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Veteran Advisor
Posts: 1,517
Registered: ‎10-18-2016

Places To Shave Expenses

From the same $0 profit article

 

PLACES TO SHAVE EXPENSES

There are probably 20 different types of farming expenses, but let’s hit some of the remaining ones briefly:  My comments are in parenthesis)

  • Utility costs. Switch to low-wattage LED light bulbs on motion sensors, and use programmable thermostats for heating and cooling. (It costs money to pay for the newer, more expensive equipment, and sometimes it takes years to pay back)
  • Insurance. Bid out your whole insurance package and think about lowering coverages to the bare minimum. Insurance companies automatically escalate property values over time, sometimes to unnecessary levels.
  • Rent. Try to make the case that average cash rents have come down in your region or that your current lack of profitability simply does not allow for the current cash rents.  (Be prepared for the landlord to demand all rents in cash up front)
  • Veterinary costs. I can assure you that some vets charge twice as much as others. Therefore, if you have a choice, ask some pricing questions and consider giving a new vet a try.
  • Accounting and tax preparation. You can learn to use Quickbooks or another program yourself to save on paying accountants. In addition, some CPAs charge much more than other ones, so feel free to bid out tax services.  (My CPA more than pays for his fees every year not only in his expertise but in his wider knowledge of options both in the near and far term.  If you can do better than your CPA, no doubt you need a different CPA.  Going alone may work for some but it's not automatic.)
  • Repairs and maintenance. Consider used parts and online sources, and certainly do winter maintenance to the greatest extent possible to try to avoid planting and harvesting
  • breakdowns.
  • Real estate taxes. Make sure the county assessor has the correct number of acres on record, especially the productive vs. unproductive acres. 
  • Labor costs. Unfortunately, in this record-low unemployment landscape, there’s not much to do, except literally do everything yourself.