Data You Can Take To The Bank

The Justin Krell family. ( Justin Krell )

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Data guides many of Justin Krell’s farming decisions—from agronomic practices to machinery purchases. As a young farmer, Krell, 30, even used data to convince his banker four years ago that strip tillage would be a viable cropping system in southeast Minnesota, where conventional tillage rules.

“For a young kid to come in and ask for a big operating note and say, ‘By the way, I’m not going to farm like everyone else here,’ I’m sure that made him a little anxious,” recalls Krell, who farms north of Blooming Prairie, Minn. “But we were able to prove through the data that it works.”

Working with farmers to put their data into financial language they can use with lenders is a regular practice for Ashley Boehnke, a precision agronomy lead for Central Farm Service (CFS) and its precision ag platform Central Advantage.

“It's an opportunity for banks to look at the farmer’s information a little closer,” she says. “It might give the lender a little more confidence, a little more faith in why the farmer across the desk from them is asking for the things he's asking for.”

At the same time, lenders need to share available data with farmer customers, says Anthony Hotchkiss, director of agricultural banking, Regions Bank, Clayton, Mo. Hotchkiss, who addressed the topic during the American Bankers Association Agriculture Bankers Conference last fall, says data gives farmers insights into the kinds of decisions their peers are making and how they stack up by comparison. As banks increasingly move to loans based on spreadsheet numbers, insights data provide are more important than ever for both the lender and the farmer, he adds.

Krell, who is one of Central Advantage’s customers, often uses data to justify a potential purchase—like the time he wanted to use $12,000 to buy a pneumatic trash cleaner system for his 16-row planter. Through data, Krell found that for every 1% of residue that was getting in his seed trench he was losing an average of 2 bushels of corn per acre.

“The data made buying it a very easy decision to make,” he says. “The following year it made a dramatic difference in the amount of residue that was getting in my trench, and I was able to pay for the system in about a year and a half.”

Along with purchases, Krell uses data to help decide where to invest the dollars available in his operating loan.

“At the end of each year, we go through the data and analyze our populations, hybrids by soil type and every application of N, P and K by field and try to identify the factors that contributed the most to our yield and profitability,” he says.

In recent years, the annual review has helped Krell reduce his overall nitrogen use. On the flip side, from 2019 data Krell realized he needed to invest more dollars in lime applications for some fields.

In that scenario data can help prove the input is needed, says Jade Kampsen, a precision agronomy lead for Central Advantage. “If a lender feels the grower could cut costs from his program it helps the grower to show, that no, those products are returning good ROI, and if I cut them I will actually be in a worse place,” she explains.

Krell agrees: “The data and guidance from CFS help me be more confident in my decisions. Balance sheets are really tight, and knowing your data gives you a different way of looking at the financials, the numbers, which is more important now than ever.”

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