I was listening to a podcast the other day and heard a very interesting thought: farming is having its Moneyball moment. Farming without data is like managing a ball club before Billy Beane came along -- you trust your gut, but (even if you're good) you're inefficient and mistakes are costly.
Much like a running a baseball team, farming is expensive. Stadiums and equipment cost money; and a baseball team has travel expenses -- but the big-ticket item is labor. In 2019, MLB teams spent an estimated 63% of their revenue on labor. This number is pretty close to what some farmers are spending on labor (especially if they're farming apples & pears, or cherries).
Collecting the Data
Even if your labor cost is lower (looking at you, livestock and rowcrops), the Moneyball principle is the same: the only way to effectively manage your farm labor is to have the tools to track and analyze your data. When Billly Beane got to the Oakland A's, he looked at the data and found that stolen bases and RBIs were overvalued -- what really mattered was On Base Plus Slugging. It's all about looking at the right stats.
Farm labor is complex. I've talked to a lot of farmers who could tell me exactly how much they spent on labor last year, but the numbers always got fuzzier when I asked how much they spent specifically on pruning or spraying or harvest. They're looking at the wrong stat! Overall labor cost is a good number to know, but it's not a number that helps you make day-to-day decisions on your farm. To make smart decisions you need much more granular information about where your workforce is deployed, what their output is, etc.
Acting on the Data
Once you're collecting the right data, you can easily do things that you may not have realized were possible.
These are actual use cases from our customers where real-time decisions make a difference:
- Keeping track of employee hours in real time to avoid incurring unnecessary overtime
- Track employees' activity to see if production is too low (are they above minimum wage?)
- Track employees' activity to see if production is too high (are they rushing at the expense of quality?)
- Looking at hourly production later in the day to see if counts have tapered off and crews are standing idle
- Making sure that breaks are being taken in a timely fashion and your farm is compliant with labor laws
- Making sure that quantities delivered to the warehouse match the quantities you produced in the field.
This also puts you in a position to make long-term strategic decisions for your farm. Block-level accounting is important and you should be able to know exactly what you're paying to farm each block.
- Are any blocks disproportionately expensive to farm? Do the returns justify it?
- Are you investing in new tech or equipment and will it impact your labor needs & expense?
- Can you forecast the right number of employees needed for the upcoming harvest season? (This is especially important for H-2A!)
I know a lot of growers who used to try and get this data from their payroll system and spend hours rearranging it in Excel. Watching the "lightbulb moment" when they found they could have this same result in seconds always made me happy.
Tying it all Together
Ideally you can export your data from all of your tools. Whatever you're using, your data should be your data. I'm proud that FieldClock has led the industry in providing API access so our customers can easily use their data in any system they want. I look forward to the day when all ag tech does the same. By doing so, we enable growers to build custom dashboards and alerts to manage your farms in real time.
In 2002 the A's made it to the playoffs while spending 1/3 of what the Yankees did on player salaries. Not only that, but they won the same number of regular season games as the Yankees (103), and actually won 1 more game than the Yankees in the first round of the postseason. The Yankees had the highest payroll in the league, and the A's achieved the same result at a fraction of the cost.
As farm labor gets more expensive and more regulated, the only way for farms to stay competitive is to adopt the same approach: collect your data and act on it. This is moneyball for farmers!
p.s. Props to Patrick at Loftus Labs for articulating the "Moneyball" thought. It's a great way to look at the current inflection point for farming.