Agriculture has long been described as the backbone of many economies around the world. This is probably the reason why many people buy land and invest in agriculture in foreign countries. But it’s also not uncommon to come across farmers who actually earn very little, if any, from their farms.
Although factors such as inflation, lack of markets and seasonal changes are often the cause, sometimes the farm owner is responsible for his poor performance in terms of farm income. But here is good news!
Whether you just started farming the other day or have been in the business for a while, there are several things you can do to drive the numbers up.
Here are some tips you could use to make your farm more profitable.
1. Grow high-value crops
By definition, high-value crops are those that are important to the economy and have high market potential. They usually have a significantly high monetary value per acre or hectare. Some examples may include vegetables like cabbage, potatoes, and carrots.
Also called marijuana, cannabis is also growing in popularity as one of the most valuable cash crops in the world. Many American farmers are turning to this crop to boost their income.
2. Reduce tool and input expenses
High production costs are perhaps one of the most common reasons why farms fail to generate decent profits. And considering they’re often a vital (yet vital) part of production costs, it’s not uncommon for farm owners to look for ways to reduce their input and tool expenses.
Fortunately, there are different ways to do this. For example, you can buy used but reliable trucks for your farm instead of buying new ones. As seen on Charter Trucks, there are plenty of them online these days, including options for those who would rather rent a farm truck than buy one.
3. Outsource certain agricultural services
Whether you decide to have a farm manager or hire a full-time worker, you should always have someone whose role is to oversee day-to-day farm operations. They may be in charge of agricultural activities like milking cows, collecting eggs, pruning trees, feeding animals, tending crops, applying fertilizer, mulching, etc.
While you can outsource some of the farm activities like harvesting, planting, and plowing depending on your needs, it’s also a good idea to outsource activities like marketing, human resources, and accounting.
As a farm owner, outsourcing certain services can help you reduce your labor expenses, day-to-day operating expenses, and other areas. It can also help you discover other ways to boost sales and increase profits.
4. Diversify your agricultural activities
Even though certain crops or animal products are incredibly popular and profitable, they don’t always work for your farming business. Along the same lines, many farms focus entirely on one area of farming and end up becoming very successful.
If your current farming operations are not as profitable as you would like, diversification could create more opportunities to increase your profits. This can mean everything from growing different types of crops that coexist well together, to mixing agricultural and livestock crops.
5. Improve your marketing strategies
Gaining a good command of marketing is an absolute necessity if you want to succeed in agriculture. This is especially true in the digital age we live in. And since you may not always have a ready market for vegetables and fruit or other produce, it’s important to always be on the lookout for potential new customers.
At the very least, consider promoting your farm’s products online through various social platforms, having a presence on Google My Business, and having a website for your farm. A good marketing strategy can help increase sales and eventually increase your profit margin.
Unlike long ago, the profitability of a farm does not always have to be determined solely by its size. There are many ways farm owners can maximize their profits, and the above is just the tip of the iceberg!