The main goal of every farmer, whether he has a small family farm or big cooperation, is to have a productive farm. Aiming to be productive, farmers are faced with many factors limiting farm’s productivity, such as available land, agricultural commodities, weather conditions, crops, market access, farmer’s knowledge, lack of new technologies and other. Farm productivity is important for many reasons; from providing more food, better competitiveness on the agricultural market to personal benefits to the farmers, such as income, health and wellbeing, as well as being able to increase the outputs of labor.
According to an economic definition, farm or agricultural productivity is the ratio of agricultural outputs to agricultural inputs. In other words, the higher agricultural outputs, the farm will be more productive.
Land is a key farmer’s resource that defines the maximum productivity for a crop and variety being grown. Therefore, one of key productivity indicators is yield productivity that shows us how a specific crop variety performs on one hectare/acre of land. Understanding which crop variety performs the best is crucial for future crop variety selection and optimizing your production.
In a fruit production, besides understanding yield performance per area, it is also important to understand yield per plant for each variety.
Good agricultural practice recommends creating a season plan that defines expected yield quantity and forecast of a selling price to understand possible income per crop and variety. If a season plan is created, you are able to benchmark yourself continuously – whether you are under performing or over performing the plan.
When you are good and comfortable with understanding your yield productivity per crop and variety, you can now go even further – to the field level.
Yield distribution per fields for each crop and variety allows you to easily identify which fields are more productive and which fields do not perform. Comparing all activities, inputs and parameters of productive fields versus non-productive fields lets you understand the real drivers of yield productivity for your crops and varieties. Sounds simple, right?
Cost Efficiency per Field
After understanding the yield productivity that is responsible for measuring the health of the “revenue” side of your farm, now is the turn to understand how efficient you are on the cost side. The same as with productivity, you can perform a cost analysis for all crops, varieties and fields.
What are prerequisites for having a good cost analysis:
If you have all above set up, when you are registering daily activities on your fields, our farming analytics will automatically pull all required information on costs and prepare you a detailed insight of the cost efficiency per crop, variety and field.
Our field analysis allows you to drill down into the details and analyze cost structure for every field – what is the cost of work, machinery, inputs (pesticides, fertilizers, water), etc.
Understanding the cost efficiency will help you understand if there are opportunities for cost cutting. Also, this will help you prepare the budget for the next season more easily.
Return on Investment (ROI)
Understanding the yield productivity and cost efficiency of crop productions are key for understanding the ultimate farming KPI (key performance indicator) – the return on investment per crop.
By combining the financial input (total expenses) vs. financial output (total sales) of a crop production, you can understand the exact balance of the crop production – have you earned more than you have invested in it or you are still in expecting to reach the break-even point.
Understanding the ROI of a crop production will help you understand which crops are profitable for you to grow. Having profitable crop production is the key to have a sustainable and viable farming business. Running your farm without knowing all aspects of your farm’s productivity is like driving a car blindfolded.
With Agrivi farm management software, all details of a farm productivity are available with a single click with our dashboards and reports. Interested? Start your 30-day free trial now!