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| You don't just pay for employees by being able to cover more acres. Some may find opportunities to profitably add an employee without adding any acres.
Let's say you have livestock so you can't find the time to spray your first herbicide application in the spring during calving season so you hire the first shot done. Maybe it's 1,500 acres and maybe you spend an extra $8 per acre over what it would cost to do it on your own. There is $12,000 towards an employee.
In my situation I could not fertilize everything, fix everything and unload all of the grain bags without more help. I wanted to add grain bagging because it was going to make me $0.30/bushel over what I was doing (just having the custom harvest crew send it to town during harvest).
If I was going to keep throwing that $0.30+ per bushel away, I was going to be throwing the equivalent of several employees salaries away.
So I added an employee just on bagging alone. Then the bagging worked well and there were more people available around harvest time and I realized if I added one more person I could save a lot again by doing harvest on my own. Don't need lots of people when you're bagging.
So over time, without adding hardly any acres, bagging has resulted in two more employees and has also resulted in me being significantly more cost efficient.
Next step now that I have employees and an extra tractor for a graincart at harvest is another planter for more punctual planting. Who knows, maybe some years this will result in excess capacity that allows some custom work.
I believe that with time we will slowly migrate towards hauling our own grain out rather than having a guy run the unloader for hired trucks. Not because running trucks is a money maker but because we have some trucks anyway and we have employees anyway. Those are sometimes sunk costs that are paid for by other aspects of the operation. If we can keep them bringing income in or cutting costs for more of the year, it's just icing on the cake.
Edited by dpilot83 3/11/2019 12:32
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How many acres to pay for employee?
