Benefits of good record keeping

Good farm record keeping is crucial to your operation’s success. Knowing your numbers and being able to run different management and decision-making scenarios can not only help you make decisions today about your profitability, but also set you up for future opportunities as the commodity world evolves to meet growing consumer demand for more sustainable goods.  

Ryan Stockwell is a Wisconsin farmer and Sr. Manager, Partner & Grower Advocacy on Indigo Ag’s Carbon team. He says that without good farm record keeping, you’ll struggle to answer basic questions. “How do you know when you're making money?” Stockwell asks about poor record keeping. He says besides sacrificing your bottom line, other pitfalls of poor record keeping include misinformation and missed opportunities.

Stockwell says that good record keeping has a few key components:

1. Accuracy
2. Completeness
3. Granularity

Complete records give business owners the critical information needed to make comparisons and draw conclusions. Stockwell says that good record-keeping helped him compare land management styles and determine which choice was better for profitability. “I had some land that had been managed no-till and covers for 12 years. Last year I bought some more land that was managed conventionally. I fertilized them at the same rates. And yet, because of accurate record keeping, I'm seeing a yield advantage in the long term no-till covers. But that's because I've been keeping accurate records at the field level,” he explains. “Good record keeping tells you a story that you can then use to determine what are the big decisions that I should be making?” Stockwell adds.

Stockwell knows that not every grower is comfortable with electronic record keeping and many still favor pen and paper. But Stockwell urges growers to go digital. “It's like the metaphor of when was the best time to plant a tree? Well, 50 years ago. When's the second best time? Today. So just get started. It doesn't have to be terribly complicated,” he said. He adds that a basic Excel spreadsheet will suffice, but knows even that is intimidating for some operators. “That's one of the reasons why a lot of growers have just put it off and they've kept to pen and paper, because they're really uncomfortable using software programs, such as Excel. They didn't grow up with it.” he explained.

Involving a new generation in the operation can be challenging, but modernizing your record-keeping might be just the niche that works for everyone involved. “This is an opportunity. If you're not well situated with your own data and you have the next generation wanting to come in, get them started here. This is a great opportunity for them to contribute meaningfully to the farm and set them up for future opportunities,” Stockwell said. While change can be hard, each farming generation goes through a revolution.“ I had an old farmer from Montana tell me that, for his dad, the big jump was tractor technology. For him, it was seed genetics. And for his son and daughter, it is data and information,” said Stockwell.

All businesses can benefit from good record-keeping and the farming business is no different. Knowing your numbers helps you make key decisions and understand your operation at a glance.  “I know how much I have invested into a crop, cost per bushel, cost per bale. I know how making slight tweaks in fertility or in management can impact my bottom line.” said Stockwell. And while changing to an electronic system from the pen-and-paper method may seem overwhelming, Stockwell warns that the lost opportunities from not doing it are greater. “The reality is that this business of farming isn't going to get easier or less digital. It's going to get more competitive. It's going to get more difficult and digital. So that's where you might as well get prepared for that pressure and opportunities that are coming along, because the next forefront in agriculture is information,” he says. Good information and complete record-keeping can also open new revenue streams. Carbon by Indigo pays growers for sequestering carbon and uses your farm records to verify your practice changes and maximize your payments.

Carbon by Indigo is free to join and also features a suite of tools like the Practice Change Profitability Tool. It helps you understand how incorporating different practices on your operation can help your bottom line.