Cost Analysis, Love and Hate

I strongly dislike making blanket statements, I really do, but I'm about to make one right here.  Farmers hate bookwork.  Bookwork can be anything from simply tracking expenses to balancing a checkbook to doing cost analysis on a crop you either did raise or want to raise.

I make the blanket statement because the type of person who usually likes farming is also the type of person who relishes being outside and poking around in the dirt rather than pushing paper.   

Enter the engineer.  I also hate bookwork.  But I love cost analysis.  The reason I love it is that it takes nearly all the guesswork out of what otherwise could be a really complicated problem to figure out.  If you put everything you do in terms of dollars, you can compare it to anything else.  

 I would rather do cost analysis for 8 hours than enter receipts in a program for 1 hour.  It's that bad.  But, the beauty of it is that if you farm and don't do cost analysis, you're asking for trouble.   Why?  

Because there are so many things you can farm, but many of them don't make much sense depending on your market and labor you spend to raise the crop.   

For larger farmers, a lot of them can handle only making $25 per acre profit, so they keep raising the lowest labor, lowest input cost, lowest risk crops so they can do the most important thing: keep farming. 

 Smaller farms such as ours have to adapt constantly to respond to markets, manage machinery costs (which is a silent killer, don't be deceived), and diversify for the same reason: keep farming.  

People throw the term "sustainable"  around almost as much or more as "fair share" and then have twisted the meaning in any way they see fit to sell their agenda.  

Here's my agenda: sustainable, at it's core, means that you're still farming and not approaching bankruptcy.   

Cost analysis is a key ingredient to being sustainable.  If you aren't doing cost analysis on your crops and/or efforts, you should be.  If you don't know how, ask me and I'll be happy to show you enough to be dangerous.   

Be blessed.  Keep trucking.  -Kenny