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Increasing Yield: Part 2 [Agriculture
Posted on May 30, 2017 @ 06:01:00 AM by Paul Meagher

In my last blog I discussed some ideas related to increasing yield. The topic is rich enough that I want to continue exploring the concept in today's blog.

The concept of yield is fundamentally a spatial concept - how much productivity can you get out of a given area. Farmers are very concerned about the yield from their land as it correlates strongly with their level of profitability.

When yield is used in finance, this spatial aspect of the concept is often lost. Consider the Wikipedia definition of yield:

In finance, the yield on a security is the amount of cash (in percentage terms) that returns to the owners of the security, in the form of interest or dividends received from it.

The financial use of the term yield refers to productivity in the form of interest and dividends, but disavows any connection to how much space is used to do it. I think we should have a concept of productivity that takes into account the amount of space used and yield usefully serves that purpose. In finance, the term yield can be equated to other terms such as ROI and IRR so does not serve as much of a purpose.

The yield of a system is often tied to how many functions we stack within a given physical area. Consider a bike stand I built yesterday for a couple of bikes that I own. One bike did not come with a kickstand and my son broke the kickstand on the other one so I've been precariously leaning bikes against the garage as an alternative. The idea gestated in me that I could use a garbage bin I built a few months back as the base for my bicycle stands and this is what I came up with.

I made the stands from the last of some left over pieces of 2x6 lumber (sawed down the middle) from my cold frame project. I didn't have much for input costs other than my time. It was simple in design because I wanted it that way and because I didn't have much scrap lumber on hand. The space occupied by the garbage bin and around it now has an increased yield. It still offers garbage services but in addition it now offers bikestand services. Functional properties of the garbage bin were utilized, the fact that it was made of wood and heavy, to integrate the bike stand into the garbage bin. We are able to stack functions when the output or properties of one element can be the input to another element of the design.

All bricks and mortar businesses should be concerned with yield. How much revenue is the business making per square foot and how does that compare to similar businesses and other businesses in general. The storage business can be quite profitable when looked at through the lens of relative yield and the seemingly ever increasing need to deal with the amount of stuff people don't have the space for.

If a farmer grows alot of crop but it takes alot of inputs to produce that crop then that farmer's yield can be less than a farmer who produced less crop on comparable acreage but who had fewer input costs. The calculation of yield should take into account input costs. So if you want to increase the yield of a store by investing X amount, that should be justified by the increase in business activity relative to the investment. Yield isn't just about increasing business activity for the sake of business activity, but doing so in a way that increases yield, aka the profit, of the enterprise.

A book that has recently come onto my radar that may be relevant to the discussion of high yielding systems is a book called Compact Farms (2017) by Tyler Volk.

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