Plan to be more profitable
Plan to be more profitable
Data can help you make proactive and informed decisions to benefit your farming operation and overcome the current challenges facing your industry — including rising interest rates, uncertain cost of production, and limited perspectives.
Benchmarking can help you understand where your farm stands in the current marketplace and help you to identify areas for improvement. Tools such as Farm Builder can provide you with real-time data to track your cost of production and predict revenue.
It is essential to embrace new technology to succeed in any industry — and farming is no exception. Data tools can provide you with the insights you need to become more efficient and improve profitability.
From fluctuating prices to high interest rates, unanticipated costs, and unpredictable weather, your farm is inundated by risk factors that impact your success. While you can’t predict the future, you can leverage your farm data to make informed decisions that will help optimize profitability and reduce financial risks to your farm.
Let’s discuss some of the current challenges you may be facing and tools you can use to make informed decisions to support the success of your farming business.
What challenges are farmers facing?
Farmers operate on low margins, so any unanticipated changes in costs or pricing can impact the profitability of your farm. Some recent challenges facing the industry include:
Rising interest rates
Interest rates have skyrocketed, and the price of fertilizer, feed, operational debt, and equipment repair has increased accordingly.
Farmers who invest in financial forecasting tools or benchmarking to predict and plan for price changes are best equipped to weather this period of high interest rates.
Changing costs of production
Constantly changing prices and unexpected expenses can make it difficult to track your true cost of production.
Tools that use real-time data to track expenses, adapt for price inflation, and forecast your farm’s profits ensure you don’t have to wait until the end of the year to discover how much you’ll earn.
Limited perspective
It’s easy to compare yourself to others — especially when there is a large farming operation down the road with all the newest equipment. However, the size of your farm has little relevance to your overall profitability. Instead, how well you manage the resources of your farming operation determines its success.
Benchmarking gives you the information you need to determine where you fit between your neighbours. It also provides you with the perspective you need to discover the areas where your farm is financially healthy as well as the areas where you can make changes to increase your profitability.
How data-driven decisions improve profitability and reduce risks
Data is the answer to many of the challenges farmers are currently facing. Benchmarking can help you determine your position in the industry, while financial projection tools like MNP’s Farm Builder projection tool provide real-time data to make informed decisions that support the profitability of your farm.
Benchmarking
Benchmarking tools provide a snapshot of your farm’s financial health compared to your peers in the industry — for example, by analysing if your dairy operation is more profitable per kilogram than your neighbours. However, benchmarking is more than just a comparison tool. It also provides you with data to understand your cost of production and make informed decisions for your farming operation.
Benchmarking can expose the areas where you excel and identify areas where you may be losing revenue — such as whether you are spending more on feed on a per unit basis compared to other operations in the area.
Speak with an advisor for recommendations on how to utilize benchmarking data on your farm. Together you can explore areas where you can save costs and make your farming business more profitable.
MNP’s Regional Farm Benchmark Services
Projection tools
Projection tools such as MNP’s Farm Builder give you the real-time data you need to make informed, proactive decisions for your farming operation. Farm Builder breaks down your income statement to determine your exact cost of production and predicts the revenue your farm will generate throughout the year.
No quarter is the same, but MNP’s Farm Builder tool uses real-time financial data to remove the guesswork from your decisions. It is a management system designed to help keep you informed about the performance of your farm, enabling your management team to focus on key business metrics, keep an eye on the big picture, and improve communication with your business partners.
Additionally, our Farm Management advisors will sit down with you to discuss any questions you may have about the data Farm Builder provides. We can answer questions such as how your expansion plans may impact your profitability, whether your feed cost per animal is going up, or how a change in interest rates may affect your bottom line.
MNP’s Farm Management consultants can help you make the most of the insights provided by our Farm Builder tool so that you can make proactive decisions to save money, increase the efficiency of your farm, utilize your excess capital, manage debt, and expand your farming operation in a way that minimizes risks.
Take the next steps to grow your operations
While farmers are currently facing many challenges in the current marketplace, tools such as benchmarking or the Farm Builder projection tool can provide you with the real-time data you need to analyze your farm’s financial health, make informed decisions for your business, and remain competitive in your industry.
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