Precision Planting & Harvesting: Agronomics FAQ

Managing the business side of farming can be challenging, so we’ve compiled this FAQ to answer common questions about “running the numbers” (agronomics) on your farm. From budgeting to equipment decisions, Future Ag is here to help Alberta farmers make informed financial choices. 

Q: How do I create a basic farm budget for the year? 

A: Start by listing all your projected expenses (seed, fertilizer, fuel, labour, equipment maintenance, etc.) and income sources (crop sales, livestock sales, government programs). Alberta Agriculture offers business tools and software to help with budgeting.  

Break your budget down by enterprise if you have multiple crops or livestock – this will let you see which parts of your operation are most profitable. It’s important to be realistic with yield and price estimates; use your five-year averages or regional benchmarks.  

Once you have a draft budget, include a contingency for the unexpected (e.g. 5-10% of expenses as a buffer). Review your budget monthly against actuals. This practice will highlight if, say, fuel costs are running higher than expected, so you can adjust spending elsewhere. A solid budget is the roadmap for your farm’s financial year. 

Q: Is it better to buy new equipment or used to save money? 

A: This depends on your situation. New equipment comes with warranties, the latest technology, and often promotional financing rates. It can be very reliable and efficient (less downtime), which has its own value. On the other hand, used farm equipment (at Red Deer and Central Alberta Future Ag locations), especially 5-10-year-old tractors or combines, can often be purchased at a fraction of the new cost and still have plenty of life left.  

Many Alberta farmers successfully use pre-owned gear to reduce capital expenses. Future Ag offers both new and used options; for example, our used inventory in Red Deer and Central Alberta includes low-hour tractors that are thoroughly inspected.  

When considering used, look at hours of use, maintenance history, and whether parts are readily available. Also factor in that repairs will eventually be needed (perhaps sooner than with a new one). If you’re mechanically handy or have a smaller acreage, a well-maintained used machine might be your best bet financially.  

If uptime and cutting-edge features (like precision planting & harvesting guidance) are crucial, a new purchase might pay off in productivity. We often advise customers to calculate the cost per hour of ownership for both scenarios. Don’t forget to include depreciation, fuel efficiency differences, and repair estimates. By running those numbers, you can make a clear decision. 

Q: What financing options exist for farm equipment purchases? 

A: There are several financing avenues. Many manufacturers (Case IH, Kubota, etc.) offer 0% or low-interest financing specials on new equipment, especially during off-season promotions. For instance, through CNH Industrial Capital or Kubota Finance, you might finance a new tractor over 5 years at 0% interest – effectively using the manufacturer’s money for free. At Future Ag, we also partner with banks and farm credit institutions.  

Agriculture Financial Services Corporation (AFSC) in Alberta provides loans, and Farm Credit Canada (FCC) is another popular choice with flexible payment plans. If you prefer to keep cash free, leasing could be an option; you pay a lower periodic fee to use the equipment for a term, then you can either return it, buy it out, or upgrade. Leasing can sometimes have tax advantages (lease payments are expensed).  

Speaking of taxes, also consider the federal Accelerated Investment Incentive, which lets you write off a larger portion of new equipment in the first year – effectively reducing the net cost through tax savings. Before signing anything, compare the total interest paid under a loan vs. the cash discount for outright purchase. And always read the fine print – some “0%” deals involve hidden fees or shorter terms.  

Our Sales Department and financing specialists at Future Ag can walk you through options to find the best fit. 

Q: How can I improve my farm’s profitability without expanding acres? 

A: Improving efficiency and reducing costs are key. One approach is to analyze your input usage – could precision ag technology help cut waste? For example, using GPS section control on seeders and sprayers avoids overlap and can trim input costs by 5-10%. Many Alberta farmers have also adopted variable-rate fertilizing to allocate nutrients more economically.  

Another area is equipment maintenance: following a proactive maintenance schedule (oil changes, replacing worn parts) can prevent expensive breakdowns and extend machine life, meaning you invest less in new equipment over time. Also evaluate your marketing – locking in prices with forward contracts or using crop insurance (like AFSC programs) can stabilize income and protect against downturns.  

If you have underutilized assets, consider renting them out or custom work; for instance, if you own a sprayer, doing some custom spraying for neighbours can bring in extra revenue. Little efficiencies add up too: shop around for input prices, consider group buying with neighbours, and review every expense line in your budget annually to challenge whether it’s necessary.  

Lastly, keep an eye on cost of production per unit. Knowing, for example, your cost per bushel of wheat helps you make smart decisions like when a marketing opportunity is profitable or if a certain crop isn’t pulling its weight financially. Continuous improvement on these fronts can boost your bottom line even on the same acreage. 

Q: What record-keeping software should I use for farm finances? 

A: Good record-keeping is the foundation of running farm numbers accurately. Many producers use farm-specific accounting software like QuickBooks for Farms, AgExpert (by FCC), or Xero with farm add-ons. These allow you to categorize expenses/income by enterprise and generate useful reports (income statements, cash flow, etc.).  

AgExpert, for instance, is designed for Canadian farms and can even integrate crop and livestock records. The Alberta government’s agriculture site provides Excel-based tools as well if you prefer a simpler approach. The best system is one you’ll actually keep up with – so if you’re comfortable with spreadsheets, that can work fine, whereas if you want automation, a software package might be better.  

Make sure whatever you choose, you update it regularly (monthly at minimum). That way, when it’s time to meet the banker or make a big decision, you have current, accurate data at your fingertips.  

Agrinomics & Precision Planting Are Your Farming Friends 

Running the numbers and getting to terms with precision planting may not be the most romantic part of farming, but it’s certainly one of the most important. With solid budgeting, smart financing, and careful cost control, your farm business will be well-equipped to thrive for the long haul.

And remember, Future Ag isn’t just about iron and steel – we’re here to support your farm’s success in any way we can, including sharing knowledge and tools to help you make sound financial decisions on equipment and beyond. Here’s to farming smarter, not just harder!