We had requested a powerpoint machine but that didn't show up either, and so we're just going to make do with some old fashioned transparencies. My name is Trena Grabowski and I'm from southern Illinois. I'm a certified public accountant. I have lived on the farm for the last 32 years and did not grow up on the farm, actually grew up in a small town. My husband and I have farmed for all those years and we recently turned the farming operation over, the management of it over to our son. I do some writing for some magazines you may have heard of in this country. It's the Farm Progress Group, which is Prague Farmer, Texas Farmer Stockland, Colorado Farmer Stockland, Pennsylvania Farmer, Missouri Ruralist. There are several new magazines on the east coast as well, and when I first started writing for them, they were owned by ABC Cap Cities, then Mickey Mouse bought them. Apparently, Mickey Mouse didn't like it, because he spun a sock. We were recently bought by World Preps. Yes, so actually, technically I work for you, I guess. The writing is really just an advocation. I do the magazine articles in the area of tax and finance for them as well as the farm tax paper, which was back on the chair as you came in. There's a brief handout. If you want to know anything else about me, it's that 16 page resume attached to the back. No, there's a one pager back there. My name's Trenna. The double n's make the e short. However, I answer to just about anything that starts with a p. So, Trenna, Terena, Theresa, Terry, it doesn't matter. Grabowski, I pretty well know if somebody says, hey, Grabowski, they're either talking to me or they're talking to my daughter. My daughter's going to work on this presentation as well and she helped me put it together, as well as she's going to do part of it on global positioning a little bit later on, so I'll introduce her to you when we go to that portion of the program. Please feel free to get up and go get coffee or whatever you can find, whatever you'd like, you know, please feel free to come and go. There are lots of seats up in the front, but I do know in all the other sessions people said move up front, I didn't see a mass movement to the front, so, you know, if you want to come up here fine, if you want to be near the door, that's fine, too.

This session is on Farm Business Management Information Systems. The chief task of a manager is decision making. The managers see the result of affective management in the successes of the business and as a manager, you earn your keep by making good decisions for your business. Those same management tools that work for IBM, that work really well for Bill Gates, work for us in agriculture as well. Whether the business is grossing $20,000 a year, or 200 million dollars a year, the same management principals apply. And one of those is, you must have a good management information system. You must accumulate good data, which then is transformed into good information which you can use for your decision making. A good management information system, well, let me go back and say, if you do not have a good management information system, that doesn't mean you don't have a system. You do have a system, because if you're in business, you're making decisions, and you're making those decisions based on something. Right? Something. You're getting some sort of information from somewhere. It might be a disorganized system. It could defy description, I've seen some that do. There are days when the top of my desk defies description and I've thought, well, really what I ought to do is put a drop cloth over it, and then start over. And then if I need anything that's on it, I could dig under and maybe find it. But even if stretching the work system and that's what we may be doing in applying it to some people's system. If you're using some information, you've got a system. But a good management information system is an organized method for providing past, present and projected information on internal operations and external intelligence for use in management decision-making. When I was putting this program together, I thought, I think I will just do some research on the internet and I'll check out our own farm library, because we do have both Elizabeth and I are kind of book nuts and we do have an extensive library in our home. And anywhere I looked for management information systems, business information systems, you find just a few paragraphs about everything else, I started to say degenerate, and I don't want to use that word, but then you switch to computer and you have pages and pages and pages about computers. Well, we're going to talk a little bit about computers in a little while. But, I want you to understand and you do understand if you think about it that the information that's generated from your computer system is a part of your management information system. but there's much more to it than that. Now, I have mentioned that there's data and there's information. And sometimes we tend to use those words interchangeably, but really, they're not synonymous. Vast quantities of data are collected in any business organization. Data is statistics, opinions, facts, predictions, categorized in some way so that you can store that data and retrieve it. Now, it's still data if it's in the great black hole somewhere, but if you can't get to it and retrieve it, it's not useful data to use. Now, once you retrieve that data and put it into a system for something that you're going to be able to use, then it becomes information. So information is data that's relevant to you as a manager in making your business decisions. A sound system for effective decision making should have certain characteristics. Among those are it must provide up to date information, and going hand in hand with that is the information must be available in a timely manner. What am I talking about there? Unfortunately, and this may not be the case, again, I asked how many folks we had from Australia. I know we have people from the U.S., we have people from Australia. What other countries do we have represented here in this room? Do we have any?

Guinnea.

Guinnea, ok. Any others?

Italia.

Italy, ok. Wonderful.

Canada.

Canada, ok. Great. And you are Canada also? Great. Wonderful. Ok.

I know it's the case in the U.S. from having visited with some folks from Canada in some of the other sessions and some of the other speeches and presentations that I go over the country, I get the feeling that it's kind of that way in Canada. I wouldn't be at all surprised if it's not that way in Australia because ladies, when we were there 4 years ago, we found out you're a lot like us. In fact, one thing that our group and, by the way, we had a group of 20 American Agriwomen who visited Australia for the first international conference. Among the folks on that tour were Martha Rittenger, who's an attorney with American Agriwomen and she's here in the group today. And Elizabeth was on the tour. And there are some other ladies who are at the conference and I don't see any in this room who attended the sessions as well from the U.S. But one of the things that we noticed was not only did these ladies speak our language, although sometimes we had to listen really close to catch what you said, but, in some instances, there was no more difference between you and I than there was between American Agriwomen from Maryland and American Agriwomen from California. American Agriwomen from North Dakota, you know, they sound kind of funny. They kinda roll their o's a little bit and sound really neat, and American Agriwomen from the south. And then you've got the hillbillies, yeah, that's where I'm from in southern Illinois. And really, you guys were just like us. So, I have a feeling that the point I'm going to make probably applies to you to. And that's that when we're really good and full of good intentions, that farm record keeping system is going to be up to date. I mean, at least every right. Right? You get that bank statement reconciled so we know exactly where we are and that works about the first 2 or 3 months of the year. And then we get really busy. For us, it gets to be planting time. Maybe for some of you it's lambing season, and then we're 2 months behind and we're 3 months behind and then it's people like me because in my real life that's the one that I get paid for doing. I'm a certified public accountant, so I'm always on to my people, get your records up to date and get in here in October or November so we can do some tax playing. And sometimes that works. Unfortunately, most of us, I shouldn't say most of us, because in that one instance, I do practice what I preach, 'cause money's involved, I mean, after all, we're farmers too, right? But those records need to be up to date, but so many folks do their farm record keeping catch ups in January and February. And unfortunately, so many people, people cowl, people that are my good clients cowl and say, I need to get in really early after the first of the year because I need a financial statement at the bank and I have no idea where I am. Well, ok, we'll get you in just as early as we can. Now, occasionally, those people will call to and say, "you know, I made this appointment for February 2nd, could we do the 7th?" And then the same person will come in on the 7th and say, "now, it's almost all done, it's almost all totaled, ok?" If you're going to have a good management information system, it should be timely and doing your work six months after the fact just in time for the tax man, is not part of a good management information system. The information should be in a form suitable for analysis. When we turn the farm business operations over to my son, we went into another business, a John Deer dealership and started out with what was a really good little accounting system. And then, because Deer wanted everybody on their deer system, and knowing that Grain Pain is the best around, that was an editorial, we switched to the John Deer system. Their parts and service is good. Their financial management information system was not very good at all. And it prints out tons of data we can't use and we can't get the data that we need. I was working the other day at the office and I'm going to print out and see what all these JD Mars things on here are. They were all kind of coded, so I wasn't sure what it would be until it printed out, So I just thought, oh, I'm going to be here awhile, I'm just going to press all. And I did. I went through more than, I had to change the paper, and you know, I spent it was almost a full box of pensay computer paper. I had to put new paper in. This whole big stack of things. Do I know what's in there? Did I look? And I thought, ah, nah, nah, nah. Not in a usable form. If it's not in a usable form for you, it's no good. I've had people who have trouble getting their farm records together. Really have trouble getting it together and say, "now, we're going to get a computer". I say, "ok, that's wonderful, that's great". "We're going to get a computer. Now, we want to be able to keep our records so that we know the profit per field. So that we know, you know, how much fertilizer we've spent per field. so that we know what our cost of production, etc. And I said, "And you're going to get that how?" "We're going to get a computer." "Ok, fine". Have you ever heard, garbage in, garbage out? The computer is not going to tell you profitability per acre if you don't tell it how much you spend on each acre. I mean, there are some things it can do, but there are some things that it's got to have a few pieces of information in order to work with. So, if you're not into gathering the data that you need to put into that system so that you can get these fantastic sophisticated results, and some folks are, and the results are great, then, you just might be better off with a hand kept general ledger that you do routinely write in every day, or every week, and that you understand and that you can go back and pull the information from. Understand, it's not necessarily computer good pencil bag. In fact, I did hear a person the other day and I thought it was rather cute. You heard about the Y2K problem, you know, the fact that we're all doomed, etc., etc. Apparently people are even building some kind of bomb shelters or something, in anticipation of other people wanting to get their food. But at any rate, Phil is standing here and he's had a lead pencil in his hand and he says, "this is my Y2K backup system. True, very, very true. The information should also be gathered in such a way that you have confidence in the system. Ok? If you take soil test and you purchase your fertilizer on the basis of those soil tests, and then so that you're putting different amounts where you should have different amounts, but when you put the information into your computer system, you say ok, we're planting 680 acres and we used so much fertilizer, so we're going to divide by 680 acres and that's what the fertilizer cost us. Well, what's the integrity of that figure of fertilizer cost per acre? It was a self-fulfilling prophecy, right? That's not gonna tell you that field A is more profitable or less profitable that field B. Because you by putting the same dollar figure on field A as field B for your fertilizer, you've already said, ok, it's the same amount of fertilizer we spent on each when, in fact, it's just the results may have been different. Elizabeth will talk a little bit more about that when she gets into the global positioning information.

This system must provide a mechanism for change. You have to be able to fine tune it if it's giving you information that's not what you need. You need to be able to go into the system whether it's hand, whatever it might be, and fix it, and change it. I had a client 2 years ago, construction company. Had a beautiful set of hand journals. Really, really nice. Mama had been keeping those hand journals for the last 25 years. There was an easier way. She spent so much time writing in those hand journals, but she would not change one thing about those journals. And there were some things she could have, she said, I didn't have to go to a full computer system, she could have put them on a spreadsheet, on excel or something like that and made it so much easier for herself. They could have written their checks by computer. There were some things that would have helped. She would not change one thing about that system. Now, we've got to be willing to change our system. We've got to be willing to let old ideas go and adopt new ones. And even if we designed a form and we really liked that form. If something else would be better, then throw it out and get something that, run parallel for a while, though. You know, sometimes the new isn't necessarily all that much better than the old, so you don't want to throw it out too far. The system should provide for control so that you maintain the integrity of the system and the resulting data. What does that mean? Ok, we reconciled bank statements, ok? The bank says that we have $682 more than what I think we have, but since it's more, I'll just adjust, ok? Ok. How about next month when it's $720 less, am I just gonna adjust? Ok. So the point is, maintain the integrity of the system, and understand although you don't want to spend time chasing things that are just absolutely immaterial, but understand that a $2.50 mistake or $2.50 amount that you're off could well be masking $1,000 off in one direction and $1,002.50 off in the other direction. So, you want to maintain some control on the integrity of your system as well.

What do you need the information for? Well, you need the information from internal reporting, for day-to-day decision making. That's why it's kind of handy to have a system that you keep up to date. It's kind of hard to do day-to-day decision making based on information that applies to 2 years ago. So, you want to keep the system up to date. What are those day-to-day things? Marketing decisions. You know, cost of production. We have a lady in the back of the group who is a marketing person, she does some marketing seminars. And I'm sure that one of the things that she emphasizes is you must know your cost of production. So that you know when you've covered your cost of production, so you'll when to, as they say, pull the plug. And let's begin to sell, let's not sell it all at once. But, the point is, if you don't know your cost of production, then you don't know at what point you're making a profitable decision. Purchasing. If you don't know what you paid for total chemical inputs last year, if you don't know what the breakdown was on the chemical inputs, if you don't know how much you paid for an hydras per unit, then how are you going to know if you're getting a good deal this year when you negotiate a price. So you need that information for day-to-day decision making. How about crop and enterprise mix. We do corn, soybeans and wheat. We're locked in to some extent by rotation, but it's not a strict rotation, so we can follow corn with corn. We can follow beans with beans. We never follow beans with beans with beans because of a little fellow called a sysnematos and not a good thing to get in your fields. But, we do have some choice as to make so that's why when you hear the market reports and you find that soybeans are $5.25 a bushel, and we can't make money at $5.25 a bushel, then maybe we need to consider corn. Maybe we need to look at maybe a little heavier corn planting, a little lighter soybean, or maybe we need to go the other way around. So, that information is necessary for calculating which crops we're going to plant and what that enterprise mix is going to be fine tuned within each year's operation.

Internal reporting for medium term and long term. In there's things like your machinery replacement budget. Now, I do know, I've been married to a farmer for a long time and even before he owned the candy store, I do know that he liked to go look at the shiny equipment. In fact, I'll tell you what he really liked to do was to bargain with the dealer. And I get such a kick out of it now, 'cause he's in the other side. And he's got all these clever farmers coming in and bargaining with him and trying to get him to come down on the price and it's kind of interesting to watch. But, I think he is a good dealer, primarily because he's been there. He's been there. He knows that, he knows his customer's operations well enough to know that he would not sell a piece of equipment to a farmer that was not appropriate for that farmer. Nor do we fix up, paint up, clean up over messes and send them out into the farmer's fields, because we know, we're gonna get him right back. And I think you'll find that at most of the dealerships. But, machinery replacement budget. Most farmers like to go out on the lot and look at, maybe, do what they think might be an impulse purchase, but really, in our heads, we probably have a 5 year machinery replacement budget. We ought to have that documented, we need to have it on paper. You want to not have to come up replacing, like as grain farmers, you don't want to have to come up replacing a combine and a major size tractor in the same year. Not a good thing. And, of course, in this country, there's another reason you don't want to do that. It's because we have a $200,000 limit on what we call the expensing election, and it you spend more than $200,000 in one year on equipment, then that starts dating into your expensing election. Now, you probably have some sort of constraints similar to that, maybe in Australia and Canada as well. So, you don't want to have to spend too much on machinery in one year. So if you know what's coming down the pipe and then you know when you can take advantage of maybe some good deals that might be available as well.

A plan for paying down debt. We all know that you need a cash flow probably based on a monthly cash flow scenario in and out. We keep a cash flow scenario 12 months rolling cash flow, as you drop one month off the front, you add another on to the back, so that we're always looking at 12 months. But you also should have a medium and a long range cash flow plan as well. So that you are scheduled to pay off debt so that you know at least there's a light at the end of the tunnel and that at some point and time, at least some of these debts are gonna be gone. Maybe replaced by some other debts but you know you can see maybe that you're getting somewhere.

Internal reporting for special decisions. Should you lease or should you buy? Well, that's just not something that can be handled, it's not an off the rack decision. It's not something that you can go into your accountant and say, "Well, should I leave this piece of equipment, or should I buy it?" There is so much that needs to be done to go into that. Your tax picture is one of them. The liquidity on your balance sheet is another. And there are things that need to be considered. You need this information for your internal reporting. Internal to yourself, to decide, whether leasing or purchasing a piece of equipment, a harvest store silo, or whatever, may fit into your plan.

External reporting. See, I put the external last. I know that most people put the external first because that's the constraint. You know, no matter what else, you gotta find your tax return. Ok? Well now, I do have some clients that don't look at it that way. I have one client who I call him my 3 year client. First time I ever saw this fellow, he came in with 3 years of tax returns due. We caught him up, filed his returns, and frankly I thought I must have charged him too much because he didn't come back the next year. And he didn't come back the next year. The next year he shows up, 3 years. He was a farmer. Well, at the end of this 3rd year that he had the last time he came, he has also gone into trucking and I thought, well, we didn't hear from him the next year and I thought, ok, now he's not going to back, he's probably moved or whatever. My secretary came into the office, something like April 5th, and for the folks who are not U.S. citizens, April 15th is when our taxes are due, although farmers are supposed to be in by March1st, but he never paid any attention to that either. And my secretary said, "so and so's on the phone, but I can't find him in the book anywhere and he says he's a client". And I said, "he's our 3 year client". She said, "what do you mean?" I said, "he shows up every 3 years, this is the 3rd year and he's back again". So, I guess there are some folks who really don't follow that 3 year constraint in needing to file a tax return. But who do you do external reporting for? You do it for banks, you do it for credit grantors, and if you're in a situation maybe with a family farm where you have some off farm errors, you know maybe it's an inheritance type situation or maybe it's an outside capital type situation. We're seeing more and more of that happening. Then you've got some so-called external reporting to stockholders as well. Or to other parties with interest. You might have some external reporting to landlords and we have a lot of renting going on in our area. And whether the landlord is a cash basis rent or whether it's a share basis, the landlord owns the land and deserves a report as to what you're getting as the tenant off of that land. So that would be external reporting as well.

And then the final one that I have down is recorded to good old Uncle Sam or whoever your favorite uncle happens to be is reporting to the government and paying our taxes. Also, another item there which is relatively recent, is complying with regulations. Things like keeping track of our chemical crop protecting products. How we've used them and what fields we've used them on and all that sort of thing. I think in most states, at least, we don't have to report and send in forms, but we do have to have them there just in case they want to look at them. So, I think that would be considered external reporting, as well.

Any questions at this point and time? And I did want to say if you've got some comments to make or comments and questions, please. It's not just questions, if you've got comments or some things you want to add, please feel free to.

Well, I should not put that as money. But I frankly would think the landlord deserves to know what your yield is. Deserves to know what your yield is and deserves to know what you've done in terms of fertilizer application. Deserves to know how you're treating the land and you know, that's a 2-way thing. Because so many of our leases have a vague clause, something like, Martha, what would it be, following good farm management practices or something like that? Well, that's a wide open barn door. You know, if the landlord gets mad at you or you get mad at the landlord. But, if you're providing the landlord with some sort of a report and not necessarily dollars, but if you're providing the cash/lease landlord with maybe a production report and with a land treatment report, than that goes a long way toward keeping good landlord/tenant relations. And you know something else that does? If you as a tenant, are on a good relationship with your landlord and your landlord is a retired gentleman, and you've been providing good information and you've been stopping by to say hi, and you've been sending a Christmas card, when the gentleman passes away, do you really think the widow's gonna put that land up for bids. Yeah, I can think of some who will, but, most of them are gonna say, hey, that nice farm family has been with us for 5 years and I trust them and I'm gonna leave the land theirs. So, there are some good things to say for landlord/tenant relationships. Martha?

That's great, that is great. That's wonderful.

My husband and I were in the same graduating class. We were not high school sweethearts, we were best friends, but some of the fellows that he hung around with, in fact, most of the fellows that he hung around with, were farmers. It was a small town high school, a town of about 3,000 people, 3,500 now. But they had a saying, whenever somebody did something that was particularly clever, or that took some figuring out to it and hey, that's a good idea. Your standard response was "Now, that's thinking like a farmer." So that's something, whenever someone does something clever, that goes through my mind, now that's thinking like a farmer. So, farmers do some pretty good thinking sometimes.

The heart of any system is its database. And that's all the information, hopefully centralized, it's an integrated collection of the organization's data resources. Now, what are the organization's data resources? What are the sources of information. And that's where I said sometimes we tend to think that the sources of information are just what comes off of our computer or out of our general ledger. But that's not true. There are external sources of information and there are internal sources of information. What kind of external sources of information do we have that are part of our farm management information system? Newspapers and magazines. The information that we get every day or every week. One of the best sources of information that I find because it's such a quick read, is the front page of the Wall Street Journal. Now, we subscribe to the Wall Street Journal in my office and I can tell you that probably only one day a week does it really get opened and read. But, I can tell you that the front page gets read every day. The way it is set, for one thing it's easy to read. The way the columns are set up you have some hard news and there's one column that has a little bit softer news, and then you have the little shorts in two columns over from the side. And it gives you just a real brief synopsis of some of the things that are inside. So you can scan that in maybe 10 minutes and know if there's anything in there that you need to read. For instance, and I think I have seen it already, but I believe there was an article about women and farm marketing in the Wall Street Journal maybe 3 or 4 months ago. And I know I had already seen it and I cut it out. Here it comes over my fax machine from the President of American Agriwomen with a note, thought you might be interested in this. But, the Wall Street Journal is a good source. Magazines, not just our farm magazines. Now, our farm magazines are great, but we need to know what other people are thinking as well. I'm not saying that you have to take time to read Newsweek, Time, Forbes, Fortune, etc., etc. every week. Who has the time? But to have a nodding acquaintance with at least one major magazine every week that it not farm oriented. Now, I do have a friend that will remain nameless who told me that she switches from Newsweek to U.S. News and World Report to Time routinely based on the latest card that she gets in the mail. She takes advantage of that first little cheapie they give you and then she doesn't renew, she takes one of the others. She does their little cheapie deal. It expires, she takes one of the others. Hey, makes a lot of sense to me. It also passes around, so you don't get just one set of columnists opinions and that sort of thing.

News Broadcasts. Now, we know, take the news with a grain of salt, right? But there is so much available to us now. You know what bias various networks have? You know that some are going to be more liberal, you know that some are going to be more conservative, you know that if you listen to the news, for instance, on Trinity Broadcasting, there's a fellow in there, and his name escapes me, but you'd know who I meant if I could remember his name, who has kind of a news type program. Well, you know, when you watch that news, it's going to be a little more conservative than news that you might get say on CNN. So you need to be a knowledgeable consumer on the information that you get from TV and radio. Someone mentioned the other day that on national public radio, that their information is always so very, very liberal. Someone else said, oh, no, no, that's not true at all, it just depends on what columnists is speaking. So the thing is, you're going to get all this information, you've got to be able to sort it out and deal with it, but bring what you need into your business management information system. When we built our house 22 years ago, into the farm office we had a set of shelving built, specifically to keep magazines so that you could keep, and I believe there are slots for 28 magazines. One was sized specifically to hold the old Farmwise News. Does anybody remember the old Farmwise News? Remember when it was a biggy, big? One of those slots was specifically designed to hold the Farmwise News and then they changed the size, but the point is, the idea was that we could keep a year of monthly magazines and 12 weeks of weekly magazines so that when you said, "Gee, I saw an article it applies to this, you can go get it." I'm not saying that you have to cut all the articles out and keep them and file them and all this kind of thing, because magazines get old, but information, information. What's the greatest source of information now? Availability just like that? The Internet. How did we ever exist without the Internet. When I said that the other day, I was reminded of my daughter who is now a senior in college when we were furnishing her apartment up in Champaign. We were buying things like ironing boards and toasters and I was going to say coffee makers, but no, no, she's part of the non-coffee generation, I guess. But the comment she made was, "Golly, where did people get all this stuff before Walmart?" So I kind of look at that with, "Golly, where did I get all this information before the Internet?" I was working on something the other night about, in fact, we do have a few handouts about that if anyone's interested, in the new farm account, FARRM, Farm and Ranch Risk Management Account, which is proposed both in the Senate and the House in this country. It was something like 2:00 a.m. and if you're farm women you know that sometimes its the bookwork that gets done in the middle of the night because there's no other time to get it done. I was working on and I was reading these things and I'm thinking, now, I wonder how social security fits into this picture. Well, I just turned around, got on the Internet, logged into Thomas, which is the legislative webpage and pulled both the House and the Senate versions of those two bills off and read them. And I got an answer to my question. Ten years ago to have needed an answer to that question in the middle of the night and to have been able to get it in 5 minutes, it's just absolutely amazing. So there's a lot of information on Internet, but understand, in terms of regulation, there is no one who is really guarding the accuracy of the information that you pull off the Internet. So, talk about a grain of salt with some of the things that we get from the standard media, get a whole box of Martins when you're pulling stuff off the Internet, because you don't know it's coming from and you don't know what their agenda may be. But it is a source for information and a good source for information.

Private marketing and production reports. Another source of information.

Government marketing reports. Anybody remember the movie Trading Places? It was really not true, it couldn't have been true. Because in Trading Places, it dealt with commodity markets and there were racial overtones as well but the staying part came about on the floor of a board of trade when the orange juice report was released and trading went wild. Well, when that movie was made, orange juice reports were not released while trading was open. Now, since we have trading at so many different times during the day, then that can be the case, but the reports were not released when the market was open. But those market reports certainly used to be, how are you going to get 'em. Well, you might wait until Farm Magazine came out so you could get that market information, you could find out what USDA was predicting in terms of total production. Now, how do you get it? You can get it off the Internet immediately. You can call your marketing service, or they flash it onto your DTN unit or your form data system. In this country, we have Farm Data or DTN which is a system that gives us like commodity marketing prices all day long on a 10 minute delay. Is there something like that available in Australia, as well? So you can have them up to date coming into your home. Yeah, that's been one of the great things for farmers in this country was to have the commodity prices coming right into their home whenever they need that information. It's been very useful. Reports are proposed in pending legislation. Useful to us for many reasons, useful to us because how it's going to impact our businesses immediately, useful to us because if we find out that the government's going to do something that will severely impact us, then we can maybe nip it in the bud and get out there and do some organizing, and get some letters written, get some phone calls made, and possibly get the thing turned around.

Networks. And you heard this morning about the Farm Women's Networks, all of the wonderful networks that we have for information and there are other networks as well, there are networks within states and networks within counties of farmers and farm women who call each other and let them know what's going on. That's a source of information and then finally, the final source of information, the one that is universal and universally wrong, the coffee shop. Yes, the coffee shop. You have those, I'm sure, in Italy. I know you've got them in Canada, you've got them in Australia, or maybe it's tea shops in Australia? No, it's coffee shops too. That's where the information is massaged. That's where 120 bushels an acre of corn. Each of those marketing services was saved, so that we could get the benefit of those but without putting all of our eggs in one basket in terms of which marketing services we were going to follow. Then, it also had individual internal information as well. How many bushels we had produced last year of the crop. How many were sold, how many were yet unpriced. And the projected bushels for the current year, how many of those bushels were already priced, and at what price, and our cost of production. And, then, the final thing, was the results. What are you going to do this week based on all of this information and what's the rationale behind it. And the rationale, it may have been no action this week. Oh, one other thing that's on there too, it's the case flow needs. You know what, cash flow needs are coming up in the next month, that you need. So you pull it all together in one place and you can use it to make a decision. And that's the reason you gather all this data, to make a decision. And there's a place that you write, no decision this week, we're not selling anything this week, or we're going to sell, maybe we're going to price 5,000 bushel of beans, assuming that the price hits x number of dollars. If he doesn't hit that price, we're not going to price it this week. Maybe it's a bad decision, but, we all participated in making that decision and it's down on paper that it's not my fault, it's not your fault, we talked about it and this is what we decided to do. It kind of helped with family harmony as well.

Statistical comparisons with pier groups. On that one we're talking about some of the services where you maybe fill out forms, I think Cattlefax used to be that way, do we have anyone here who participates in Cattlefax, used to fill our forms, and those would go in and then they would massage your information along with lots of other folks' information and then send you out something that says how you compare. In Illinois, they do that, but it takes them so long to get all the information in because they gather it up for their cooperating farmers and this is for the Illinois Farm Business Farm Management System that gathered up from their cooperating farmers, but they gather it through their field men as their field men visit the farmers after the end of the year working on their taxes, and that's when it all comes in. So that information, like for 1997 year, would not be available until the beginning of 1999 by the time it all got in and got turned around and all. And it is useful. I don't mean that it's not useful, but in terms of timeliness, could leave a little bit to the desired. Any questions along those lines, or anything you want to mention before we get into computer technology. Anything that you want to bring up? Ok. Just please, feel free, as I said to, jump in, anytime you want to say something, or raise your head, hands, jump up and down, whatever.

I'm going to now call on Elizabeth. Elizabeth is my daughter, so I'm probably just a little bit prejudiced in terms of her ability and information. But she's a senior at University of Illinois, her major is Technical Systems Management in the College of Agriculture, and she's going to talk with us about global positioning. To give you a little bit of her credibility, I was ready to come early Sunday morning because our original reservations were for Sunday morning at 7:00. We did not come until Monday morning at 7:00 because Liz was combining wheat. So, she works on the farm as well and I think she does a really good job. So, Liz?

Well, thank you very much, and thanks for the applause, combining wheat is hard work, as we all know. Global positioning system is really the latest in farm management. It's abbreviated GPS and what it is, it's space based radio positioning system that provides 24-hour 3-D positions, velocity time information. Now what is that? Basically, it's satellites sent up into space, that using at least 4 of these satellites, can pinpoint your specific position on the surface of the earth or slightly above it. Now, the overall system is called GPS but below that, there are 2 different systems that were sent up by 2 different governments. The United States government sent up 9 satellites, which is called our Nastar System. Now, these 9 satellites are orbiting around the earth and control the United States government. Now, the Russians also sent up, they sent up 12 satellites. Their system is known as Glownas. And there are some problems with due to the situation in their country. Several of the satellites have gone into disrepair. But the satellites do work together. When the system is trying to locate a spot on the earth, it needs at least 4 satellites as positioning. So, with the Russian system and the United States system working in connection, we can pinpoint a spot very easily. Now the satellites, like I said, help position a spot on the earth. We did have some problems when these were originally sent out and the fact that the United States government was scrambling the system. Scrambling the signals that were coming down from earth, so where you could only get an accuracy of about 400 feet. Now what good is 400 feet here or there on either side? Now, they were doing this basically for expense, you know, government defense system, so you couldn't pinpoint the President's car going down somewhere and send down a bomb to hit it. Well, now they've developed a thing called differential correction which adjusts for the scrambled signal that the government sends into it. What that does is, the signal is sent down from the satellite and then it's bounced around a bunch of different little stations on the earth, and then, now it can a spot can be pinpointed within 2 feet, which is of great help. Now, what does this mean to agriculture? Well, by implementing GPS on the farms, you'll be able to increase your yields and lower your production costs. Now, I am a little biased, as she said, we do have a John Deer Dealership, so basically, what I know about is John Deer System. Now, there are several other implement companies who aren't incorporating GPS into their agricultural products and it's also being used for aerial spraying and things like that in Kansas, but what I mostly know about is John Deer's Green Star, Seed Star and Spray Star systems.

Now, the Green Star system is the system that is incorporated into the combines. And what this does, is basically it assigns a latitude and a longitude to a specific area of the field, so when you're driving the combine down the field, and the combine calculates your yield and your moisture content and everything of that nature, there's a satellite positioned on the top of your combine which is relating to the satellites up in the air and it's saying, ok, you've got this moisture content and this yield and this particular spot of your field. So, whereas before, all you could do was get your yields as, well, this is the yield basically of my entire field, it produced this yield. Now, you'll be able to say, this particular spot in the field yielded this, whereas this particular spot yielded this. And, in addition to this, an extension of how this process works, is you can flag different areas in the field, use a computerized flag. Now, the system will give you, in the computer you can program in, the mass of all your fields and it reads those, and then you can say you have a waterway running through the middle of your field; you can flag that area. Or you have washouts, or you have a particular weed problem in an area of your field, or you happen to plant a different variety or a different rate in an area of your field. You can put a computerized flag on that, and then as your combining through the field, the signals and being sent back and back, and you get to the spot that's flagged, and the computer says, oh, ok, so this is the flagged area, we go ahead and combine that, when you're done combining it, it calculates those yields and that way you can tell that this particular flag area around the waterway yielded this much and I know that I need to increase or decrease fertilizer or whatnot in that area. It works really well, it can calculate the area inside what has been flagged and it really produces great pronounce. And what this does is, with your weeds and your planting variations, it can help you understand or figure out, ok, maybe I'm planting too much, it's not doing any good to plant this particular rate here, or spray this much fertilizer here and you can lower your cost that way and get more specific inside your individual field on what needs to be put where. Now, that's Green Star, which is the combine system.

Seed Star is John Deer's version for the planter. Now, Seed Star is not available yet, its' said to be available in 1999 and basically what it's going to allow you to do is it's going to have the same types of satellite communication with your planter, where as before, when you were planting in the field and say you wanted to switch the rate that was coming out 'cause you were going through a wet spot or something of that nature, you get out of the tractor, you deal with the monitors, and have to do everything like that. Well, when you program a flagged area, I want this particular rate to come here, to be planted in this area. You're going down the field, the satellite says, ok, this is a flagged area, we only want this rate planted here. You don't have to press any buttons, you don't have to do anything, the computer automatically changes the amount of seed that is being planted there. And it's going to hopefully work very well in cutting down in a lot of your seed cost. Now, Spray Star is still definitely in the works, they're not sure at all when they're going to have it done. And it works basically the same as Seed Star in helping you vary your fertilizer and pesticide applications or any kind of spraying you need to do in the same way that Seed Star does. You can flag an area that maybe has a particular heavy week problem for you, so as you're going through that area, it automatically knows that you need to spray more there. Even if you've worked up the area, and you can't see the weeds there, but traditionally there's been a major week problem there and you're pretty sure it's going to come back. You flag the area, you don't have to say you have someone hired for you who doesn't know exactly where that spot is. He's running the sprayer. Well, that area's flagged, so the sprayer itself automatically knows to spray heavier there. You don't have to worry about giving the specific directions as to this spot in the middle of the field. It's going to be really hard for someone to find it if it's worked up. Yes?

Flagging is basically like, the computer itself, it will generate a map of your field. And flagging would be, say, going into your computer system and selecting a particular area in the middle of the map on your computer and flagging that area saying, this is an area that I'm having such and such a problem with and I need to adjust it to this. So it's a computerized flag. Ok? And as far as purchasing the systems, basically what I know about is the John Deer System. And the combines since 1995 have come with the coles cutout in the combine for the application of the Green Star System. Now, this was even before they were completely finished developing it and it wasn't necessarily still in the testing stage for the most part, but they were preparing their equipment to accept it. And now you can, just, you would talk to your local dealer and I'm sure Case and some of the other implement dealers have that option available too. So, you could just go ahead and order it from your dealership and they should be able to explain in greater detail about it.

[Questions, not audible] I'm not positive on that. I honestly don't know, I'm sorry, I should have checked on that one. I know that you've got little calculators almost that are in the computer that you would plug in, that you can then plug into your computer and when you get Seed Star and Spray Star, you can additionally move that individually, and I'm pretty sure those are running only about $1,000 for that unit. Now as far as the service and all that kind of stuff, I honestly don't know, I'm sorry. I don't think it's going to be quite that expensive, because it's a relatively free working system, like the Internet. At the moment, in Kansas, there's a lot of people using the GPA system to spray their fields because they were having problems with seeing where they'd been and it helps the plants get an even spraydown. Now, as far as farmers using it in harvest, I would say probably about 5% tops are using it now. Like I said, it still very much in the works, it's just coming out, but it's going to be a great help once everything, you know. Like I said, they don't have Seed Star and Spray Star out yet. They're still developing, this is still so new and we don't even know for the most part there could be, God only knows how much more things that this can help us with in the future.

Yes, you can take the maps off. What the Green Star does right now, you set the area of your field and then as you go through, it comes up with the yield map. And then you could take the system and overlay that over a contour map, and once the planting gets done, when you're planting, when they get Seed Star done you'll be able to overlay that over the rate you planted and that kind of thing. Like I said, it's still very much in the works, in the production stage.

Yeah, getting covered with pesticides and that kind of thing. Well, I'm sorry I don't have more information about the cost for you. I might suggest that you could check maybe, I know John Deer's website has a lot of information and I'm sure whatever implement. I'm sorry, I don't really know that, but you might be able to check around, as I said, on the web, there's a whole internet thing. 'Cause you'll save money in your fertilizer application, your seed application and everything. Thank you.

Thanks. We haven't sold one yet by the way. We have not sold one yet by the way. But my son really wants it and she does too. So, I'm sure that's coming.

The other things that I have on the list as far as to talk about this morning are farm record keeping systems, general programs as a part of whatever kind of system that you might be using, and the Y2K problem and I asked Elizabeth to stay up here with me because in some of these areas, I'm thinking, she just may have a little bit more information than I might. She's closer to academia and that's where the funds are. And we're seeing more research and things there.

So, can I ask you all which would you rather talk, you want to talk about Y2K. Are you ready? You ready? If somebody wants to talk about Y2K? Anybody not know what Y2K is?

Y2K, you often see it called the Y2K Problem. What that is, is years ago, when programmers were just getting involved in programming the computers, in order to save space, rather than programming the date as 1991, they used 91. Ok? No problem back then. And that was when, remember when, anybody ever use an old Apple 2. Yeah. That's what she started on, an Apple 2. Then lightning struck and we advanced to an Apple 2.E. And those things just had, you just used your disk in and out, they didn't even have a hard drive and I can remember when we got the first 10 meg hard drive. Golly, 10 megs! And then we added a thing to it so that we could have 20 megs. Wow, yeah. And now, when I get down to 20 megs still left on my hard drive, it's like, hey, we got a problem here. But, anyways, those early days they were trying to save space. Well, the problem is now those computers, those programs, when we get to the year 2000, they're only going to look at the last 2 digits and going to read those last 2 digits as 1900.

Now, what does that mean to you? I don't even use a computer, so I don't care, why would I care? Well, there are so many things that have computer chips embedded in them that you don't even think about. The first thing you want to do is check out your own computer to be sure that number 1, the hardware is compliant, and I know that all along, I've just been thinking in terms of software. But we did have a lady in our group who had a telephone call from her daughter who said, Mom, your pentium is non compliant and we've got to do something with it. And she has a pentium, and for those of you who are familiar with computers, I would have thought that anyone who had a pentium was not going to have a problem. And I'm getting a look from my president, Carol Ann, President of American Agriwomen, who is probably thinking, well, I thought pentiums would be compliant. Of course, now, Carol Ann is a math user. Yeah. But, apparently, this particular pentium was one the early pentiums and is not Y2K compliant. So, it's not only the software, apparently it can be a problem in the hardware as well, and I'm out of my depth when I start talking about that type of thing. Your software, if you're using software that you bought years ago, and, we're farmers, if it works, why fix it. So if you bought some software in 1985 and it's still working, well why would you want to get anything new, it still works. Chances are, it's probably not going to be Y2K compliant and it's not going to recognize the year 2000.

What kinds of things can happen? I ran a scenario the other day that had to do with a person in the city coming into their office on January the 2nd. Had a hard time getting in because the sprinkler system had gone off and there was a sheet of ice all around the building. Had to walk up six flights 'cause the elevators didn't work. Wondered why all morning there were no telephone calls from clients, until he found out that the telephone system had gone haywire and it was sending calls from clients over to a recorded message that said there was no one in the office and to call back tomorrow. I'm real concerned about how this is going to hit farmers, farmers who maybe have computerized breeding records, who have as a part of their rationing system a computer system that automatically mixed the rations in the barn for cattle and for hogs. There are just so many areas that we haven't even looked at and so many of these computers were programmed using Cobalt, and I don't even remember what Cobalt stands for. It's a language, although it's still around, a lot of people don't program in Cobalt anymore. And there are not a lot of programmers left who know Cobalt because they all retired. They're pulling these people back in because they have to fix these old programs that were written in Cobalt. We've gotten several letters from suppliers asking us to please be sure that our computers are Y2K compliant. With American Agriwomen we do a fly in to Washington, D.C. in the spring of every year and I know that those of you who are with Y, you do something very similar in your board meeting into Washington every year. Well, when we set the program this year, I had asked one of the speakers to address the Y2K problem. I asked that the people at the CFTC have one speaker who talked about Y2K. Do you know, that of the agencies that we visited, everybody but the EPA brought up the Y2K problem. Those people are scared. Those people are concerned because they think they're ok, but they have to wonder, is everybody else ok. And, of course, several of them brought up in this country we may be ok, but what about all of our trading partners, and how seriously is everyone around the world taking this potential problem. Think of the telephone systems. Do you really want to be up in a plane at midnight on December 31, 1999? I don't think I do. If you saw USA Today yesterday or the day before, there's an article in there, and it kind of made me think about my youth, like in 1955, when people were building bomb shelters? Wednesday's USA today, there's an article about the lady building the, planting the garden. And they're selling $7,000 domes over the internet that you can use because they're concerned that there won't be enough food and people are going to come trying to crash in and converting their money to gold. Liquidating all their stocks and I can understand it's a concern. Exactly, the money in the bank, your ATM card getting it out, and then we have one bank in our area which I'm not going to name, but they have a real hard problem keeping anything straight anyway. And what this may do to them, I don't know. Yeah, they'll be a run on generators. Yeah, that is true and that does complicate it even more. So many things, you might think, oh, that's mechanical, but there's one little electronic component, one little electronic step in the system that is going to be a problem. I saw some statistics about how compliant various government departments were and I don't recall that USDA was shown, that it said how compliant they were, although the lady who addressed us, I had a lot of confidence in, because I think that she was very competent, and I think she's going to get them taken care of. I was a little concerned when I saw the Defense Department was 29% compliant. I really don't want any of those rockets to go off. So, I'd really prefer for them to get their act together if anybody's going to get their act together. And then I'm a little concerned about the IRS, too, let me tell you a story there. I have a client whose fiscal year ends at the end of February, which means that his tax return is due May 15th. This year May 15th fell on a Friday. For the benefit of those of you who are not from the U.S., we have something called electronic deposit of taxes in this country, and for the last 2 years, I guess, the IRS has put out the word the eventually they want everybody to deposit their taxes electronically. Like, when the employer withholds from the employee, well the way it is right now, if it's a small amount we can send it in. Or we have these little coupons that we take to the bank along with the check and deposit it at the bank. Well, they don't like that, they would like for it to all be done electronically. So they started phasing in that employers above a certain number of employees would have to make their deposits electronically. They were at the point where anyone who had a payroll over $50,000 would have to deposit electronically. I believe, it was originally by July 1st of 1997, then it became January 1st of 1998, then it was July 1st of 1998, and it's now sometime in 1999. I'm not sure it's every going to happen. However, there are folks who are already depositing electronically and this particular client was one of them. The rule says that once you have begun to deposit electronically, then all of your taxes must be deposited electronically. So because this client was depositing payroll taxes electronically, the additional amount that he owed above his estimates, on his tax return had to be deposited electronically. Well, the tax return is due May 15th, and you all know that because you're familiar with the March 1 deadline and the April 15th deadline, that if you write your check and get your envelope postmarked properly, that it's going to count for the day that you mail it. You're also familiar with taking a deposit to the bank and using the little coupon and if you get there before the bank has changed its day, because most banks don't change their day at midnight, they change it like at two in the afternoon, it's tomorrow, but if you get there before it's tomorrow, then it counts for today. So you could go to the bank and you could file it that way. My client's secretary called at 9 o'clock in the morning, she said, "Trenna, I've got a real problem". She said, "I am trying to make this deposit to electronically deposit these taxes and it was a substantial amount, it keeps telling me that it's going to be credited and or May 18th, which was Monday. I said, "But it's due today, and we're looking at a major penalty if it's not in today." She said, "I don't know what to do", she said, "it keeps telling me that I am going to be credited as of May 18th". Well, I spent something like 3 1/2 hours on the phone with the IRS going from department to department to department including the so-called tax preparer's hotline, and my answer finally ended up being, "Well, when you get the penalty notice, you can appeal it." That was the answer. Here is the situation. The electronic deposit system is set up to no mater when during the day you make a deposit, and, in fact, someone told me I believe that if you even make it after 3 o'clock the preceding day, it does not count until the next business day. So my client trying to make this deposit shortly after 8 o'clock on the morning of the 15th, had it actually credited on the following Sunday, and that's the way the system works. My argument with the IRS was, "Yeah, but if my client wrote a check and put it in an envelope and mailed it to you today, it'd be ok and there'd be no penalty." "Right, but your client can't do that, because your client is an electronic depositor." "Well, if my client took his little slip to the bank now, the funds are already there for you to take, he's already transferred the funds into the account, there waiting for you to hit his account, it's there. If he took his little slip in, it'd count for today." "Yeah, but he can't do that because he's an electronic depositor." So, I'm sorry, but if they can't make that work, I'm just real concerned. I mean, that is a fairly straight forward thing and I'm real concerned if that can't work then, what are they going to do with Y2K? And, I don't know. Comments, questions or anything else you might want to have on Y2K?

How about farm record keeping systems? Does anybody have a good farm record keeping system that they like to use, computer or otherwise, that you think is so great you'd like everybody to know about? Did you raise your hand? You use Quicken. Lot's of folks use Quicken. And I've heard accountants say, Quicken? That's no good. And I say, it beats the shoe box, and if you're going to keep the records, it writes your checks, it totals them and organizes them, it is better than not having a system, and it's better than having a sophisticated system that you're not using 'cause you don't understand it or because it's got so many bells and whistles that you get frustrated trying to make come out of it what you need to come out. Yeah, Quicken is good and if you want a get a little bit more sophisticated, there's a program called Quickbooks, which produces a nice set of financial statements, it produces a trial balance as well. And it's good, and you can change the titles of the accounts. You can make it look like a farm system. And there a lot of truly farm systems out there available too. FDS, FMS, that are designed farmworks. That are designed for farms. They're a little more expensive. Some work well. I don't promote any of them. And, frankly what we use is not a farm system at all. We use a no bells and whistles general ledger accounting system. It's called BPI. It's from the AkPak people. Don't confuse that with a scam that came up about 12 years ago that was called AgPak, and it was a scam. So, this is something entirely different. These are the AkPak people. This system, the old Apple II, back in, I believe, in 1982, when we got our first computer, the old Apple II. I wanted a general ledger system and I went to the store which was a computer store. Back then that's the only place you could buy software and I bought for $400 this BPI system, which consisted of 4 floppy disks, the old floppys, ok? And that's what we started keeping our computer records on. Through the years, that's been upgraded. We now use it an IBM. The thing now costs $200. And it's so much better than it used to be, but we are still basically using the same system. It's a good debit credit accountant friendly audit trail system and that's what I like. You know, accountants are kinda funny about that, we want to be able to follow it right back through the system, and that allows me to do that. I would say be sure that you back up your system all the time. Very, very important and I know, it's kind of like, no, I shouldn't say it's like putting on your seat belt, because most folks now are wearing their seat belt. But a lot of folks aren't backing up. You know you should.

This lady is from Australia. She has a database of 3,000 farmers. You had a mouse plague. The mouse got into the computer and she lost the names and addresses of all 3,000 farmers. I guess you could call that mouse a big bug. And you do know, I'm sure you've all heard this story when we talk about a bug in a computer program that that actually goes back to an actual bug in this huge computer system that filled a room back in 195 whatever, whatever they were first getting involved with, with developing computers. That's why we say there's a bug in the system, this truly was a moth that got into the system. That's where that comes from. The viruses we don't trace that to something quite so graphic, but certainly something to be concerned about.

I guess a final comment about computers and computer record keeping systems and computers of farms, I am so pleased to see so many farm operations becoming computer literate and integrating the use of the computers into their businesses. And I think we're seeing that even maybe more so than just comparable sized businesses otherwise self-employed persons. The farmers are recognizing what's there. Now there were some false starts a few years ago when people were so sure that farmers were going to go with the computers. There was one magazine in particular that came out with the wonderful, wonderful magazine that was going to come out every month, called Agricultural Computing, it was a great magazine. But there weren't enough farmers around to support it. Now there are. In American Agriwomen, I don't know what we'd do without the Internet, and I think Carol Ann mentioned that this morning. Just to be able to communicate so rapidly, to put something in the computer at my convenience any time during the day or night, and know that the people that I'm sending it to are going to get when they log on to their computers and pull up their e-mail. I think back to 1974 when American Agriwomen was first formed. And I remember our first president, who would have given her eye teeth, literally, for a photocopy machine. And now, we take for granted the faxes, I mean, did you ever stop and think, just how does a fax work? I have no idea, I don't really want to know, I just it to work. But to me, how can you put this picture in and it comes out on the other side of the world looking just like it went in? It just blows my mind, but the technology is wonderful. I might point out something about Elizabeth's technology? You noticed that her handout, they do have your handout as well. That's an example of technology. You'll notice where the staple is on her handout. Over in the business center, for some reason, when her handouts came out of the machine that automatically copies, collates and staples, the staple was in the bottom right-hand corner instead of the top left-hand corner. We don't know why, but we thought well that's something to do with modern technology. The girl over the copy center on those two offered to do them over. No, I'll take the discount instead, thank you.

But, Liz and I both appreciate your coming and we were very grateful to see that this conference did take place. We've made a lot of friends here and we hope to keep those friends. If there's anything that we can do for you, both my address and e-mail are in the handout and Elizabeth's address and e-mail is on the 2nd page of her handout. So, please let us hear from you, anything that we can do or any communication, hey, you know, farm women are the best persons around as far as I'm concerned to talk with, to communicate with, to get to know and to make your life-long friends. And that's where we find our friends, in the farm women's network. So, thank you all and we'll see you wherever this next conference is whenever it takes place.