Analytical software can assist farmers in maximizing profits

With crop prices projected to remain low in the foreseeable future and with the high cost of agricultural inputs making farmers less productive, crop-producing farmers should be looking at ways to be more efficient and profitable.

Today’s farms are complex operations with workers and machines interacting over large areas under tremendous time pressure dictated by unpredictable weather events. The right mix of capital investment, labor and technology is critical to success, yet most of these decisions are made based on gut instinct, experience or tradition. Industry specific analytical tools to support these decisions are lacking.

There is great opportunity for these costs to be better understood, measured, and managed. In addition, crop yields are dependent upon timely field operations in often narrow, weather dependent time frames. Yield losses due to late planting or harvest can be as high as 30%, resulting in lost revenues of $200 per acre or more. Farmers need software tools to support their decisions as they work to optimize their resources for timely, cost-effective field operations. Effectively managing these decisions will have significant dollar returns for every acre on the farm.

Fortunately, in central Ohio, a group of folks recognized an opportunity to assist farmers with these complex issues and developed software called CropZilla. The CEO, Brian Watkins, is a sixth generation grain farmer from central Ohio. Together with software veteran, Dale Jefferson, the two decided to start a company that would combine farming and big data to create predictive analytics for farms.

CropZilla is operations simulation software for planning and decision support for crop-producing farms. CropZilla creates a digital model of farming operations, built upon specific geography, equipment capacities, and labor resources. It allows farmers to test decisions on operational plans for both timing and cost. While the CropZilla digital farm model greatly improves farm operations planning, more importantly it is a strategic decision-making tool.

Besides allowing farmers to optimize their operational resource mix, it provides analytics for the key long-term decisions related to business growth, capital investment, and adoption of technology. CropZilla is also a tool for field plans, by allowing farmers to quickly and easily develop a comprehensive farm master plan on a field-by-field basis for the upcoming growing season. CropZilla far exceeds the capability of spreadsheets, capturing a myriad of factors which affect productivity and using complex algorithms to identify which of those factors are most limiting.

Farmers can test multiple scenarios in CropZilla at once, so they can see the operational and financial impact of making significant changes or just minor tweaks to their growing plan. This can help the farmer decide if it’s worth purchasing that new tractor, hire new help or rent additional acres.

The software allows a farmer to plan the season by comparing “what if” scenarios to optimize profit and make informative decisions such as:

• Should a farmer use one or two combines
• Variable cash rent versus fixed rent
• Commercial drying versus owner dryer
• No-till versus strip till versus full tillage
• Trading equipment
• Adding part time help
• Custom hire versus owned sprayer
• Rental versus owning equipment
• Pre plant nitrogen versus sidedress nitrogen
• Operations cost of extra passes (fungicide, etc.).

The above are just a small sample of the software capabilities. For many farmers this software can be a valuable tool that could potentially improve profits per acre and give the farmer a better understanding and control over their field operations.

CropZilla, is just one of several software programs offering field management, planning and decision support for farmers. You can learn more about it at: www.cropzilla.com

I urge farmers to explore and evaluate all types of software options that can help them with difficult operational decisions, and ultimately increase profit per acre.

Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through www.HolbrookManter.com or at BRavencraft@HolbrookManter.com