Technology Does Not Replace Fundamental Understanding

Tim Hammerich

News Reporter

All the technology and tools in the world won’t help a farmer be more successful unless that have a good handle on the basics. And that includes one of the least favorite activities on many farms: accounting. Long time farm business management consultant Dick Wittman says this is an area of need he sees often in farmer clients.

Wittman… “I've worked with the Farm Financial Standards Council now for almost 30 years. And in 2000, they embarked on a project to try to develop better standards for agricultural cost of production and benchmarking. And we just need to get better at this. Most farmers that even think they're doing it right are nowhere close. Programs like Granular and others that are allowing us to track on an activity basis what we're actually doing, I think, are going to go a long ways to revealing things that we don't understand well. We're able to track field by field enterprise by enterprise and look at margin contribution to fix costs and way we have not been able to do for a long time, but we still have to be able to drill down deeper and better understand our overhead cost structures. Direct input costs are not a problem. It's our overhead. That is the killer of many businesses. By getting a close handle on this it starts affirming those strategies that are making you successful and pointing to things you need to change if you're not.”

Wittman believes the technology can help, but the fundamentals must first be understood.