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Managing tighter margins in 2015

h2014_Chris_hurt

In a world where margins are tighter, Purdue Ag Economist Chris Hurt says farmers are going to have to make some adjustments.

Starting in the short term.  “We look very quickly at capital expenditures,” he says.  “This would be cutting back on purchases of new machinery, cutting back on things like irrigation, tiling, and cutting back on repairs and improvements to machine sheds.”

He says it also means cutting back on implementing technologies in the short term.  Unless – it can increase the return on investment.

And, Hurt tells Brownfield, adjustments will be needed in the long-term.  “Farmers will be asking for lower cash rents,” he says.  “But landlords currently are in pretty strong position to hold onto cash rents.  If we can’t see more recovery in commodity prices – those cash rents are going to have to come down.  Which will have some implications towards land values.”

Hurt made his comments during the Indiana Certified Crop Adviser conference.

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