How can you adjust your budget when feed prices change?

2 Compare feed alternatives

The second step to adjust your budget when feed prices change is to compare feed alternatives that can meet your production goals and nutritional requirements. Depending on the availability and price of different feed ingredients, you may be able to substitute or supplement your current feed with cheaper or more efficient options. For example, you may consider using by-products, forages, or homegrown grains instead of commercial feeds, or adding enzymes, additives, or supplements to improve the digestibility and nutrient value of your feed. However, you should always consult with a nutritionist or an extension agent before making any changes to your feed program, and evaluate the impact of feed alternatives on your animal performance, health, and product quality.

3 Negotiate feed contracts

The third step to adjust your budget when feed prices change is to negotiate feed contracts that can protect you from price volatility and secure your feed supply. You can negotiate feed contracts with your feed suppliers, grain growers, or cooperatives, and specify the terms and conditions of your feed purchase, such as the quantity, quality, price, delivery, and payment. You can also use hedging or futures contracts to lock in a favorable price for your feed or grain, and reduce the risk of market fluctuations. However, you should be aware of the advantages and disadvantages of different types of contracts, and seek professional advice before entering into any contractual agreement.

4 Diversify your income sources

The fourth step to adjust your budget when feed prices change is to diversify your income sources and create multiple streams of revenue. You can diversify your income sources by adding value to your products, expanding your markets, or developing new products or services. For example, you can process your products into cheese, yogurt, or meat products, sell them directly to consumers or niche markets, or offer agritourism or educational activities on your farm. Diversifying your income sources can help you increase your cash flow, reduce your dependence on a single market, and enhance your competitive advantage.

5 Review your budget regularly

The fifth step to adjust your budget when feed prices change is to review your budget regularly and update it according to the changes in your income and expenses. You should track your income and expenses on a monthly, quarterly, or annual basis, and compare them with your budget projections. You should also monitor the market trends and forecasts for feed prices, and adjust your budget accordingly. Reviewing your budget regularly can help you identify any gaps or problems in your financial performance, and take corrective actions to improve your profitability.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?