Baby Steps to Bigger
Profits:
The 5% Rule
CropSphere 2016
www.hebertgrainventures.com
Overview
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TEPAP & Dr. Danny Klinefelter
The 5% rule outlined
Why is 5% important
Farm Financials 101
5% brain storming
TEPAP & Dr. Danny Klinefelter
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The Executive Program for Agricultural
Producers
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Alumni association AAPEX
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In short, a masters program for farm manager’s
Dr. Danny Klinefelter
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Director of TEPAP
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Executive Secretary of AAPEX
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Named by Top Producer magazine as one of the
25 people in the world who will have the
greatest influence on the future of American
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TEPAP Farm Management
Philosophy
7 Key Principles:
1.
Jack Welch – True competitive advantage
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Wayne Gretzky – Strategic Management
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Analyzing – what not to do & Opportunities
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Learning Organizations – if its not broke
haven’t looked hard enough
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TEPAP Farm Management
Philosophy
Continuous Management Improvement
6.
Timing
7.
The future belongs too……
The 5% Rule
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Baseball analogy - .300 hitter vs .250
Klinefelter Farm credit study - data showing
top 25% were only about 5% better than
average (82-87)
David Kohl FINBIN research (2012)
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Top 20% NI of $859,000
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Bottom 20% $14,000
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Gap widening?
5% - fun part for #’s nerds
5% baby steps = BIG EFFECTS!
Why is 5% important……
Why is 5% important……
Why is 5% important……
Catch a Unicorn and ???
How are we going to accomplish?
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Biotechnology
Information technology (measuring and
monitoring)
Mechanical Implementation/process
control technology
FARM MANAGEMENT SKILLS
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Margins
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Gross Margin & 5%
Coordinate!!
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Marketing
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Inputs (2009)
Accrual Financials
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Producers
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Banks
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Accountants
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Consultants
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4 R’s
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Gross Margin & 5%
Right source, rate,
time, place
On farm trials
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VR
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Chemtrition
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Fungicides & seed
treatments
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TKW, seed rate, plant
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Price
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Gross Margin & 5%
$130/mt variance
EDUCATION
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Futures
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Options
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Basis
RISK MANAGEMENT
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Old programs and
advisors not
LPM & 5%
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Cost management
Perfection Vs
Logisitic’s
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LPM focus –
efficiency
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24 hr shifts
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Auto steer
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Combine settings
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Data collection
LPM & 5%
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Change is inevitable
– not broke = look
harder
Strategic mgmt. – in
vs on the business
HR – shifts, culture,
value efficiency
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Benchmarking
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Peer groups
LBF & 5%
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Tends to be a
function of age and
equity
Another thought….
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Enterprise resource
planner
Human
hours/acre????
Why is this all important???
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Legacy
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Leave the dirt and Financial
Statements in a better state than
the last generation
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Feed the world
Reading/Audio Books
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Good to Great
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4 hour Work week
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7 Habits of Highly Effective People
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Scaling Up 2.0
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The Rockefeller Habits
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The E-myth Revisited
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Great by Choice
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Rich Dad, Poor Dad
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Klinefelter Articles, Boehlje Articles
Kristjan Hebert, CPA, CA
Managing Partner
PO Box 1307
Moosomin, SK
S0G3N0
Office : (306) 739-0028
Cell : (306) 435-9924
hebertgrainventures.com
Twitter: @kristjanhebert
facebook: Hebert Grain Ventures