Calcium Products - Is the price to high, or does it cost too much?
Calcium Product 98G

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Is the price to high, or does it cost too much?

Everyone wants to know how much does that cost? What is the price of that?

Are you concerned with the value on the bill (price), or are concerned with what that purchase can do for your bottom line, how it affects other areas of your business (cost). Price and cost are two separate terms, with two separate meanings.

Example: Comparing a JD 9660 combine versus a JD 4400

Price of JD 9660 - $150,000 no heads

Price of JD 4400 - $6500 w/heads

If you only ask the price, the 4400 sounds like a bargain. It’s 1/5 the cost of a 9660, has the heads as part of the deal. If they both can harvest grain what else besides the price is there to compare?

The problem is if you don’t figure the cost of each combine it is not an accurate comparison.

 9660 Cost

4400 Cost

 Repairs, its new so none

 Lots of repairs, its old

 Capacity, 15-20 acres per hour

 Capacity, 2.5-5 acres per hour

 Comfort, auto controls, grain loss monitoring

  Loud, hot, dusty, and loud

 Get harvest done quickly, get on with life  Harvest all winter, lose part of crop due to snow
 Opportunity cost of money  Pay for combine with sofa change
 Cost of fuel, 1-2 gal per acre  Cost of fue,l 3-5 gal per acre

There are many other cost that could be considered as well, for the guy farming 150 acres a 4400 is likely the right machine. If you farm a 1000 acres or more a bigger machine makes more sense. If you are not doing this kind of analysis with each purchase on your farm, you may be missing a better opportunity, losing money on a poor purchase, and not operating as efficiently as possible.

This kind of analysis applies to your fertilizer inputs as well. What is the value on the bill for lime (price). Should you buy a lime product that is $110 per ton, or one that is $22 per ton. Did you stop to figure the cost?

 

 

The Blogronomist is maintained by Craig Dick, head blogronomist and VP of Sales and Marketing. Here you will find a wide array of blog articles from Craig and expert guests on topics related to soil and crop health, farming, and so much more. If it’s not here, ask us!

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  • Article Reference:: Calcium Products, Inc.
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