Incorporate Predictive Software into Day-to-Day Farming Operations

Here is why you should incorporate predicting software into your dairy or farming business.

Proxima Studio Adobe Stock 368293717
Proxima Studio AdobeStock_368293717

Predictive analytics make for actionable insights, and more and more businesses are using predictive software to simplify day-to-day operations. Such predictive software in the food and dairy industry foresees future outcomes by extracting information from data sets to determine patterns and trends.

Many available software options collect and analyze data as described and make suggestions or recommendations to the user. The number of data points gathered on an average farm is estimated to grow from 190,000 today to 4.1 million in 2050.

Here is why you should incorporate predicting software into your dairy or farming business and what measurements to make better decisions. 

Dairy metrics and measures

New technology improves operational decisions and efficiency throughout any work process. Scale-up production drives productivity, and improvements are achieved by estimating the outcome of every decision you make in your production right from the start. But, to determine the quality of each process and identify points of improvement, metrics are needed, also to measure the quality of work and the aspects that need improvement on your farm. 

The desired outcome in the farming and the dairy industries is to maximize livestock output as well as enhance every product produced. 

Measures of competitiveness of a dairy farm business can be:

1. Rate of production. Pounds of milk sold per worker, evaluating the productivity of workers and cattle. It combines efficient labor utilization with good to excellent herd production. 

2. Cost control. Indicating the percentage of the gross farm, meaning the income used to pay operating expenses. 

3. Capital efficiency. Measuring the total dairy investment as the total current market value of all dairy assets and the efficiency by which all farm assets generate revenue. The higher the Asset Turnover Ratio (ATR), the more efficiently assets generate revenue.

4. Profitability. The rate of return on farm assets (ROA) determines what the assets invested in your operation earned. The higher the rate, the more profitable the farming operation.

5. Liquidity. Using the current ratio and working capital, liquidity measures the farm business’ ability to pay obligations due in the coming year from the cash on hand and assets that can easily turn into cash. 

6. Repayment schedule. Scheduled annual debt payments as a percentage of gross farm receipts measures competitiveness.

7. Solvency. The ability of a business, at a point in time, to meet all debt obligations following the sale of all assets. Or the total level of debt per cow indicating how a manager would repay the debt.

8. Mission. A short and concise action plan based on daily operations, explaining why you are in business and what you want to accomplish.

9. Maintain a family’s standard of living. Estimating the desired standard of living each year and then developing a plan ensuring that farm revenue increases at a rate to meet these goals.

10. Motivated labor force. Examining the five functions of management—planning, organizing, staffing, directing, controlling and developing a human resource plan consistent with the farm’s mission and goals. This plan will serve as a guide as employees are hired, managed and trained.

In relevance to the food industry, metrics can change and improve the entire supply chain management. But, how to measure the overall success of your agrotech business?

Technological examples in agrotech

Better connected systems means navigating seamless operations. From satellites and mobile applications to chatbots and variable rate tools to drone imagery, today’s farmers turn data managers. 

For instance, advanced software can collect data directly from products and predict the growth of calves. The technology generates dynamic graphics that indicate animal weight gain regularly and the diet’s total cost based on data. Beyond nutrition data lies the possibility of analyzing various milk replacer formulations, determining how to best supplement calves and estimating the necessary resources to raise a calf seen from a lifetime perspective.

With an Internet of Things (IoT) setting in a barn, a different dairy barn operating system can, for instance, monitor the barn environment. With measurements such as temperature, humidity, lighting and ventilation, farmers can ensure the best living conditions for the herds in the long run and optimize in real-time.

The dairy industry can also deploy highly specific metrics, including milk solids and KPIs based on the number of cattle or the size of the productive land area. There is also herd size, stocking rate, herd replacement rate, milk yield, feed amount or cost per animal and labor requirements to track and evaluate performance. Then, assessing the areas of grass, fodder, and cash crops to collect insights into land use and feeding strategies help to draw an objective conclusion on the efficiency of an entire agricultural business.

Agrotech: A digital transformation

How tech innovations can best be integrated is highly noticeable in the agricultural sector, and more specifically, the United States. Across the United States, we are talking about 59,000 farms in total. Family farms account for 99% of all U.S. farms and 89% of production. As a family-run business implementing technology in operational drifts, these advances show that new management and technology integration solutions on a farm can change lives, the production wheel and the environment long-term.

Data shows that large farms in the United States with over $1 million in revenue account for 50% of all U.S. farm production (up from 30% in the 1990s). The technological benefits and profits are greater for farms of a certain size because they can spread their investments over more acres. They simply own more land and livestock, making scaling easier.

But, technological improvements are not only dependent on acres. A study showed imagery data from a drone or satellite having the strongest relationship to education, with 38% of users with a high school diploma collecting imagery data, compared to 59% of post-graduates.

The consolidation of farms and the role itself is what drives farming and dairy production further. The transformative role of the farmer from someone consistently in a barn to now being behind a mobile device impacts the entire industry. Investing in workforce education isn’t something for white collars anymore; farmers are being educated in data, management and supply chain. In the bigger picture, small traditional holdings transition into larger businesses in which agronomists transform into the role of managers or even data analysts. 

Operational technology long-term

From both the external and internal standpoint, farming is an on-the-go sector, meaning the use of mobile technology and tablets is paramount to their success and reach. Investing in and monitoring mobile applications allows you to witness virtual reality in practice. And, by automated processes, you get to step away from the physical work and focus on long-term goals. 

As seen, technology to increase production is not only dependent on acres but the farmer himself. The key being education in knowing how to collect and handle the data creating a generational shift in the farming industry. Digital agriculture or agrotech is a term that is here to stay, and farmers who take on an innovative operational management role will be the ones driving their results and the industry further.