Budgeting for cost increases

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Sarah Hess is in the middle of budgeting for Farm Progress Cos.' next fiscal year, which starts in July. The company's magazines include American Agriculturalist, The Farmer and Farm Futures.

MB: What are your biggest concerns?

Hess: The next postal rate increase and paper price increases.

MB: Does one worry you more than the other?

Hess: Paper, because it's so unpredictable. You never really know when it's going to happen and for how much. I try to budget for two paper increases a year and, if that happens, great. If there's more than that, well ... we figure something out. With postal, we're doing everything we can right now. We're really getting our magazines into the mail stream extremely far into the delivery. I think we'll get hit hard, but not as hard as people who aren't co-palletizing, and co-mailing and everything else.

MB: Does the constant increase in prices for manufacturing and distribution make you want to do more with digital editions?

Hess: Well, I don't think our market is really ready for it. Some of these rural areas just don't have access to the technology, and a lot of our subscribers are out all day in the fields. So digital editions just aren't as relevant for them. We are putting more things on our Web sites. One thing that works for us is to put shorter stories into the printed edition and then tell people, if they want more information, to go to the Web site. That drives some traffic. ... In time, perhaps we can give them a choice of how they want to receive the information, but I think we're a long way from that.

-Mark J. Miller

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