Equipment
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We believe that managing equipment is the single most important aspect of our farm for driving profitability. According to Kansas Farm Management Association data, controlling input costs is the single most important defining characteristics that seperates the top farms (from a profitability standpoint) from the rest of the group. Machinery costs constitute a large percentage of total input costs.
This graph illustrates the difference in profit (from average) when a farm is in the top third of the listed categories. Notice that getting the best yields or prices made only a small difference to profitability when compared to controlling costs and operating at a larger farm size.Naturally, there are a lot of aspects to optimizing machinery costs on a large, growing farm. We must balance minimizing breakdowns, conducting operations in a timely manner, performing each operation as accurately and correctly as possible, and making sure that we always have farm expansion in mind against total per acre machinery costs.
This is a never ending struggle as we continually balance such issues as ownership vs. leasing, ownership vs. custom, appropriate equipment ages and sizes as well as maintenence and upkeep issues.
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