Businesslink

Small Changes Compound Into Consistent Results

Katie Micik Dehlinger
By  Katie Micik Dehlinger , Farm Business Editor
Jeremy Jack and Stacie Koger, Silent Shade Planting Co. (Progressive Farmer image by Jim Patrico)

Little things, done consistently, make the biggest difference.

I've been applying this philosophy almost constantly since David Horsager, an expert on trust, discussed it during his keynote at last year's DTN Ag Summit. I began exercising in September, for instance, but since David's presentation, I've consistently pushed myself to try harder variations of different exercises. As a result, for the first time in my life, I can now do push-ups on my toes for an entire workout.

While that may sound trivial, especially to those with ample upper body strength, tiny improvements from each workout added up to something measurable, something that felt insurmountable just half a year ago.

Another way to think about the power of little changes is Danny Klinefelter's 5% rule: A 5% increase in the price received, a 5% decrease in costs and a 5% increase in yields will often produce a more than 100% increase in net returns.

Jeremy Jack, who farms in Mississippi, included a piece about the 5% rule in his farm's quarterly newsletter as a way to help explain their mentality to landowners and business partners. Using university crop budget estimates, profit returns in his area were negative $73.96 per acre on corn assuming an average yield of 174 bushels per acre, price of $4.46 per bushel (the cash harvest price at the time) and expenses of $850 per acre. Applying Klinefelter's 5% rule, yields and prices rise to 182.7 bpa and $4.68 per bushel, while costs fall to $807.50 per acre. The result is a net profit of $47.53 per acre. That's a $121.49 per-acre improvement.

"Small, incremental positive changes applied consistently will compound on each other to help multiply growth for the good," he says. "We sometimes think it's the home runs that always win the games. If we would just hit base hits every time, the score wouldn't need a home run. Little changes can be made every year to increase productivity and lower cost. If you focus small, the reward could be big."

As a new growing season gets underway, find little things you can improve on and stick with it. I bet you'll have more to show for it than push-ups by the end of the season.

> Read Katie's business blog at about.dtnpf.com/business.

> You may email Katie at katie.dehlinger@dtn.com, or visit @KatieD_DTN on Twitter.

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Katie Dehlinger