How to Decrease On-Farm Expenses

Although there are numerous ways to decrease expenses, one of the first areas of focus should be conservation. Whether you’re conserving energy, water, fertilizer, or passes through the field, reducing the amount you spend on inputs can greatly increase the profitability of your farm.

The first thing to do is figure out where you spend the most money. That’s most likely where the most money can be saved. For many farms, energy is one of the largest operating costs.

Electric Costs

If you pay more than $0.10/kWh for electricity, energy savings will likely exceed the cost of a solar system even before government incentives, grants, and tax deductions. Installing a solar system could reduce or eliminate your electric bills and even generate payments from the utility for energy production that exceeds onsite use.

Fuel Costs

The best way to reduce fuel usage overall is by upgrading inefficient equipment (especially from propane or diesel to natural gas or electric).

If you use propane and pay more than $1.50/gallon, converting to natural gas could save thousands on annual energy costs. One gallon of propane and one therm of natural gas contain roughly the same amount of energy, but one therm of natural gas costs as much as 70% less than one gallon of propane. These savings, in addition to the higher performance of updated equipment, can produce a brief payback period on equipment that will continue to cut costs far into the future.

The second best way to reduce fuel usage is to make sure the equipment is running effectively by installing controllers to ensure the equipment only runs when necessary. Variable speed drives installed on irrigation motors, for example, limit the motors to only the energy necessary to pump the water needed at any given moment. Updating equipment and/or adding controllers could save you 30-40% or more on annual fuel costs.

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