A Perspective on Value of Analytics in Agriculture

The AGx Conference was a sponsored ApRecs event held in conjunction with the Washington State Horticultural Association Annual Meeting. Below is a transcription of Dr. Clark Seavert, Professor at OSU bringing the perspective to the discussion regarding return on investment and value of analytics in agriculture.

Dr. Seavert is a professor in the Department of Applied Economics at Oregon State University. He attended the College of Southern Idaho, Oregon State University at Eastern Oregon University, and the University of Idaho. Clark began his career at Oregon State University in January 1989 as an Area Extension Farm Management Agent in the Mid-Columbia region of Oregon. In 2010, he accepted the directorship of the Northwest Agribusiness Executive Seminar and change of appointment to his current responsibilities for research, teaching, and extension.

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Note: This is a transcription of a presentation. It has not gone through a professional editing process and may contain grammatical errors or incorrect formatting.

Britt Dudek:   What is the greatest opportunity for data because that’s a big, huge question, but it’s the world that we live in. Anybody on the panel have any perspective on that as far as what is our greatest opportunity?

Drew Zabrocki:   I was talking with Clark just before this session about the information that’s on the farm and what people can do with the information, being able to analyze it in your farm and make better decisions. I think there are a lot of really creative things happening in agriculture today.

Clark Seavert:  Yes, I would agree. If you take a look at where we’re at today with information, as opposed to where we could be and should be in about five years, it’s going to be a tremendous fundamental shift. And why? I work with growers on a one to one basis and industry leaders on a different level and so, I’m helping growers make decisions as to technology and other aspects of whether it’s successful planning or whatever it is. The more information you have, the better that that decision can be. In particular, where I help out in the tree fruit industry a lot if pack out information, size, grade – not necessarily yield, but it’s with that kind of information that you can then start doing partial analysis or partial format and analysis to take a look at profitability and having that information and site specific as you can, I think that’s where you win.

I just did a survey of people that downloaded a software program I have, and I wanted to know what accountings systems they use and how they use it. The majority of them don’t use any. They don’t use accounting systems, and when they do, it’s Quickbooks and it’s P&L, profit and loss statements and that’s it. If they wanted to do anything with the analysis of their blocks, they’d use Excel. Excel ain’t going to work in the future and so it’s how do you take information from the field on your desk and in your iPad or iPhone and how do you then make decisions, and I think that’s going to be quite exciting in the next five years.

Drew Zabrocki:  Yes, we talked a lot about process and efficiency and using the information to make good decisions. As a fruit arrives at the processor and what markets its compatible for and regulation requirements and sales opportunities, but what I was excited about with Ag-tools, the software you mentioned, is the ability to take all that information next year and then go back and look at it. So it’s that analysis we heard about during the Lean session which is, okay, now we have all of this information about not just good horticultural practices and what we’ve been able to achieve in terms of results, but then now let’s run scenarios with it. You were talking about scenario opportunities as well which I thought was pretty interesting.

Clark Seavert:  Right and so I can take these scenario opportunities. Once you have your baseline information, then you can go out and start projecting in 5, 10, 15 years about different aspects of your production system. I do a lot of this pack out stuff and if I you have the technology that can increase fruit size by 10%, what does that mean? Even Excel spreadsheets are going to be difficult to get you to that point. But if you can shift grade by 10%, what does that mean? And then you start looking at these different inputs and outputs and I can show you time and time again anywhere from a hundred — just today, I just gave a couple of talks and showing them those kind of differences. Anywhere from 150 to $7500 an acre, depending on variety, depending on pack out and depending on yield.

Drew Zabrocki:  That’s pretty significant.

Clark Seavert:  It is significant, and that’s where the money is going to be made. You’re in a very high input/output industry than any other agricultural sector, and then throw on that you market your product by size and grade. It’s not bushels of wheat; it’s not bushels of corn – it is size and grade. Certain sizes have premiums; certain grades have premiums. Your objective is how do you get the best — what we call target fruit, that fruit that’s returned to you over and above fix and variable cost, how do you get that fruit to be all target fruit?  You don’t do it without some kind of database to start from.

Britt Dudek:  Most definitely. Another question that the we’ve kind of jotted down here, how can data be used across generations? Because now that we’re on the farm, you talk about all these different demographics from baby boomers to Gen Y – how do we talk that common language?

Drew Zabrocki:  That’s a good question. I think having common language is a good place to start. I was able to visit with a lot of students over the last summer and, in fact, we hired some really bright students to come work at our company and they’ve got this great technology at school and then they’re coming to work and they’re looking at how do I incorporate that into my business, into your business, into my career now? How do I make a meaningful contribution? And so I think maybe having a common language is a good place to start – similar technology.

Clark Seavert:  I’m just thinking about the baby boomers – my generation and we’re not used to it. Maybe it’s the X and Y sitting down with the baby boomer who still has the cheque book by the way in running their business and then trying to glean as much as I can from that individual and then how do they take information from both directions and then how do you manipulate it to build your algorithms to make good decisions.

AGx was not a one-time event. Find out more about the continued series at http://aprecs.com/agx