Planning for Contingencies

This article was originally published in the January issue of Soy Perspectives magazine.

Planting and harvest in 2019 were bookended by an extended winter, an early frost and a fall snowstorm, leading many Illinois soybean producers to experience yield and profit losses due to the short window for plant development. Throw in a market-reducing trade war with China and delay in congressional approval for the United States-Mexico-Canada (USMCA) trade pact and, at the very least, maybe producers can look back for lessons that can be learned from 2019.

Upgrade Farm Technology Assets

It’s easy to see why farmers may be reluctant – or financially unable – to invest in emerging ag technologies and equipment advances. However, farm management technologies can provide a more precise view of an operation, helping to identify potential inefficiencies. The right tech tools can also give farm managers an opportunity to more proactively micro-manage expenses and finances and limit risks to their operations during challenging times.

“Sustainability is about doing more with less. Once you have economic sustainability, then all of the other aspects of sustainability can become possible, especially in production agriculture,” says Patrick Christie, founder and EVP of Conservis, a farm management software company serving midwestern producers and farm managers. “You can’t improve what you can’t measure.”

Investing in agtech can help farmers sustain field performance and agronomic opportunities, according to Christie. He recommends two core areas for farmers to focus upon: data collection, and an investment in a pro data system that can optimize the information programmed into it.

“Getting data that are high quality from your field, or your geodata, organized is a top priority. We’re finding that farmers who are able to leverage data successfully are connecting all of their field data into a business system. A lot of money can be made or lost, for example, through how you manage your inventories. If they haven’t already done so, farmers need to organize their farm-centric business information,” Christie says.

University of Illinois farm economist Gary Schnitkey says 2019 income for some Illinois grain farms was negative. And with farm income steadily declining, Christie understands producers are reluctant to spend money on technology this winter. But, he encourages them to do so anyway.

“When there is revenue pressure, success comes down to efficiency and costs. Farms have a lot of moving parts. An opportunity to save money may come after a decision window closes, but you must maximize revenue opportunities. Having a better view on when to market or having a data set that can move alongside your crops as they go to market can be very beneficial,” he says.

Christie offers an additional economic benefit to investing in a good data collection system for the farm. “Because we are in a depressed farm economy, bankers are looking for more information to confirm their credit is properly risked. Farmers that can present a complete, core management view of their farms to bankers or lenders have an advantage in that relationship. Farmers that can deliver a complete business system can transform their opportunities,” he says.

Read the full article on ilsoy.org.