Can You Find the 5% That Changes the Outcome?

April 24, 2026 | AgFocus-Ag Focus

Over the years, I’ve learned that the most productive conversations with our customers don’t always happen when times are easy. They happen in years like this—when margins are tighter, assumptions are being tested, and every decision carries more weight. Lately, many of the discussions our team has been part of haven’t focused on expansion. They’ve centered on something more fundamental: how to stay profitable in the environment we’re in today. What’s stood out is how often the answer isn’t a major overhaul, and it isn’t chasing one silver bullet. It’s a series of small, disciplined decisions that add up. One example has come up repeatedly in conversations with our customers and lending team—and it’s worth sharing because it keeps the focus where producers have the most control: the plan, the assumptions, and the operating details.

THE 5% QUESTION WE’RE HAVING WITH OUR CUSTOMERS

Most producers don’t need reminders that this is a tighter year. They feel it in cash flow projections, operating decisions, and the thinner margin for error. What’s different isn’t a single input or one market factor—it’s how small the gap has become between plans that work and plans that don’t.

That’s why many recent conversations have shifted from growth to a practical question: How do we stay profitable right now? The best answers we’re seeing usually come from improving the parts of the operation you can measure and manage—not from making financing moves that may look helpful today but create tradeoffs later.

Here’s an example that keeps showing up because it’s so realistic.

Consider a fairly common corn budget—roughly $1,000 per acre, based on a 250-bushel yield at $4 corn. On paper, nothing about that looks out of line. But in a tight-margin year, it doesn’t take much to change the outcome. A difference of 5% to 6% in the plan—about $50 to $60 per acre on a $1,000 budget—can be the swing between a positive and negative Debt Service Margin.

On a 2,000-acre operation, a $50–$60 swing adds up to roughly $100,000 to $120,000. Not because something is fundamentally wrong, but because in this environment the margin for error is smaller.

What makes this insight useful is that $50–$60 rarely comes from one big, disruptive cut. More often it’s found gradually—five decisions at $10, or ten at $5–$6. None of them change how an operation farms. But together, they change the outcome.

We most often see that 5%–6% hiding in places that quietly drift over time: machinery ownership and utilization, repair and maintenance trends, input timing, freight, custom work decisions, and assumptions that haven’t been pressure-tested in a few years.

In stronger cycles, small inefficiencies are easy to live with because margins absorb them. In tighter cycles, they show up quickly, usually in cash flow. The encouraging part is that many operations are closer to breakeven than they realize, and closer to fixing it than they think.

This year isn’t about perfection or waiting for conditions to improve. It’s about asking a simple question now: Where can we realistically find 5%–6%? (On a $1,000-per-acre budget, that’s roughly $50–$60 per acre.)

When producers take the time to work through that question—line by line and assumption by assumption, the answer is often more attainable than expected. If cash flow feels tight, the solution may not be doing more; it may be doing a few things slightly better, with more intention and discipline. In this environment, small decisions matter—and sometimes finding the right $50–$60 per acre makes all the difference.