Sarah Windhorst is the VP of Data Services at Premier Crop. With over a decade of experience in ag data, Sarah digs in to some of the main areas to focus on with data on your operation. We cover the importance of yield efficiency, group data, and benchmarking to track improvement.
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RENEE HANSEN: Hi, Sarah, and welcome to the Premier Podcast. Thanks for joining us today. I know that you’ve been with Premier Crop for close to, or a little over, 12 years. So I know you have a ton of experience and knowledge, and I really wanted to get you on here to share some of your information that you have worked through over all these years and most recently with what Premier Crop has been coming out with: yield efficiency scores. And I just wanted to have you first introduce yourself, and then we’ll just get more into the topic.
SARAH WINDHORST: Yeah. Hey, Renee. Thank you. It’s great to be here and visit with you. Yeah, so, like you said, I’ve been with Premier Crop for quite a while. Most of my career, really. I’ve kind of done quite a few things for the company. I started working in our advisor support team, which is, in my opinion, a great place to start. Really get to understand everything that we do in the background, how we manage data, how we put data into our system, all the nuances of the work that goes into really making Premier Crop be an amazing database. And I have also spent a lot of time working with some of our external partners, spent some time managing some of our retail accounts and working with them closely. Then, I’ve also done quite a bit helping us understand how we can do trials on farm and help our retail partners, help our growers do more on-farm research on their own. So I spent a lot of years doing that and now, in the last few years, managing our data services team, which is kind of back to my roots, working with the team that is directly handling the data and putting data into our system. So, with that, I’ve got at least a decent understanding of everything that we do and how our system works and just the ins and outs of it. So I’m excited to talk to you today about yield efficiency and just where we’re going with that.
RENEE HANSEN: Yeah, great history you have with Premier Crop, Sarah. So thanks again for joining us. Let’s just get into our topic, about: what is yield efficiency? And why has Premier Crop decided to focus on yield efficiency?
SARAH WINDHORST: Yeah, I’ll start by answering that with a little bit of background just about who Premier Crop is. And for those of you that maybe are tuning in here for the first time, I just wanted to talk about what we really strive to be as a company. And ultimately, we are an agronomy company. We’ve been supporting advisors and growers for 20-plus years, and we really understand yield is a key measurement that growers are really focused on. We’ve really worked a lot over the years with our customer base to understand just how different parts of your field are impacted by changes in rates, products, application, timing and different methods. We’ve really focused on building new agronomy knowledge. We’re trying to give growers easy ways to test ideas and check what works and see what they think is going to increase yield on their own fields and put methods in their hands that they can really do some of that on-farm testing themselves. And that’s been really popular with growers. We know growers are always trying to find what’s going to move the needle. How can we push the limits of what they’re trying to achieve in their fields, just to get to a place that they haven’t been before? Our advisors are absolutely at the heart of that, and yield efficiency is just a new metric to try to understand how we can measure what’s working and what’s not working. We’re also really aware that sometimes high yields come at a really high cost. So it’s easy for growers to chase high yields and try to win that high-yield contest. But ultimately, when it comes at a high cost, the question is: is that really sustainable? Is that really worth it? I think growers know there are areas within every field that you farm that will never, or at least inconsistently, be the top performing part of the field. No matter how many specialty products you use or how much fertilizer you put on, you can’t overcome the effects of a sand hill or a drainage problem, for example.
If those parts of your fields are treated the same, oftentimes you’re throwing away input dollars. On the flip side, there are phenomenal parts of your field that can be pushed even harder than you think. And if we want to really help growers learn and improve their operations, we understand we’ve got to answer the questions: what’s the return? Does it really pay? Rather than just helping them strive after high yields alone. So it really means that the conversation isn’t just about agronomy, and it isn’t just about economics. We’ve got to tie those two together in a really tangible way for growers. So yield efficiency is a metric that we’ve created to help growers understand if they are profitable at each field level based on their inputs and their yield and then a benchmark selling price that you can input and change on the fly. While you can see yield efficiency scores at a whole farm operation level, you can also see it field by field. So it helps farmers know which fields are making them the most money and, ultimately, whether the management practices they’re using are as profitable as they can be. We’re trying to help growers understand what’s driving yield agronomically. We know high yields don’t always translate to high profits. So, adding yield efficiency as this kind of new measuring stick, advisors and growers can see not just through the agronomic lens but the economic lens, as well. So it kind of also gives you an easy way to benchmark against your peers in an anonymous but really powerful way. So you’ve got this field view. You’ve got a grower-level view, and then you’ve got the ability to look at your operation against others that are part of the Premier Crop network, if you will. That was a long answer.
RENEE HANSEN: No, that was excellent, and that’s great. But I do have a question because we talk about high yields and how sometimes, a lot of the time, that has been a metric for growers: how to measure their yield, that they’re improving year over year. And you said it can sometimes be at a high cost. However, with the markets where they are right now, I mean, it seems like it’s comfortable to continue to chase after yields. Why would a grower need to dive down, or how would they view that yield efficiency to let them know at what cost this is to their benefit or not to their benefit?
SARAH WINDHORST: Sure. Yeah, and we’ve seen that in years past, right? When grain prices soar, it seems a lot easier to say: ‘Okay, now is the time. I can go chase those inputs.’ But at the same time as we’re watching grain prices soar, we’re also seeing input costs go really high too. So, I mean, at the end of the day, as markets change and as prices change, no matter where you are year to year, you can’t really know how profitable you are, unless you’re doing a great job of recording every input cost, as it varies across your field too, and then comparing that back against your yield. It just becomes more and more important as there are more dollars at stake, I think. And we can talk a little bit more later about some specific examples too, Renee, where we can understand: what is the impact? I’ve got some of that prepared for you too today.
RENEE HANSEN: Well, great. Yeah, because I was going to ask: what are the metrics that a grower needs to see the yield efficiency score? What do they need to record, so they can check if they are actually profiting in that part of the field?
SARAH WINDHORST: Yeah, it’s really simple. We want yield efficiency to be simple. While it’s a new concept, it’s really not. All you’re doing is adding up input costs, and you subtract your input costs from the yield. And you multiply that by your sale price for the bushels that you’re able to sell on that yield. The only thing that we’re leaving out of that equation is land costs and management costs. And the reason we’re doing that is, really, just leaving some room for a grower to have some privacy from their advisor and, at the same time, still supply enough information to gain insights into their own operation. It becomes a number that is really easy to understand. If you’ve got a yield efficiency score of $500, you know right away, as a grower: ‘Okay, well, what am I paying for land?’ And that might be different if it’s owned or if it’s rented, but right away, in your head, you can subtract out what you’re spending on land. And whatever’s left, that’s your return. That’s how much you have left to pay yourself, and that can be considered your profit, then.
RENEE HANSEN: Yeah, so you keep talking about these scores, and what do they look like? How does a grower physically see these measurements?
SARAH WINDHORST: On our website, we’ve got a dashboard that has a ton of great visuals to show you, really, what your yield efficiency score is. It shows you what the range of the score is. As you walk into looking at your yield efficiency dashboard on our website, you would choose all the way down to a field level. And at the field level, you can see what the yield efficiency is for that one field, but it’s kind of showing you on this gauge. And on that same gauge, you can see what your lowest yield efficiency was for other fields that you farm and then, also, what your highest field efficiency was. And it kind of shows you, depending on what field you’re ‘on,’ you can see, then, where that land in the range of yield efficiency is that you have on your own operation. And there, again, if you’re looking at it from the grower level, it would show you that against a group. When you’re part of Premier Crop, you have the ability to benchmark against other growers in your region. We create regional groups that can be really hyper-local, where they’re just your neighborhood even, or they can be much broader geographies. It kind of depends on what you’re trying to understand. But, then, if you’re benchmarking, at that level, you would see your grower average yield efficiency for all of your fields as it compares to other operations that are also in our network. But yeah, a lot of visuals try to make it really easy to understand. It’s all web-based, so you can view it anywhere on your mobile device or however you want to access the web.
RENEE HANSEN: Right, and so it’s not like you’re looking at a spreadsheet and trying to find the numbers. You can visually see this pretty easily. So how would you say that’s different from other competitors in the marketplace?
SARAH WINDHORST: Yeah, I don’t know that anybody has this level of detail that we do, Renee. I think there are a lot of people that are really focused on agronomics and a lot that are really focused on economics. You could even say that there are some that are tying together agronomics and economics, really, at a broader whole-operation perspective. But what we’re trying to do here is, really, just taking it down to the field and even the sub-field level. So another thing that you can get — we’re talking about yield efficiency, but another thing that you can see when you’ve got all of this information in Premier Crop — you can also get a cost-per-bushel map. And you can see visually, even at a sub-field level, what it costs you throughout a field as you have increases or decreases in yield and as you have increases or decreases in your input costs. So those roll up at a field level for a yield efficiency score. We even go to that sub-field level to help you understand if your variable-rate applications are even paying.
RENEE HANSEN: Yeah, and you had mentioned not a lot of, or if any, other competitors have something like this because we’re entering in all the cost data for the products. But you’re also uploading all of these data layers that have been applied — your true actual yield — and it’s merging it all together to create this score.
SARAH WINDHORST: That’s right. Thanks for calling that out because that’s a really important key. We’re not just inputting what was your whole farm average for X, Y and Z. We’re doing a lot of work. We’re doing a lot of work. The advisors are doing a lot of work to collect data from growers, making it easy for growers. But yeah, we’re starting from building a plan for a field that includes a variable-rate prescription for fertilizer, a variable-rate prescription for seed if, in fact, the grower is doing that. That certainly isn’t a limiting factor for us, but we’ve got variable-rate prescriptions that are going out to the field. We’ve got as-applied data that’s coming back from the field, and all of that can be layers that are impacting your yield efficiency score. So you could say we’ve got the real cost, right? It’s not just an average. We’ve got the real cost, including what was actually applied.
RENEE HANSEN: Yeah, there are no guesstimates here. This is the true story. Yeah, so you said you had an example to share. So go ahead and share with us the example that you have prepared.
SARAH WINDHORST: Sure. Okay, so I wanted to try and walk through numbers. I know sometimes it’s hard to walk through numbers when we’re just listening to audio. But hopefully, you can, as you’re listening, pause and rewind and try to really understand what I’m taking you through here. Okay, so yield efficiency, we’re saying, is made up of four segments of input costs: seed, chem, fert and operations. So, if we take a specific example, I’ve got a grower who, last year, had an owned field versus a rented field that we were trying to understand how they compared to one another. And this grower was trying to decide if they should be renting more ground or not: ‘Is my rented land being profitable? And should we go after more acres?’ So, in this example, this owned piece of land, their seed costs were at $98. Their chem costs were $45. The fertilizer was $113, and operations were $119. That particular field didn’t have amazing yields last year: 198 bushels on average. If we used last year, just at the end of the year, as we were seeing some increase in the market, their grain sale price was $3.98 a bushel. So, when we used those numbers, the yield efficiency for that field was $414. That’s the number that’s not including land and management. So, right away, as a grower, as you’re training your brain to what yield efficiency is, you say: ‘Okay, so that $414, I’ve got to hold back whatever I’m considering my land costs.’ Now, like I say, this is an owned piece of ground. So this is where it can be tricky, and why we don’t include land as part of a metric, because some growers might want to change how much they’re attributing on their own ground. So, in this case, for them to pay taxes and a small land payment, we’re calling it $120 per acre as their land costs. So there’s something assigned there, but it’s certainly not as much as rented ground would be. So, if you just take $414 minus $120, we’re saying that they made $294 per acre on that field. That’s what they’ve got left to pay themselves. Their profit, I mean, that’s the number. So that’s a pretty good number in my mind.
Okay, so same grower: if we compared that to a rented field that they had, their costs were similar, but their soil tests on that rented field weren’t as good. So we were working with them to have a higher spend on their fertilizer inputs to try to raise some of those soil test values. So they spend a little more on fertilizer. Their seed costs here are $105, a little bit higher. Fertilizer was $134 average and quite a bit more in some parts of the field than that. But overall, averaged, that was $30 higher on fertilizer spend. Chemicals were $50, and their operations were the same at $119. So the yield on that field actually was far better. It was 220 bushels. So, if you use the same sale price, that rented field’s yield efficiency was $466 compared to that $414. So, even with a higher overall spend to try to build up fertility, they made $52 more per acre. Okay, we also saw some amazing correlations to the applied potassium as compared to yield on that field. So we were also running some tests and trying to understand: is this additional fertilizer actually paying? And we did. We saw some increases. We saw some really clear increases from that applied potassium to yield. And it was a very boring application, and we had some learning blocks in there. So we had the ability to really hone in on what was responsible for the agronomic impact, and we thought that that applied potassium was. So, okay, now this is a rented field. The rent is $275. So it only left them $191 for their profit. That’s compared to the $294 on their own field. So we learned a few things. Number one: first of all, both of those fields were profitable, which is amazing. I would say very profitable. They did pretty well. But we learned a few things: lower yields on the lower-cost land still had the biggest return on their investment. So, even though the yield was worse with the input cost that they had, there was still a bigger return because their land costs are really low.
RENEE HANSEN: Yeah, I was going to ask that too when you were explaining this. Okay, wait, that’s great. Their yield efficiency score is $466 over $414, but that’s owned versus rented land.
SARAH WINDHORST: Yes. So, at the end of the day, they do the math for that second piece of the equation, but it’s pretty easy math, right? So the other piece that we learned was higher yields, as they spent more on applied fertility, paid off, and it covered. Remember, they had a higher fertilizer spend. There was a higher fertilizer cost per acre on that rented ground. But at the end of the day, they still ended up with more money in their pocket. So the higher yields covered the higher cost, and it covered the higher cost of the land. So we had a really key learning: it encouraged us to focus more on building potassium levels even higher, even in their own ground. So, this year, they ended up going after trying to build fertility on their own ground too and figured if we could achieve the 220 bushels on that ground, they could increase their profits by another $87 per acre at those same prices. I’m not done with the analysis for ‘21, but if we drew that into ‘21, the owned field that we were looking at in that example did have far better yields: 225-plus this year. Obviously, the grain prices are there. They’re great, so we know that they’re going to see a really good return this year. And we had increased their fertilizer spend by quite a bit this year. So they’re spending a lot, really trying to build up the ground. Some of those prices are high. Some people, obviously, have significantly different input prices, maybe have great fertility and aren’t spending as much on fertilizer. They don’t have to try to build, but where these guys are at, some of their potassium levels are 240-plus. But there are parts of the field that were under 100 parts per million of potassium. We’ve definitely got areas to work on but are finding that, even while working on that, they can still have really great profits as you use this metric to understand: did it pay or not?
RENEE HANSEN: Yeah, Sarah, I think this is a great example of how a grower can make a decision for next year. And I guess my question is: what made you guys think that you wanted to look at potassium specifically?
SARAH WINDHORST: That’s where it comes back to the agronomics and why, really, at Premier Crop, we partner with advisors, and we employ some advisors. But it’s really about that conversation that you’re probably already having with the grower as an advisor, trying to chase after high yields. I mean, really, you’re looking at, agronomically, what’s lacking, and what do we need to do? So, in this case, it was obvious because they had some fertility issues that they wanted to try to tackle. If you’re just talking to a grower about having a higher spend on potassium, let’s say, that’s a tricky conversation. There’s got to be some convincing done there. Well, how do I know it’s going to pay? How can I be sure that that’s going to have a payback? And in this case, we had the example of this rented field, where we had learning blocks out, and we had a really clear correlation that we saw some increases even from the applied fertility. It was a really easy conversation when we had put out some trials, had results from that from the prior year and then were trying to make decisions in that same thread. So, yeah, it’s all back to just trying to tie in a way to help bolster the agronomic knowledge with solid economic data.
RENEE HANSEN: Yeah, I think that’s a great example that you just explained of how a grower can make decisions for next year. Not only on that field alone, but they also changed it for some of their other fields, so their other fields could profit based on that information. So this is an excellent conversation, Sarah. I really appreciate you explaining more about yield efficiency and how Premier Crop can help a grower make decisions for next year based off of visuals and group benchmarking and the dashboards that we’re able to show them. There are a lot of conversations that go into it. It’s not just a pretty picture that they look at and say: ‘Okay, now I’m going to make a decision.’ There are advisor conversations, like you said, that go based on economics and agronomics. So, if there’s anything else you’d like to add, or how people can get ahold of Premier Crop, that’d be great.
SARAH WINDHORST: Yeah, the only other thing I would add is, if you think about that relationship between an advisor and a grower, the other thing that this does is it creates excitement to learn more. So we’ve got growers who — even if they, historically, are like, yeah, sure, whatever you say — who’s got growers that are all of a sudden engaging and wanting to really talk through their decisions and having powerful tools to use in those discussions. We’re just bringing growers to the table in a new way. And we’ve got growers that are really excited about what they’re going to find out next year and people who are just chomping at the bit to see their reports and see their dashboards. As soon as that yield is ready off the combine, sending it in and asking if the data is ready. And: ‘When can I look at my dashboard?’ Because there’s such great information that really does drive them into the next year. And as they’re trying to make decisions and trying to plan for the next crop, that’s really key information to have. So, yeah, it’s been a really great way to just solidify relationships and get people excited about doing better agronomy with economics tied in a really solid way to it.
RENEE HANSEN: Yeah, that’s a key point, that it is continuous learning, using that advisor. So, yeah, thank you, Sarah, so much. Thanks for joining us, and thanks everybody for listening to the Premier Podcast.
SARAH WINDHORST: Great. Thanks, Renee.
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