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Computer and Internet access improving

Only 61 percent of Texas farms and ranches have access to computers, according to a survey by the National Agricultural Statistics Service (NASS).

Of that number, only about 30 percent use computers for business.

Jose Pena, professor and Extension economist-management, Texas AgriLife Research and Extension Center, Uvalde, says the 61 percent of farmers and ranchers with computer access is an improvement over the previous survey results, 48 percent, in 1999. And that 30 percent number is an improvement over the 20 percent who used computers in their businesses.

Internet access, Pena says, “appears to be the prime reason for increased computer usage since computerizing farm business management appears to be growing very slowly. Internet access increased from 31 percent in 1999 to 57 percent in 2009.”

The survey shows Texas lagging national trends slightly. Computer use nationwide by farmers and ranchers increased to 64 percent in 2009 compared to 47 percent in 1999. “Access to the Internet to keep up with the information age appears to be one of the motivating reasons for increased computer use,” Pena says.

Nationwide, 45 percent of crop farms use computers for farm business compared to 37 percent for livestock operations.

“According to the survey, about 59 percent of U.S. farms now have Internet access, compared with 57 percent in 2007, 29 percent in 1999, and 13 percent in 1997.”

Crop farms outpaced livestock farms 60 percent to 58 percent in Internet access in the most recent survey.

Large farms use computers more than smaller ones. The survey shows that in 2009, 81 percent of U.S. farms and ranches with annual sales and government payments of $250,000 or more have computer access. That compares to 70 percent with sales and government payments between $100,000 and $250,000 and 62 percent of farms and ranches with revenues less than $100,000.

Pena says the relatively low percentage of farms and ranches that use computers for business management decisions should be a concern. “This use remains relatively low and should increase, especially as the weakened economy increases financial risk in the farm and ranch sector.”

The potential for computers as farm management tools is significant. “Use of computers to gain access to and process information is credited as one of the primary reasons the U.S. economy has prospered and will probably recover very quickly from the recent economic downturn,” Pena says. “The farm sector is following the same information access process that has been so successful in the urban business sector.”

He says information technology that became widely available in the 1980s has made a big difference in improving business performance. “Widespread and effective application of information and other technologies appears to have had a significant effect on increasing productivity and reducing business costs.

Improved availability of Digital Subscription Line (DSL), Pena says, has a significant impact on increased use of computers in farm and ranch applications. Satellite and wireless access are the most common on 13 percent of U.S. farms with Internet access. Cable is the primary access method on 13 percent of the farms.

He says agriculture will benefit eventually through more efficient crop production. “While most producers adopt new technology to increase production, increased profit is more likely with the adoption of increased data processing and analysis at the farm.”

Computer use to coordinate revenue and cost management could be significant to farms and ranches. Pena says computer analyses can help calculate break-even yields and prices that help farmers recapture capital. They also may evaluate various outcomes to changes in production strategies, weather events and market fluctuations.

Farmers may also “monitor the actual financial performance of the business as a production plan is executed,” he says.

Pena says a colleague, Danny Klinefelter, professor and Extension economist, says most producers have scant idea how well they compare to competitors. “The majority think they are average or a little above,” he says of Klinefelter's study.

But the economist contends that knowing how well a farmer stacks up to average production is not enough. “Numerous university studies have found $100 or more differences in net income per acre between the top 25 percent and the bottom 25 percent of farmers in the same region, producing the same crops, even after adjusting for differences from owning versus renting.”

Pena quotes a Kansas study that shows about 50 percent of the difference is due to revenue and about 50 percent to cost.

“Use of a computer in farm and ranch business management could help improve performance efficiency,” he says.

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