MYFB — Ep. 2: Do you Manage by Instinct or Analytics?

Mind Your Farm Business (MYFB) is a 12-part audio series exploring a wide-range of farm business management topics. Featuring thought-provoking leading experts in an engaging format, MYFB is brought to you by RBC Royal Bank. You can find the full series by tapping here.

How many times have you let your gut make a big decision for you? If you’ve been in this farming game for any length of time at all, you likely have more than a few examples of when you just knew a decision was the right one or the wrong one.

In hindsight, it’s easy to see the shining examples of when our instincts proved us right, but we’re likely far less keen to admit when our hunch was off. Could that poor decision have been avoided with a little extra number crunching and leaving emotion out of it?

In this second episode of the Mind Your Farm Business series, host Shaun Haney asks Terry Betker, president of Backswath Management, about the perils and possibility of managing “by your gut.”

There’s no doubt, Betker says, that past practice patterns and past experience can be invaluable in making decisions on the farm, but instincts are closely tied to emotion, and when emotions are involved, what “feels” right may not actually hold up to the hard facts of solid numbers.

If you’re convinced that your farm needs more facts and fewer feelings, where do you start? If numbers matter, which ones matter most? And, once you have some ratios, numbers, dollars and cents, how do you put context around those numbers?

Betker covers those questions throughout the discussion in the episode below, and offers insight into building a resource base, including peer advisory groups (watch for Episode 5 for more on those). What’s more, Betker hones in on the importance of trendlines, and which type of farming enterprise may benefit the soonest from working analytics into the farm decision making structure.

Disclaimer: Royal Bank of Canada and its subsidiaries are not responsible for the information provided in this podcast, and this information does not necessarily reflect the views of Royal Bank of Canada or any of its subsidiaries. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its subsidiaries.

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One thought on “MYFB — Ep. 2: Do you Manage by Instinct or Analytics?

  1. Thank you for this episode, I really enjoyed the discussion.

    In my view, both instinct AND analytics are required to run a farm business.

    Analytics are not enough because it is impossible to reduce down the strategy of the business and the economic context into a series of numbers. There are just too many qualitative considerations.

    On the other hand, relying purely on gut is not manageable either, because most farm businesses have become too complex, with bigger teams, higher financial leverage and more volatile markets.

    In the end my view is that analytics are the low level necessity that can enable experience farm owners and managers to make informed gut decisions at higher level.

    For those looking to get started with analytics, free free to check out our farm accounting software solution at https://www.farmbooster.com
    (full disclosure, I created FarmBooster).

    Clement

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