By Dave Dodds
The New Zealand team has just returned from a huge week at the National Fieldays event at Mystery Creek, Waikato. With close to 134,000 attendees over four days and 1000 exhibitors, this annual event is not just a great opportunity to chat with farmers about using Figured and Xero, but also to get insight into the current mood of the industry through the conversations that we have on stand, and the industry leaders that we have the chance to hear from.
People from all over the world attend Fieldays, looking to the innovative New Zealand farming sector for learnings that they can take and apply globally. We were pleased to welcome our own international guests from the accounting and banking sector from Australia, USA and Ireland to showcase how things are done in our part of the world, as well as partners from throughout New Zealand.
A sustainable approach to business
While sustainability is a hot topic currently in regards to on-farm practices, what we heard at Fieldays was an increasing number of conversations centred around the importance of not just environmental sustainability, but business management sustainability.
We’re pleased to see that with this has come increased focus around profit over cash as a key performance indicator for farming businesses. With an improved understanding of how a farm is performing, farmers and their advisors are better equipped to manage sustainably through both good times and bad.
I spoke of the important responsibility that advisors have in stepping up to lead this shift in focus. Given the contribution of the farming sector to national, and global economies, advisors owe it to the industry to help farmers make sense of their data, providing more informed advice through an understanding of behaviours and trends.
In a talk hosted by Figured and Xero for our guests, we heard from Fieldays CFO, Anthony Burman, and economist Cameron Bagrie, who both discussed the value of accessing this data to improve efficiency and productivity - the drivers of growth. They also talked about the changing role of advisors, who must shift their focus from just financials, to instead consider insights from this data at an operational level in order to help drive farming businesses forward.
Bagrie also reiterated my point to advisors, saying that accountants and banks need to act as educators and connectors to tools like Figured and Xero, leveraging the trust they have established in the market to lead a change towards a sustainability mindset. We work alongside many partners who have already embraced an advisory focused approach to their business model, and with this uptake, we’re seeing that New Zealand has an opportunity to lead on this globally.
A time of transition
We also saw a lot of discussion about the industry being in a period of transition. The phase we have been in has been largely focused around investment in intensification, supported by associated increases in land values and relatively easy access to capital, nitrogen and labour. Whether or not we have reached “peak cow”, it appears that this phase is coming to an end for livestock-based farming systems.
It was increasingly evident at Fieldays that the next phase therefore will be focused on productivity and margin improvement for farmers. Given that the NZ farming system has many natural advantages, and we have equal access to technology to drive productivity gains - how do farmers now exploit that for profit growth? Particularly given there are now some inbuilt constraints - most particularly reduced access to labour and nitrogen intensity - so innovative solutions will be required.
This is where Figured is most relevant, enabling a focus on effectiveness and productivity through a better understanding of profit drivers with the help of advisors.
Interestingly, whilst this appears to be a NZ trend, our overseas visitors all saw this movement to focusing on productivity and profit as being a global one, whether it was in response to lower commodity prices in the USA, Brexit in the UK or the drought in Australia.
An optimistic outlook
The Fieldays Society reported a record year for equipment sales, as well as record numbers in attendance for the event’s 50th year. While it’s pleasing to see an upbeat, well-performing agri economy, the question should still be asked - how well informed about their finances are these farmers when making these purchasing decisions? We know that right now is a good time in the industry, but do we know just how good, and are we doing all we can now to prepare for what’s ahead?
It comes back once again to data, said Bagrie, who commented that in a sector with such high levels of debt, the importance of tracking, monitoring and reviewing performance so that you have the right data to demonstrate productivity, efficiency and yield is critical in order to access finance for growth when you need it.
What’s ahead for Figured
Year on year we’ve been excited to see increased market awareness around Figured’s proposition. Our key message has always been centred around collaboration, and leveraging technology to do so. We know that by connecting farmers with their advisors, they have access to not just insights, but to conversations and advice that can really drive their business forward. We’ve spent the last few years building out our core functionality, and now the focus is on refining user experience to help more farmers get better connected with the advisors who can really help them drive efficiency, productivity and ultimately, profitability.