Last week, I started talking about how it’s important to know whether you’re on track to ‘beat your best’ as a farmer, continuing to improve. But I’m not just thinking about the typical areas that come to mind right away – like raising yields, selling the crop at a higher price, lowering input costs or working for a lower tax bill.
Farmers have to stay competitive – just like athletes, as I talked about last week. To be truly competitive in today’s farming environment, you need to be thinking beyond the goals I mentioned above. You need the right numbers, too – the right metrics around the farm’s efficiency, to know the trajectory you’re currently on. But these metrics aren’t being tracked by your cash accounting bookkeeper or tax advisor.
Also, the solution here isn’t tracking every possible metric. It’s easy to start feeling like you’re getting bombarded with data – while knowing you can’t possibly use it all, nor would it be worth your time. This isn’t about tracking more metrics or data, but figuring out what’s most worthwhile to be looking at – to help make future decisions.
Where to focus
Think of it in the way an athlete and their coach might use statistics about the athlete’s performance to help keep moving the athlete’s game forward. Nearly everything about professional athletes’ performance is tracked – talk about a lot of data.
Let’s take a pro basketball player, for instance. Not only would the number of points they score in each quarter be tracked, but probably also where they took the shot from, whether it was a free throw, three-pointer or regular basket – and the percentage of shots taken versus made, in each of those categories. That’s just for baskets scored, not to mention rebounds, assists, fouls, minutes played – the list goes on and on.
As the player and coach put together a training plan to help the athlete improve, looking at all of that data at once isn’t useful. Instead, they might start by figuring out what the ultimate goal is for the player’s performance – and select perhaps just a few stats to track, to help determine whether they’re improving over time or not.
Maybe the player and coach decide that the main goal is to increase the player’s offensive abilities. So they might decide to track the ratio of the total baskets and assists he makes, against the amount of time he plays in each game – and implement a training plan to increase that scoring ratio. Watching the trajectory of this metric over time can help give the player the best chance of success.
The ultimate goal
Knowing the end game or end goal before selecting particular metrics is likely the most important step. It’s the same for us on the farm. We have to be clear on our ultimate goal for our farm’s performance. Generally for a farm business, the goal is for the farm to be financially successful and profitable.
Confusion can arise when we start focusing on metrics that, by themselves, won’t necessarily help us ‘win’ at our ultimate goal. For example, concentrating on getting the highest yield or highest price alone doesn’t equal financial success for the farm. In fact, there may be cases when it may be more profitable to actually shoot for a lower yield.
This may mean challenging your agronomist about next year’s crop plan in certain ways. Make sure that reaching your farm’s ‘best’ efficiency from a financial perspective is part of that conversation.
Get clear on what your ultimate goal is for the farm – and then determine specific metrics that will you let you monitor your trajectory toward the goal of beating your best. Consider getting a ‘coach’ to help with this – an advisor for the farm can help you weigh out your goals and which metrics will be the most important so you can monitor and watch your progress.
The opinions of the author are not necessarily those of Farm Futures or Farm Progress.