Economic Sustainability

Other posts in the sustainability video series:

1. Sustainability - Defining it
2. Environmental Sustainability

Transcript of the video audio (in other words, here's the text version of everything I said in the video)

When it comes to economic sustainability for the farm, the first thing that comes to mind is the financial risk we take every year. We commit all the expenses for the crop months before any tractors even hit the fields in the spring. And then it’s obviously months later until we see how the yields are going to do. And then it’s months even after that until we make the final sale of the crop because we have on-site storage. So that’s an average of around 18 months from hwen we spend the first penny and then months later when we receive the final penny for the crop.

And in between the expense and the profit side of things, there are some big variables that play into the profitability. One obviously is the weather – that’s a huge one – as well as different pests and diseases that are damaging crops potentially. And then the markets – seeing how the actual sale price is doing and the fluctuations in that will obviously affect profitability.

So there’s different business models for every farm. The way our farm is structured and we’re able to maintain profitability is to have a low cost-of-production. That really helps so that whenever we’re putting in a crop, we try to keep our expenses as low as possible. So even if we do have a drought like 2012 or if the market has a downturn like it does right now, we can still be profitable through those years.

What that looks like on our farm when it comes to low cost-of-production, you can mostly see that with the equipment we use. All of the equipment on our farm is decades old. Even when we get a “new” piece of equipment, it’s still very old. And then the guys spend all winter doing all the maintenance and repairs themselves for the equipment. They’re very talented that way. They’re very mechanical. My father-in-law also went to college for mechanical engineering so they even do some major modifications to equipment that will save them from having to buy that equipment or buy the modification. It saves them a lot of money that way, and that obviously helps the budgeting aspect of what we do.

It might be easier for me though if they had the nice, new tractors that are easier to drive. Instead we have these tractors that all have their own tricks to them, so it makes it tricky for me. But in the end, I guess it’s best for the farm.

And we joke around a lot that there’s no need for us to ever go to a casino because we’re gambling enough every day as it is here on the farm.

So, that’s economic sustainability for us here on the farm.

Thank you.