Tight margins for 2016 are pushing farmers to sharpen their pencils and punch their budgets into shape.
"Bankers are going to be looking very closely at [debt to asset] ratios," says Matt Bennett of Bennett Consulting. "We're going to have to be better businessmen than we've been."
But where will they cut? More than 1,500 farmers told Farm Journal Media in a recent Pulse poll what input they planned to cut expenses for first in 2016. The No. 1 response - farmers plan to trim machinery costs first, with 38% preferring that option. Another 30% say every input category will be considered for the chopping block.
The other responses included:
- None - 15%
- Fertilizer - 9%
- Seed - 6%
- Crop chemicals - 2%
Bennett encourages younger producers to seek wise council from older generations for guidance on surviving tough times like the 1970s and 1980s.
"We need to understand what it's going to take to be able to get through what will probably be the toughest time in a lot of our careers," he says.
Want to be a part of the heartbeat of the Farm Journal Pulse national producer panel that speaks up and speaks out? Participating is as easy as answering two quick poll questions per month via text message from your mobile phone.
Visit www.agweb.com/farmjournal/farm-journal-pulse/ for details.