Better Farm Management Recommendations through Public and Private Partnerships
Farm managers have one of the most rewarding and challenging jobs around. Each day they make decisions to help ensure their farming operations run smoothly while considering how those decisions affect their long-term goals. Many farm managers say that they started farming because it is a way of life that they love. By choosing a career as a farmer, they have jointly agreed to be agricultural stewards, their farm’s chief financial officer, chief executive officer, and accountant, in addition to a nutritionist, crop scout, and manure specialist (dependent upon their farm type). Each role is equally important, and one of the most interesting challenges for the principal operator is to determine where they should allocate their management skills and time.
Determining a way to improve the efficiency of farm management decisions is Dr. Joleen Hadrich’s main objective as an Extension Economist and Associate Professor in the Department of Applied Economics. Dr. Hadrich is developing new methods to combine public and private farm level data to help farmers make efficient and successful farm management decisions. In particular, she is collaborating with the Minnesota State Colleges and Universities Farm Business Management Education program (FBM), the Southwest Minnesota Farm Business Management Association (SWFBMA) and the Center for Farm Financial Management (CFFM) to study the characteristics of financially successful farms and how those skills can be translated to improved efficiency and profitability. The strong collaborative relationships among these groups, Extension, and agribusinesses made the move to Minnesota particularly attractive to Joleen.
Hadrich is working with Rob Holcomb, AgBusiness Management Regional Extension Educator, to study results of a “Top Farmer” survey distributed in Spring 2017 to participating FBM and SWFBMA farmers. Dr. Hadrich combined the survey responses with the farm characteristics provided in the FINBIN database managed by CFFM to identify how farm level variables affect the success of farms over time. FINBIN is the largest nationally representative farm financial database, which collects and manages the FBM association’s farm-level data for Minnesota and 10 additional states. By focusing on management decisions associated with risk, Hadrich and Holcomb have informative responses on marketing strategies, employee management, input negotiation strategies, technology adoption, and the effect of management meetings and goals on farm success from 2014-2017. The results of this survey work will be distributed in 12 monthly newsletters starting September 2018. Breaking this out on a monthly basis gives farmers one thing to focus on rather than all 12 at once. It also creates the opportunity to build increased relationships with their FBM instructors to determine how their farm matches up to the benchmarks created with this work when farmers meet with their FBM instructors.
The key to the success of this research is the relationship between the University of Minnesota and the FBM programs in Minnesota. The FBM instructor provides an outside perspective of the farm operation and can help the farmer work through how alternative strategies will affect the financial success of their farming operation. The success of the “Top Farmer” survey demonstrates the value of this opportunity, which can be further expanded to production data collected through precision agriculture, dairy herd improvement association records, soil tests, and environmental considerations, among other factors. This will provide Dr. Hadrich with a rich dataset to study how farm decisions have affected profitability over time with the ability to merge additional production data with their farm financials. Providing a comprehensive management analysis gives farmers the ability to see how input decisions, management, and other factors affect farm output and profitability to add to overall farm success.
Hadrich hopes that the methodologies developed through the collaborations across Minnesota will become the national standard for innovative farm management research. Farm management connects financial and production decisions, and research rarely accounts for this connection outside of projection models. Using real historical data that includes the interconnectedness is the first step to providing comprehensive farm management decision support to improve the financial success of farms in an ever-evolving environment.