Four ways to help customers weather the inflation storm

Cost inflation continues to hamper the global economy. U.S. farmers, ranchers and agribusiness managers are not immune to this margin-tightening pressure. Many cost sectors that affect ag businesses are riding the inflationary wave, including:

• Diesel fuel
• Crop inputs (herbicides, fertilizer, seed, etc.)
• Livestock feed
• Machinery and equipment
• Buildings and structures
• Labor
• Land

Higher costs driven by inflation are in some ways an unavoidable reality today. But there are ways to adjust to minimize inflationary pressure. Evolving how ag businesses are managed and operated can help your customers weather the storm of inflation that’s expected to last through 2023. Here are a few ways to work with your customers to help minimize the impact of inflation on their businesses.

Plan ahead and communicate often

Good communication and a well-thought-out plan are among the best ways to make sure your customers are doing what they can to stay ahead of ag inflation. Create a plan for things like purchasing key inputs and marketing grain or livestock. Doing so will enable your customers to see ahead of time what kind of revenue they need to generate. And they’ll know what they need to do to achieve the required revenue.

Not even the best-made plan goes off without a hitch. That’s why it’s important for your customers and all their business partners to keep the communication lines open. Things always change, and this kind of open communication will help your customers react and pivot with confidence if necessary.

Explore options

Some customers may be used to a fairly consistent routine for buying things like crop inputs. But there are likely alternative options for many products. One way you can help customers is by sitting down, auditing their purchases and determining if there are other buying strategies or lower-cost options that can help. Your expertise can help customers make more cost-efficient buying decisions, including with risk management.

Think differently

Tried-and-true management and operational strategies may work great in economically “normal” years. But times of high inflation may call for new thinking. Crop producers, for example, can explore new ways to cut costs with attention to every specific crop acre and its fertilizer and herbicide needs. Such new thinking can be especially helpful if “Plan A” products are in short supply or costs have rocketed higher because of inflation.

Try new tools

It seems like there are new tools hitting the market for farmers, ranchers and agribusiness managers. New technology may be able to help your customers offset some of the rising costs they’re facing. If they’re reluctant to make wholesale changes to their businesses to save money, encourage them to conduct smaller pilots or trials to determine what innovations can help them most.