Details for excellence in agriculture

Why do some farms make money while some farms lose money?

Aerial view of tractors harvesting corn

In every part of agriculture there are farms and farmers that excel in what they do. Have you ever asked yourself why there are fewer and fewer farms each and every year? Farming is a tough business. The markets continuously change and if you do not keep up, your farm could be terminal. Year in and year out, the best farmers continually separate themselves from their peers by having above average yields, high quality crops or livestock, seek to do things in an environmentally responsible way, and ultimately achieve above average profitability in their farming operation.

I have asked many farmers, what is their secret? How do they always seem to hit it right? The answers varied between farmers, but there seems to be a common theme or thread between the top and the rest. The reasons below are not in any particular order but can be adapted by any farmer that is open to improvement.

Reason No. 1

Farmers that do well have a plan that is written down, and as my mother used to tell me, “Have a plan and stick to it!” They take the time to thoughtfully look over the plan on a regular basis. Many have great intentions when formulating a plan, but then fail to follow up and make any necessary adjustments due to changes that might have occurred. It can be difficult to stay on task and look at the long-term strategy without getting sidetracked. Remember, it’s a marathon, not a sprint. To put this into words, keep your eye on the prize and stay focused!

Reason No. 2

Farmers that consistently make money know their numbers. They know their costs for labor (including their own), machinery, land, inputs, planting and harvesting costs, and usually market above their cost of production. Even in years of disaster or rising cost that result in a farm loss, profitable farms use the income tax tools available to help spread the losses over several years. For large, planned expenditures, it is important to count the cost prior to spending the money. For example, where I live in the Thumb of Michigan, the crop farmers know that subsurface drain tile pays every year. On soils that are not tiled or rented, farmers will decide if it’s economical to continue to farm it or let it go if it doesn’t fit their plan.

Reason No. 3

The most profitable farmers are prepared and ready to go when the season starts. Breaking news! Spring will be here and some farms will be scrambling to be ready to go. Those that are prepared will have their equipment clean, greased, repaired and ready. All supplies will be available when needed. In the world of field crops, you never get over a bad start. When soil conditions are right, the best farmers are planting.

Reason No. 4

This could easily be the most important and most common reason given by farmers when they consider why they do well. They pay attention to the details. They do this for all aspects of the farming operation. Examples include making sure the soils are not too wet or too dry; keeping fertility up to date without overspending; planting is more precise with the right depth and population; and weed control is done on time using the right herbicide for the job while keeping an eye on controlling herbicide resistant weeds.

Reason No. 5

Great farmers know what they know and what they don’t know and surround themselves with good people to add the strengths of others into their team. Even when we seem to get a good handle on something, it changes. They use trusted resources and learn from others. Technology is not seen as something to run away from but is embraced and incorporated into the operation when it makes sense. The best never stop learning. They do their homework and never seem to be satisfied with what has been done compared to what can be done.

Reason No. 6

The last reason I want to consider is mindset. It may not necessarily be found on the most profitable, efficient or the most beautiful farm. However, I think it’s found on the healthiest farms. The healthiest and possibly the most satisfied farmers know they cannot control everything. As one of my farmer friends reminds me, “It’s not worth it to get worried about the weather during planting season. It may be late, but we’ll get it.” He says the same thing about the harvest despite nasty weather that may linger for weeks.

Well, I think that farmer certainly gets it! Farm stress is very high in today’s environment. Taking care of crops and animals is hard on farmers and agribusiness professionals. Caring for your own health and wellness in this high-stress profession is often overlooked but is just as critical as caring for your farm business. Considering the stressors and uncertainty that every farmer faces, dealing with stress can overwhelm a person. Help is available.

If you or someone you know is feeling stressed in an unhealthy way, there are excellent resources available for farmers today. Michigan State University Extension has tools available at the Managing Farm Stress website.

For more information contact Phil Kaatz at 810-338-5242 or

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