What is in this article?:
- Detailed monitoring of farm energy costs can improve bottom line
- Need more than a general idea
• Adding a little more detail in your records may help manage the potential risks of farm energy expenses, come rain or shine.
Farmers should not only remain cautious about commodity prices, they should also keep an eye on the cost of fuel used in their operations.
Some good advice is to review the past five to 10 years and take a close look at energy expenses.
Did the recorded expenses for propane, electricity, diesel or gasoline used on the farm change noticeably during any of those years? Are the increases — or decreases — primarily due to fluctuations in energy consumption, changes in the market price or other factors?
“Fluctuating energy prices can be troublesome,” says Mark Hanna, ag engineer with ISU Extension and Outreach.
“Knowing whether fuel costs are related to changing prices or specific changes in your energy needs is a useful first step to cutting expenses.”
The weather offers an explanation for some of the variations you will find. Undoubtedly, your grain drying costs the past few years will reflect the weather conditions, with fluctuations in your demand for propane, electricity or natural gas.
However, adding a little more detail in your records may help you to manage the potential risks of farm energy expenses, come rain or shine.