In a spin on ‘walk before you can run,’ Kristjan Hebert says that farmers need to focus on the data they already generate before thinking about large-scale data collection.
Hebert, managing partner of Hebert Grain Ventures, says that farmers need to focus on understanding their own numbers such as debt servicing ratio and access and allocation of capital — and how much you could lose — before they worry about layers of data upon data.
“I call it Black Jack farming,” Hebert says. In Black Jack, there’s a cheater card that will tell you the plus or minus odds of each hand. For farming, we could develop our own kind of cheater card with easily accessible data — we have a finite budget, and if you allocate it certain places, we can calculate the likelihood of being profitable at the end of the year, he says. But many farmers aren’t doing this first step in data management and use.
Beyond that, there’s also the oft misunderstood topic of capital, both monetary and not. Employees are an investment, not a cost, if you’re managing them right. “An employee has value and is not an expense,” he says, offering some key tips (below) on how to gauge whether or not your employee is truly adding to the bottom line or taking away from it.
In the long term, Hebert says, there are two major risks to farms that many farmers need to put a plan in place for: interest rate shifts and currency devaluation. “Volatility of both is perhaps the highest it’s ever been,” Hebert says. “In the short term we have to worry about cash, but if interest rates climb four to five per cent or our currency devalues 10% — what would you do? What can you do?” Diversifying out of farming is one option, he says, as is paying close attention to not just total debt but also debt structure.
Hear more from Kristjan Hebert on farm management, recorded at Grainworld, below: