This month Progressive Dairyman focuses on using technology to increase dairy efficiency and productivity. We asked Tamara Kass, director of agricultural products at DTN, about the trends she sees in how news, weather and market information are being delivered to dairy producers.

1. Why deliver information by cell phone or mobile unit?
Farmers in the United States tend to be doing more and more paper work. They tell me they are in the office more than they would like, making more time-sensitive decisions. However, at the same time, it is very hard to keep up with the markets while you are spraying the field. It is very hard to know what weather is doing while you are out working with cattle. There are some real important aspects of real-time information that, regardless of where you are at, don’t stand still or that tick up or down.

It’s the mobile ability that allows the producer to keep doing what he or she has to for day-to-day management and production and be able to keep up on this information, versus going back to a resource or hunting and pecking or having to wait until noon or whenever a local television station may be giving an ag market report. Mobile technology really allows them to operate their businesses more profitably because it keeps them in tune with the ever-changing markets and weather while they continue to do their production business. For example, for a producer who is milking two to three times per day, markets are usually open during one, if not two, of those time periods, and if they were at all doing any sort of risk management program they may need to know that today is a good day to buy an option to help manage the milk price they are getting.

2. Do you see cell phones, PDAs and SmartPhones as a dairy farmer’s primary source for off-farm and market information?
It probably all depends on the business operation and the dairy producer if they are going to be mobile. I image it is going to be one of their primary sources, but it may not be their only one.

Fortunately, one of the aspects of my job is to talk to a lot of producers, especially dairy producers. It seems more and more are relying on multiple information formats, including mobile delivery, whether it’s verifying a main source or whether it’s having the ability to be mobile. It’s something that works for them in the office or in other locations.

I think we are going to get more people using mobile units, as they become more and more dependent on real-time information. In my work, I see [cell phones and PDAs] picking up as a bigger piece of a producer’s information source.

3. Several years ago many people would have said, specifically for weather, their main source was a local television station. Do you still see that people rely on that medium as their main information source or are people starting to switch, perhaps to the Internet?
Still I would say most weather is sourced from the television. But as everything becomes more complex and the need for more accuracy increases, producers are looking for business-grade forecasts. They are looking for current conditions that are for their operation not for the local airport that is 50 miles away in a different city. They are actually looking for a rural forecast, and you’re not going to find that on a TV station, as their reports are to meet the masses.

So what [DTN] did is tap into more rural forecasting points – more than anyone else in the country. With 35 percent more forecast points than the National Weather Service, we are able to give a better rural forecast than anyone else, and we are able to deliver that via the Internet, mobile or satellite.

And [DTN] gives ag-relevant weather. You are not going to get growing degree days, humidity and soil temperatures on the nightly news. I do see people moving away from the traditional sources primarily because they are looking for something more relevant and more accurate to their location. The other reason I see people switching from the typical nightly news or daily news report is simply due to time. Producers do not farm around a static schedule. They can’t necessarily be in at a specific time to listen to the news, or weather may change overnight after the 10 o’clock news. They may need the most frequent update anytime they are ready to make a decision. So instead of waiting for that news they are able to, with our mobile, Internet or satellite products, have weather on-demand. They can pull up weather and industry forecasts for their exact farm when they need it. I see that making a big difference.

4. What types of information do you see being delivered by cell phone, Internet and satellite in the future? What do you see on the horizon?
In context of real-time information, I see making risk-management decisions becoming increasingly important. I’m forecasting there is going to be more ability for producers to make some of those real-time decisions via the phone, maybe doing some buying and selling without actually talking to someone.

I also see, with animal ID and other things coming on board, there will be a lot more incorporation of real-time information into exactly how individual animals are doing, helping make more management decisions on a real-time basis while you’re out and about with the herd. I see that potentially making a big impact. Staying on top of news affecting imports and exports or even staying on top of government programs that would affect environmental things could really make a difference to producers. And it seems as we become more and more global and in touch with consumers, a lot of that news will affect the markets. And I see that news being more accessible to the producer, wherever they are.

5. Could you define what is a “risk management decision”?
Basically, it is just putting together a marketing program allowing a producer to have a secure profit no matter where the markets are going. It’s knowing where your break-even prices are and doing some forward contracting or hedging with futures or options in order to counter a drop or take advantage of a rise in prices.

It’s using the market tools available for a producer in order to take advantage of marketing opportunities. So when you say, “risk management decision” we are talking about buying a futures contract or option or simply using cash contract tools.

As you know, over the last five years we’ve seen historical highs and 30-year lows. It’s been pretty hard for producers to plan a budget at both $8 and $18 milk. So it’s really putting a strategy together to be prepared for either extreme. For risk management, you don’t have to have thousands of cows in order to do it. If you are smaller, it is more necessary because you don’t have that much to give.

6. Describe the demographic group within dairy farming most likely to use a cell phone to check news, weather and market reports?
For the most part, producers love technology. They are getting the latest model tractor, milking equipment or whatever they’re doing. Quite a few are adopting the latest technology and using their mobile devices for more than just telephones. They are using them for data services, including news, markets and weather.

It’s hard to stereotype what segment of producers is using this technology. We just came back from doing customer advisory board meetings in four different states, bringing in dairy, grain and livestock producers, and it’s just been scattered; you’ll have a young one say “absolutely not” and an older one using it right next to him, saying the opposite.

It really is personal preference. If they have been using things in the past that are more technical, they are typically going to pick it up. As people find they need information on-the-go, they are finding out they are going to need to do something different. Anymore, the phones are so much easier to get the information, you don’t need to be a techno-wizard to do it. But by nature, farmers are doing so much technical stuff on a day-to-day basis it’s nothing for them.

7. If a dairy farmer says they don’t need real-time market quotes, news and weather, how would you respond?
Let’s take markets for example. There is a school of thought, and I tend to agree with it too, that you don’t need to be watching the markets tick by tick. What you need to do is know enough and know the trends to be able to enact a marketing plan. A marketing plan is set in place and shouldn’t change on a day-to-day basis or definitely not with the tick by tick. What [DTN] put together is DTN Six FactorsTM Market Strategies that cover all market scenarios. There are just six factors you need to look at on a daily basis to confirm your marketing plan or to let you know if adjustments should be made. If the market does make a change one day, it doesn’t necessarily mean you need to change your marketing plan. But you should be aware and watching those six factors. And that is not going to take you hours of labor pouring over technical charts and staring at market quotes, but instead being alerted as per when the factors warrant a strategy change.

In general, a producer does not need to be watching a tick-by-tick, real-time quote. But DTN does make it available to those that do want to watch it.

As far as real-time weather, people may or may not want to be watching that every minute. But wouldn’t it be nice to have an alert sent to you when something in the weather exceeds your threshold so you can adjust your plans? You don’t need to be watching all of the data every minute, but somebody does need to be watching it for you. And that is really what DTN is. Really we’re a host of dozens of experts, whether it be meteorologists or marketing analysts, in your back pocket. We let you know when there is a change in the markets or in the weather or in the news that is going to affect you.

8. What advantages could a dairy farmer gain from using a cell phone to receive current market information?
Agriculture today is an information-dependent business. However you want to receive it and whatever is most convenient for you is fantastic. Internet and cell phones are great options.

Again, what we do is allow you to still do your day-to-day things production-wise in the dairy industry, but we still keep you up to date on what you need to know. Farming is so information-dependent that you can’t possibly look at or read everything you might think you should be able to read. So that is what we do for you. We spend the time to condense it and send it out to you.

9. As a product manager for mobile information, what have you learned about the information needs of farmers?
In general, it seems there is so much more volatility in the markets, and the markets are tighter, that information needs are growing. At the same time, the sources are growing and the things they need to be watching are growing.

What I’ve been hearing a lot from producers is information overload. They just don’t feel they can stay on top of it. That seems to be a big concern with producers.

10. Do you think farmers will need more instant-access information in the future, or if they are already overloaded, how will information distribution change so they don’t feel overloaded?
I think information will become more specific for a producer and also be available on-demand. I think it will also be filtered in alert-type formats. Meaning you can set your own thresholds so if you want to know about a story affecting markets or if rain is going to be in your area, or if market prices get above $17.50 per hundredweight, you will.

I think the way things are moving is toward more on-demand, relevant and local information in an alert-type format where you can set what comes to you.

11. Your company’s product delivers market conditions, news and weather? Which one of those three services, in your opinion, would most benefit a dairy farmer?
All of them collectively are going to affect a dairy farmer. It’s going to depend individually on that producer how much he or she manages market, news and weather information.

If he or she is inclined to act more on production decisions, weather may only be of value. If another producer, say in California, has sunny conditions most of the time, they may be more interested in making marketing decisions.

That question is going to be answered by the individual producer – what type of information they are using or are willing to use.

You could use all three, obviously, but a producer may be dependent more on one versus the others in managing his or her operation.

12. Do you believe the following statement? Why or why not? “Dairy farmers with cell phones and on-the-go mobile updates have a distinct advantage.”
Well, I’m just going to say true. I don’t think you could really stay up to date, day to day by relying just on communications when you get back to the office after so many hours spent outside.

13. Can using a cell phone to receive on-the-go information increase profitability? Why or why not?
Absolutely. Using a cell phone to get your information can help you increase your bottom line by being aware of market-impacting changes that might require you to make a decision or weather changes that might require adjusting a production decision. Those are things that can impact your bottom line significantly.  PD

For more information about a DTN mobile, Internet or satellite service, visit www.dtndairy.com or call 1-888-350-0972.

Walt Cooley, Editor, Progressive Dairyman