Farmers milking technology for burgeoning businesses
Farming is a crucial part of New Zealand's economy but farmers need to sort the wheat from the chaff when it comes to new technologies targeted at making it easier to do business.
Federated Farmers national vice president Andrews Crofoot said a lot of work was being done on farming technologies.
Crofoot said tools such as Cashmanager Rural, Xero's Farming in the Cloud, and farm management software FarmIQ helped farmers handle their business more efficiently.
Farmers were eager adopters of software and online tools that helped increase efficiency and productivity, he said.
"If you have a reason to use the technology you'll pick it up.
"If you think you're supposed to use it but don't have a compelling reason to use it, it's really hard."
ASB general manager of rural Mark Heer agreed that there was a lot of innovation in farming technologies.
However, farmers had to sort through the stream of new offerings to find the tools that were relevant to them, he said.
ASB had 4500 farm customers across the country and all of them were using internet banking tools.
"I very much champion the view that farming is a business of science."
About a third of the bank's rural business owners used its smartphone app and the uptake was growing exponentially, Heer said.
ASB linked its banking services with Xero, MYOB and Cashmanager.
In June, online accounting software company Xero launched its rural online accounting and farm management service, Farming in the Cloud.
Xero head of rural strategy Ben Richmond, who created the software, said it provided a suite of tools allowing farmers and their accountants, banks and rural service companies to work together from the same set of online, real-time data, to make "confident on-the-spot decisions".
The collaboration meant the accounting and business management role becomes less arduous, allowing more time on the farm and and improved profitability, he said.
The technology would help farmers with tasks such as forecasting, livestock reconciliation and establishing an accurate picture of their financial position.
Richmond said the success of the rural sector - a major part of the economy - hinged on the businesses that supported farmers.
He said 60 accounting firms had adopted the technology and each firm had between five and 10 rural clients.
About 10 per cent of those farmers were using the software on the farm.
"To say the ag sector is lo-tech is fast becoming something you can't say.
"Farmers really get the importance of budgeting and get the importance of running the farm as a business."
Richmond said Xero's current focus was integrating the different technologies from production tracking, to feed budgeting, to accounting.
Accounting firm PwC had also weighed inwith a financial modelling tool that took basic financial modelling techniques and factored in the probability of different outcomes due to variations in things like dairy payouts, feed prices and productivity.
PwC corporate finance director Mike O'Connor said the tool addressed shortcomings in the traditional farm budgeting approach.
"The power of this technique is enormous, allowing the probability of a farmer failing to meet their banking covenants or needing to increase borrowing to meet a probable cashflow shortfall to be reasonably assessed."
Farmers and their financial managers had a better idea of their likely output and could implement strategies well before a crisis, O'Connor said.