March/April Newsletter - A View from our CEO
Technology and Tightening the Belt
I think it was an old Ace Reid Cowpokes cartoon that had a skinny-as-a-rail cowboy leaning on a rickety old fence post and everything around him just looked pretty poor. He leans over to his buddy and said, “reckon I’ve tightened the belt down around here about as much as I can!” The guy is literally about as big around as a pencil, with a worn out belt tail hanging off the end of his buckle. He had no more holes left on the belt to get cinched up any tighter. Nobody knows better how to “buckle-down”; “tighten the belt”, or go “bare bones” better than America’s farmers and ranchers. Those that know their costs are resilient and “find a way”. The words “find a way” mean a lot to me, as it is part of how we live here at AgriVision Equipment/PrairieLand Partners. One of our 4 Guiding Principles that we live by is Courageous Innovation, and the descriptor behind it is “find a way”. We want our team to face adversity, grow, learn, and ultimately find a way to solve problems and create opportunities for our customers, families, and communities.
Last week, I was able to attend the Commodity Classic in Houston TX, engaging with many farmers, ranchers, vendors, grain marketers, and subject matter experts. The show was filled with ideas and products that all require some sort of investment of time and money in order to capitalize on them. It would be easy with corn knocking on the door of $4.00 and wheat in the $5’s, to take the attitude of “I’m not investing in anything.” Note, I didn’t say “buy”……….I used the word “invest”. The encouraging thing to me for 2.5 days, was that the event was filled with open minded farmers and ranchers, looking for opportunities to increase revenue and/or reduce expenses by making an adjustment and doing something different.
So, with lower revenues in the coming years, how do we know what investments pay and which ones don’t? I want to hit on 3 technologies that I see having a greater impact in agriculture.
1. Precision Ag using Data. In the last 6 months, we have seen a significant uptick in sales of data enabling equipment and software. We have invested in a startup technology that tracks cow location in a pasture and would allow a rancher to move them around a large pasture to do rotational grazing without costly fence…..more to come at a future date on this. Switching back to row crops and small grains, if you have not investigated the new John Deere Precision Ag Essentials Kit, you should take a look and see if it fits your operation. For a crazy low entry level investment of less than $2500, you can get a new StarFire 7000 GPS receiver, MTG cellular modem, and high speed G5 touchscreen display to control your equipment, while wirelessly transmitting data to your home base or smart phone via the Operations Center. Data alone is not the answer, but the ability to do analysis to prove out ROI and find areas to focus on, is like gold. I have had the fortune to see the future capabilities that are coming, and this kit along with new capabilities for analysis in the Operations Center will unlock cost savings at a time when we all need it most!
2. AI and Machine Learning…….I don’t know about you, but I get a bit uneasy the more that I learn about these. If used properly, they bring huge efficiency and knowledge opportunities. If used improperly, there is risk, but we again will save that discussion for another day. We are evaluating AI to reduce repetitive and non-value added tasks in our business. One area is around service work. We spend countless man hours getting the information from our technicians, typing it into a work order, checking for proper parts, rechecking it and cleaning up the descriptions of the work that was done. My hunch is that in the near future, AI has the potential to reduce the hourly needs of these repetitive tasks by more than 50%, freeing up our technicians and support staff to spend more time in the field or shop on value added activities for our customers. AI along with connected machines is already giving us the ability to get “Expert Alerts” on machines that are not performing at peak efficiency or are about to have a catastrophic failure. One alert allows us to fix a high houred engine failure for $3500 if caught before part failure, versus $10,000+ if not stopped before the part fails.
3. Replacing raw inputs with technology and machines. This has been happening for 100’s of years, but it will happen at a faster pace every year for the next 20. John Deere has a goal in the next 5 years to enable farmers to reduce Nitrogen needs by 20%, reduce Herbicide and Pesticide needs by 20%, and improve Soil Organic Matter via Carbon capture. I know on our farm that we are willing to consider investments that have a measurable ROI, if we could reduce our Nitrogen, Herbicide, and Pesticide bills by 20%. The key is having the data I referenced in points 1 and 2, to be able to sense and act on variables in real time…….and these capabilities are upon us today. I also believe as we continue to have less available manpower in our rural feedlots, ranches, and farms; that we will continue the 1000 year transition from manpower to machine, but at an increasingly rapid pace. In the near future (less than 5 years) we will have capability to use automated feed trucks, autonomous grain carts, tillage tractors, and more.
To wrap this up, I want to pivot to a more heartfelt topic. Please take time to read the article on “Answering the Long Distance Call”. I love these men for their giving hearts. As we all tighten our belts to manage through the current Ag cycle, let us not forget that we are blessed beyond measure. We all have the ability to give to those that are in need, whether it be locally or around the world. I don’t know about you, but I find giving fun. When the Bible talks about it being more blessed to give than receive, I couldn’t agree more. The process of giving at Christmas or a birthday is energizing to me in a way that few other things are. However, I know that eventually, the item will wear out, the calendar will be used, and the memory of the gift, no matter how special, will eventually begin to fade.
“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” – Mathew 6:19-21 As Jesus laid out, the painful reality is that we do live in a world where there are moths and rust and thieves, and even the things we hold most dear are temporary at best. When I sit with that sobering thought and begin, as Psalm 90:12 describes, “numbering my days,” I feel a deep longing for more. Thankfully, Jesus didn’t stop there. Not only can we have more, but we can have more that will impact eternity. Let’s not forget in these times to give to our communities, schools, churches, and those less fortunate on our back door step or around the world, when there are needs.