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Cost of production key when managing financial stress

An ag economist concerned about managing financial stress on the farm emphasizes knowing the cost of production.

Dr. Joleen Hadrich with the University of Minnesota says it’s essential to an effective marketing plan.

“So you know if it costs you $3.70 to produce that corn, I know you have to sell at at least $3.70. And if I have to sell below that, how much can I afford to do that while considering the other crops on your operation?”

During a Minnesota Farmfest virtual forum on farm stress and safety Tuesday, she said cost of production also factors into crop insurance purchases and discussions with lenders.

“And if you do have to come to the point of cutting your input costs in a strategic way, it helps you identify what line item you want to pull from.”

Using fertilizer as an example, Hadrich says a grower might consider bartering some corn with a dairy farmer in exchange for manure.