Delivered November 22, 2019. Contributor: Alexandra Y.
The goal is to understand what farmers are doing to stay profitable and what business decisions they are making to make money.
30% of US farmers struggle to make a yearly profit.
One necessity to making a profit as a farmer is doing market research before starting to ensure the crops they are planting have a current market and have shown to be profitable in the area.
Aiming for high market volume is something farmers should be doing to make a profit, meaning they produce crops that many people purchase large quantities of in their local area. One place farmers can find market demand information is from local retailers and wholesalers.
Diversification is also important to making a profit as planting different types of crops can be a fail-safe against things like weather or bugs ruining a certain plant.
Some farmers make sure to have at least one ultra-profitable crop or livestock on their farm to help close the gap between the slower-growing or cheaper products. Examples of this include chickens, which produce eggs quickly and at a high-quantity, or flowers, which often sell at a higher price than other crops.
A lot of farmers started as a hobby or side-venture. One key to bringing in customers and profit for these types of farmers isknowing the importance of marketing. They need to change their mindset from homestead to business to make sure they are taking the needed marketing steps to gain customers.
Another necessity for farmers is closely managing their profit margins on a personal level instead of simply charging customers what other farmers charge. All costs and labor, including debts, should be factored into the production costs that are used to determine the final sale price of an item.
Keeping operating costs low is another key factor in making a farming profit. Farmers sell equipment that doesn't work for them or goes unused while keeping older, paid-off equipment that works well and has little-to-no operating costs.
Only the project owner can select the next research path.