Using custom work to add more revenue to the farm

Using custom work to add more revenue to the farm

Custom spraying and harvesting could be an option for crop farmers looking to add more revenue to the business, but farm machinery evaluation comes first

I’ve been looking into different ways to bring additional revenue into our corn and soybean operation. Our farm had a few opportunities to do some more custom work last year, mainly custom spraying and harvesting. For the upcoming crop year, it looks like we might be able to pick up more custom work. We farm quite a few of our own acres, but we have enough seasonal employees that I think we can take on the work. But how much? – B.B. - Illinois

Custom spraying and harvesting could be an option for crop farmers looking to add more revenue to the business, but equipment evaluation comes first

Custom farm work has been more attractive lately to many grain farmers as an opportunity to generate more revenue, like you mentioned. The key to making custom jobs work is ensuring that your costs don’t rise in a way so that the custom work doesn’t make financial sense.

Related: A quick guide to farm asset utilization

You mentioned that your seasonal employees are doing the custom spraying and harvesting work. If these employees are already working for you, and can take on extra custom work right along with the work they’re doing for your operation, then you probably aren’t increasing your labor costs substantially. Sure, you’ll be paying for additional hours worked, but that should be about it.

Another thing to think about is your current equipment line and how it’s being used. Will doing more custom work help you use your current farm equipment more efficiently? Or will it be overextended? You might run a farm equipment usage study to determine how you’re currently using your equipment line, and what it would look like if you do additional custom spraying or harvesting work.

Related: Build efficiency into your farm business

If it makes sense from a financial standpoint to take on more custom work, then you might move ahead with it. Just be sure to figure out the point where it wouldn’t make financial sense for you to accept more custom jobs — for example, needing to buy additional equipment to complete the work — and stick to that point.

Frye is president and CEO of Water Street Solutions (www.waterstreet.org.) Send your questions to Darren at waterstreet@waterstreet.org.

TAGS: USDA
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