I've been in agricultural business for over 30 years and one thing hasn't changed: We always need better records.
But records take effort and time, both of which cost money. Finding the right balance between what's needed to manage your business while spending as little time as you can keeping track of data is a challenge.
I like to keep things as simple as possible. My philosophy: What's simple is used. Something that's complicated may impress someone, but likely will never be used.
Basic balance sheet and income statement information, along with production information such as crop yields and cost of gain information, is what we use to develop risk management plans for our clients.
We put together a plan that includes what clients need from the marketplace to make all their payments — pay all expenses, living costs, depreciation — and achieve a desired level of profit. The plan is concise enough that we can print it on one 81½2 × 11" sheet of paper. I have seen it stuck on a refrigerator door.
I think this will be changing, however. To take advantage of the technology that is available in seed, fertilizer, chemicals and tillage systems, we need more information. Then the information and data needs to be analyzed and used for decision making. Otherwise, it's a waste of time and money.
In October I rode the combine for awhile with a client of ours from Churdan, IA. The yield monitor recorded a 178-bu/acre average on the 92 acres, and it was not his best field. Coincidentally, it took him about five hours to harvest that field.
I was amazed at the yields because this area had excessive heat and little rain last summer. The field has been grid-mapped and in a GPS management system with variable rate application since 1996. It has taken our client time and money to get where he is, but it's paid off.
We have all heard about identity-preserved grain and source-verified crops and livestock for so long we are almost numb to it. It will be a reality. For any skeptics, wait until some grain or meat is contaminated by terrorist activity and it will be pushed along a lot faster. The issue will be consumer-driven, and there will not be a choice — for anyone.
As a conscientious producer, the sooner you can get there with your records, the better you will be in two ways:
First, by using the data to increase your yields and reduce your costs. There is another $50-100/acre to be made when agronomic best management practices are combined with better machinery utilization.
Second, there will be more people interested in buying your products — maybe not at a premium, but at least buying them.
The “fly in the ointment” is that many data systems are not convenient. Most people just don't like keeping records.
There are many services that can help you with your recordkeeping, for a fee. However, it's tough to beat a new service called Crop Check, offered on the Internet by the Iowa Soybean Association and the North Central Research Program (see related story on page 8). The software's free at www.cropcheck.org. And, more than just recordkeeping for your finances and production data, it also gives you the opportunity to compare your farm, confidentially, against others using the service.
No matter how you keep records, it's clear you're going to need more and better data to keep farming. You need it for your own risk management plan. And, it's likely that lenders and landowners will continue to want to know about your farm before they do business with you.
Moe Russell is president of Russell Consulting Group, Panora, IA. Russell previously spent 26 years with Farm Credit Services as a division president. For more risk management tips, check his Web site (www.russellconsulting.net) or call toll-free 877-333-6135.