, nutrient uptake, and nutrient synergy.


Reducing chemical use to reduce expenses and increase profits is one concept, reducing the expense by taking away the actual need for the chemicals in the first place but the other is about getting more actual revenue by improving the value of the product itself. The time for this is ripe now! With the covid-19 pandemic, there was a lot of talk about the impact of compromised immune systems. What is a compromised immune system, what environmental factors impact our immune system, the risk to those in that category and best practices are out there? We even saw how seemingly healthy people can actually have compromised immune systems and be greatly impacted. People are making the link between toxins in the environment, especially food, and compromised immunity and that's now impacting their buying choices. This probably won't change but rather get even deeper so implementing new techniques and products aimed at reducing chemical dependency in farming to boost profits makes more sense now than ever.


CropBioLife can help plants protect themselves from pests and bacteria amongst other things like doing better in less than ideal soil quality just like a healthy diet and natural supplements can build a strong immune system in the human body and protect it from illness without the need for un-natural remedies.


Using CropBioLife can reduce or completely remove your need for chemical use. Let us help you map it out:


Get tailored advice on reducing chemicals in your farm.


Crop rotation


Effective crop rotation can enrich soil health that gives your plants more thus reducing fertiliser costs and increasing profits. For example, say you planting soybeans out of corn season, which would increase the nitrogen content in the soil. This strategy is used for killing off unwanted insects and impede the growth of harmful bacteria. Known as “integrated pest management” the process of managing pests combined with the increase in soil health that provided value on going can directly increase the yield and thus profit for farms.


Improving farm equipment


More efficient, more reliable, cleaner running equipment can reduce a farmer's equipment costs in the long run and lead to increased profits. The cost of new equipment although expensive to start can save a lot in reduced maintenance, fuel and ware-and-tear over time that can make the initial expense look very attractive.


Expenses from new capital assets that are purchased to earn income can be recouped over time through depreciation so improving farm equipment not only ensures more profitable operations upfront but ensures farmers are eligible for tax deductions over the entire useful life-cycle of the equipment.


More on this here:

Environmental protection agency: Integrated Pest Management (IPM) principles

Union of concerned scientists: wind power and agriculture

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Manufactured by Aussan Laboratories Pty Ltd

15 Fordson Road, Campbellfield VIC 3061 Australia

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Manufactured by Aussan Laboratories Pty Ltd

15 Fordson Road, Campbellfield VIC 3061 Australia