New Software To Aid With Ag Business Decisions

Source: Saskatchewan Agriculture and Food

An innovative project under development at the Prairie Agricultural Machinery Institute (PAMI) in Humboldt has the potential to greatly help producers, entrepreneurs and even public policy-makers make critical agricultural business decisions.

The project is in the form of a multi-faceted computer program that takes account of a wide variety of factors and inputs to generate a comprehensive spreadsheet which calculates the economics of different farming techniques, product usages, business opportunities, etc.

Les Hill, PAMI’s Business Development and Technical Services Manager, has worked closely on the initiative since its inception. He says the project is called the “Comparison of Whole Crop Harvesting Options,” because the concept behind it is to enable farmers to make the best possible use of all products and by-products generated in the crop production process.

Producers will be able to see how a different farming practice, an alternate usage of a commodity, or a simple change in a single input might affect the bottom line of their whole operation.

“We’ve tried to put all possible variables into the program that can give farmers as complete a picture as possible when they weigh the options available to them or look at the value of their products,” said Hill. For example, under what conditions might it be preferable for a producer to bale the straw and chaff left over after harvest for sale to a cattle operation or other commercial venture, and when might it be better to retain the crop residue to enhance the soil?

The software can also show producers how different farming techniques and practices might alter their profit equation. “Every piece of equipment can be operated differently. If you’re a conservative operator, you might reduce your machinery upkeep and repair costs, but you’ll probably spend more time in the field,” Hill said. “There are tradeoffs for all of these kinds of decisions, and this program has the ability to maybe help producers find ways to do things better or cheaper.”

But he was quick to point out that the tool will have benefits beyond just the farm gate. Entrepreneurs with agricultural business ideas could use it to calculate the viability of their plans and determine how changing factors might affect their profit margins. They would then be able to work with the numbers, adjusting different variables to see what it might take to make the venture successful.

Hill said that tests conducted on the program so far have gone quite well. “We’ve been experimenting with different inputs, and it’s all working very nicely,” he noted.

Hill estimated the project would be completed by March of 2007. The PAMI team is continuing to add new data from many sources to ensure the program is as thorough as possible. They are also working to make the software as simple and user-friendly as it can be, which is a big focus of their current efforts.

Given its many potential applications and benefits, Hill said PAMI was very encouraged to receive some funding for the project from the provincial government’s Agricultural Development Fund, aimed at supporting innovative research and development initiatives.

“The program can help in developing best practices for utilizing agricultural products and in making strategic business decisions,” he stated. “If it can take an agricultural business venture or a farming operation over the line from losing money to profitability, I think it will be a very worthwhile tool.”

For further information, contact:
Les Hill, Business Development and Technical Services Manager
Prairie Agriculture Machinery Institute
Phone: 1-800-567-7264, ext. 226