Computer Assisted Management: The Case of Jim and Kathy Moseley

This is the story of Jim and Kathy Moseley, who are recognized as outstanding farmers and who share both in business and in family growth and development. It is the story of how they improved their business management performance by using various computer programs.

Kathy and Jim Moseley have become computer experts able to manage a farm business that produces 2,500 acres of corn and 10, 000 hogs annually. (Photo by Purdue University staff)

Their Start-Up Years

Jim and Kathy were married in their senior year at Purdue University; their dream was to enter production agriculture. A friend knew of a 200-acre, high-yielding farm with old, unused hog buildings near Clarks Hill, just a few miles southeast of their alma mater. The farm was being field-rented because no one would live in the house and no one would care for the hogs. The owner wanted livestock raised on her farm, and the farm manager could not find anyone to do it. With material resources totaling $800 (their car), the Moseleys applied for a Farmers Home Administration (FmHA) loan and made an application to rent the farm.

Neither the FmHA representative nor the farm manager was favorably impressed with Jim and Kathy at first.

However, only one other person made application to be the farm's livestock tenant. Jim prepared and reprepared cash-flow projections for FmHA and presented his case personally before the board. Eventually, both FmHA and the farm manager tentatively agreed to help the Moseleys start farming.

In the spring of 1970, with three groups of gilts (young female pigs) instead of two as they had agreed, the Moseleys began. When the farm owner visited the farm, she found pigs everywhere including the garage. "My goodness," she said, "we've got to do something about this."

That was the day Jim learned, firsthand, the power of computer printouts. He had recently attended a Purdue University computer swine workshop where he had developed plans for adding hog buildings--buildings he would construct himself if the owner would provide the materials. Once the owner saw the computer plans, she agreed to provide the materials; Jim and Kathy did the rest.

Their Hog Business

The business now includes several entities that produce 2,500 acres of corn and soybeans and 10,000-plus hogs annually. In a sense, Kathy controls the business in her 35-hour-per-week job as computerized check writer and bookkeeper. She also monitors physical pig performance via a swine software package.

Gary Bolander, their partner and former employee, is in charge of genetics for their gilt sales business. He is counting on the new computer data base and selection process to put their breeding practices at the forefront of their industry.

Jim, Kathy, Gary, and Wayne Bring-man (former employee and crop farm partner) agree that they could not handle their information system, and they would not have produced such business successes, without their computer software. They developed much of this software with the help of their local computer consultants, George Morgan and Keith Schuman.

Crop and Machinery Decisions

Jim attended his first Purdue Top Farmer Crop Workshop at an area Extension session in 1972. He quickly learned to operate the workshop's computer linear program budget to calculate his machinery and labor costs in the available days suitable for field work to grow his crops. From then on, he has answered every crop mix, timeliness, tillage system, and farm size question by using the Purdue budget to "test before he invests" in the change. For a brief time, he even had a private account on the Purdue mainframe computer and ran budgets over the telephone from his home.

One of Jim's first major decisions was to buy a used 12-row planter. Why? He felt he got a higher percentage return on his money from used, instead of new, machinery. Also, he chose the 12-row planter because he got it at a bargain price; he could plant his crop quickly and still do his hog chores; and by hiring extra labor and running the machinery more hours per day, he could farm extra acres when they became available.

Early on, Jim chose to get a second tractor identical to his main tractor. Then, if one broke down, by working around the clock he and his part-time help could use the other one to both prepare ground and plant the crop. At an extra annual cost of approximately $2 per acre over the cost of a smaller tractor, he had a low-cost insurance policy.

Shadow Price Signals

From the beginning of their experiences at computer farming, Jim, Kathy, and, later, their employees and partners have responded to the computer linear program shadow price signals. The shadow price is the value of a scarce generally completely used up resource. In other words, it is the amount of additional revenue you could realize if you added the resource to your operation. They have rented extra land when the rent was less than the shadow price on the worst new acre to be farmed. They have traded for bigger machinery when, after renting the extra land, they found that the shadow price for bigger machinery during the prime planting and harvest periods indicated that the extra returns would be greater than the extra costs of the new machinery.