WHY A 5% CUT MATTERS FOR 2026

January 30, 2026 | AgFocus-Ag Focus | BusinessFocus-Business Focus

We see it every day - small, thoughtful changes can have a meaningful impact. A 5% cost adjustment may seem minor, but it can free up cash flow and reduce pressure when it matters most. Our role is to help local businesses and ag producers see those opportunities clearly and make confident decisions for their future.

 

TURNING COST CONTROL INTO CASH FLOW: WHY A 5% CUT MATTERS FOR 2026

 

 

This article was inspired by insights and figures shared by Tina Barrett, Executive Director, Nebraska Farm Business Inc, whose work helped shape the conversation around cost control and cash flow.

 

 

As producers look ahead to 2026, tighter margins continue to put pressure on farm cash flow. With market prices and yields largely outside your control, cost management remains one of the most effective levers you can control. Recent data from Nebraska Farm Business, Inc. shows that even modest reductions in operating expenses can have a meaningful impact on both profitability and liquidity.

The Power of a 5% Reduction

A 5% cut may sound small, but spread across an entire operation, the dollars add up quickly.

• Irrigated Corn:
Average direct expenses of $856 per acre
A 5% reduction = $42.80 per acre
On 700 acres = nearly $30,000 in savings

• Irrigated Soybeans:
Average direct expenses are around $635 per acre
A 5% reduction = $31.75 per acre
On 700 acres = over $22,000 in savings
Combined, that’s more than $52,000 in operating expense savings, dollars that strengthen
cash flow and improves financial flexibility within the operation.

Where Do 5% Savings Come From?

Reaching a 5% reduction is rarely about one major change. It’s usually the result of many
small, intentional decisions made across the operation:
• Evaluating seed choices to ensure they align with soils and management goals
• Improving fertilizer efficiency through timing, placement, and rate decisions
• Managing machinery costs and field passes
• Reviewing chemical programs to avoid overlapping or unnecessary applications
• Taking a closer look at every line item in the operating budget
Over time, these incremental decisions can add up to meaningful financial improvement.

The Bottom Line
For a typical irrigated corn and soybean operation, a 5% reduction in operating expenses can significantly improve cash flow and strengthen working capital heading into the next production year.

We believe disciplined cost control is one of the most practical ways producers can protect and position their operations for the future. Small adjustments today can create confidence, flexibility, and resilience for 2026 and beyond.