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Imagine driving a grain truck down a steep grade into the Ohio River Valley without a speedometer. If the brakes and transmission work, you can do it, of course. But that missing gauge could mean a speeding ticket.
Today's farms and ranches are like that truck, humming along with mechanical and biological efficiency. But their financial records are missing easily read graphics that could help avoid losses.
Barry Dunn, dean of the college of agriculture and biological sciences at South Dakota State University, wants to change that.
Dunn, an expert in ranching systems, has worked with some of the nation's largest ranches to develop dashboards that sum up key performance indicators.
“In this world of information overload – whether you're a dean of a college or a manager of a livestock operation – you have lots of information,” Dunn says. Unless you're an accountant, finding useful patterns in line after line of data can be hard. Dashboards are computer programs that do calculations in the background to distill data into graphs.
“The goal is to get this data very succinct and on one page,” Dunn says.
Dashboards typically show line graphs, bar graphs, or pie graphs. Key performance indicators aren't just financial. Dunn has worked with ranches that highlight cow pregnancy rates, calf weaning weights and rates, and inventory over time, such as the number of mature cows on January 1. Financials might include cost of each calf produced, total annual cost per cow, and net income per cow. For grain producers, dashboards may show bushels per acre, test weights, cost per acre, cost per bushel, and profitability per acre, Dunn says.
Dunn's interest isn't just theoretical. He ran a grain and livestock farm near Brookings before taking his previous job at Texas A&M University, where he developed a master's degree program in ranch management. His students have helped top ranches (including the King Ranch) look into using dashboards.
Large companies already use dashboards. Some farmers are using online dashboards hosted by other ag businesses. Key Cooperative in Iowa uses the AgroMetrix program to convert margins to bushels. A brokerage firm, Commodity and Ingredient Hedging, allows clients to track margins on grain or livestock hedged. For your own records, if you Google “dashboards,” Dunn says, “there are hundreds and hundreds of programs you can download.”
So far, most of agriculture isn't sitting in front of dashboards. The 475,000-acre Padlock Ranch based in northern Wyoming is a place where they make sense. Its many enterprises include a 10,000-head annual calf crop, hay and corn silage from 5,000 irrigated acres, and ranch vacations for hunting, fishing, and would-be cowhands. None of the 65 heirs and descendants of the ranch founders is involved in management.
All that gives ranch CEO Wayne Fahsholtz incentives to try dashboards. But when he searched for ones tailored to his operation, he says, “There was not anything that just jumped at us.”
One of Dunn's students, Jennifer Johnson, prepared graphs of the ranch's return on equity and assets, debt-to-equity ratios, crop costs, and more for the past five years. (Dunn is on the ranch's board of directors.) But for now, Fahsholtz and his crew only have time to draw boxes around key information on spreadsheets.
“I really like the concept. I just don't know how to find time to put this stuff together,” he says, sounding weary after days of fighting 80,000 acres of range fire and searching for hay and pasture for 3,500 displaced cows this fall.
Still, he plans to pursue dashboards.
“I've been in meetings where you hand out four or five pages of financial information and everybody's eyes glaze over,” he says. Dashboards might also be helpful with landlords. For those in long-term relationships with the ranch, he says, “I've been open with what our costs are.”
Potential uses for crops
Norm Brown, who farms 1,500 acres of corn and soybeans near Aledo, Illinois, and finishes 40,000 hogs annually, is experimenting with dashboards. He's using them mainly for monitoring performance in his swine enterprise. Brown has an advantage over most. He also owns FBS Systems, a farm accounting software business. FBS has partnered with Theoris Software to sell a dashboard program, Farm SERVey, for agriculture.
“Dashboards are like Excel graphs and spreadsheets on steroids,” Brown says. At a conference for his customers, none were using the program yet, but some liked the idea of replacing laborious graphs with an automatic web-based program.
Brown's program updates the web-based dashboard automatically – overnight or as frequently as every 15 minutes. It can be displayed on tablets, smart phones and personal computers. And it will send out alerts.
Other farmers who are meticulous record keepers aren't yet using dashboards.
“At this point, it's still a challenge for us to get all the season's data into FBS [Brown's accounting software] in a timely manner so we can run reports,” says Angela Knuth. She and her husband, Kerry, grow corn and soybeans near Mead, Nebraska. “We are anxiously awaiting the day when the data collected in the cab display and other electronic devices seamlessly upload into FBS, and manual entry is a thing of the past,” she says.
“We have thought of hiring help to do the entries, but instead, we keep waiting for someone like John Deere to come up with a turnkey system we can purchase,” she adds. “The good news is that the industry is aware of the inefficiency of the above scenario. We are starting to hear of products out there addressing the problem. But as of right now, we don't have a solution. It's a goal to be current enough to be able to use a dashboard, but we just aren't there yet.”
• www.fbssystems.com/Portals/116265/docs/Farm Servey Product Sheet.pdf