NexTec recently conducted an annual agriculture industry study to uncover the most pressing challenges agribusinesses face. We surveyed 113 individuals in 39 states who worked for agriculture companies.
Let’s look at some of the key takeaways we discovered:
Managing costs is the biggest challenge for agribusinesses
A total of 86% of respondents admitted that costs were a challenge in managing an agriculture business, with 41% citing it as a significant challenge. For comparison, efficiency and productivity were the next challenges deemed “significant” and received just 27% of the vote.
There’s no doubt that costs are a chief concern among farmers, particularly with volatile markets, rising labor costs, and costs associated with equipment maintenance, technology, and business growth as a whole.
Without properly managing costs, agribusinesses may be unable to grow at a profitable rate. However, the types of information technology applications (including agriculture ERP) that are available today can help farmers to better understand their various operating costs and specifically how they’re affecting profits.
Forecasting is the largest management concern
Management challenges are a category of their own, and forecasting took the lion’s share of survey responses as the top contender. In the survey, 79% of farmers claimed that predicting costs, production, and revenue is more challenging than planning, traceability, or managing production, sales, inventory, quality, finances, and personnel.
According to a recent report by Gro Intelligence, this could be because the agriculture industry as a whole still relies on data delivered in the form of monthly reports, compared to other industries that can access real-time data updated by the second. This leads to a dangerously inaccurate forecasting model that doesn’t allow agriculture businesses to capitalize on their data in a way that can remove much of the guesswork from their predictions.
Nearly 75% of growers are still using spreadsheets and disparate systems
Part of the inefficiency fueling the lack of ability to forecast is the presence of outdated systems and tools, of which 75% of farms are still using. Despite the fact that about half of farming operations are using advanced solutions like Warehouse Management Systems (WMS) and Enterprise Resource Planning (ERP), three out of four still rely on spreadsheets and disparate systems to assist in operations.
The good news is that ERP and WMS are leading choices for near-future upgrades and investments. In the survey, 44% of farms plan to upgrade to ERP within the next two years, while 39% say the same of WMS.
If respondents stick to this upgrade schedule, then forecasting and cost management may not be as great of a challenge within the next two years as they are now. Agriculture ERP specifically is designed to provide holistic insight into farming operations and use your real data to effectively manage costs and make accurate forecasts.
How NexTec is addressing growth challenges with agriculture ERP
Given the current agribusiness challenges, NexTec is helping to address them with thoughtful design and implementation of agriculture ERP. As a leading Sage partner, NexTec works with agriculture businesses to create robust solutions that unify operations, finance, and data to help you improve efficiencies across the board.