12th Annual Precision Agriculture Survey

In the Midwest, the more established precision technologies have hit their stride. Though a few dealerships add new precision technologies and services each year (like field mapping for legal/billing/insurance purposes and satellite/aerial imagery for internal dealership use), an almost equal number of dealerships may drop those technologies, resulting in a more or less stable level of use.

This spring, CropLife® magazine and Purdue University’s Center for Food and Agricultural Business conducted a survey of crop input dealers for the 12th consecutive year to see which precision technologies were being used by dealers, what type of precision services they were expecting to offer in the future, and how precision customers were impacting their businesses. As in previous years, a survey was sent to 2,500 CropLife dealership readers to “take the pulse of the industry” with respect to precision technologies.

This year, results are focusing on the Midwest dealerships who responded (see sidebar for details about the survey).

How Midwest Dealers Are Using Precision

The most common precision technology this year was GPS guidance systems with manual control/lightbar, by 75% of respondents (Figure 1), followed by precision technologies being used to provide services to growers. Rising to third place this year were GPS guidance systems with auto control/auto steer for fertilizer/chemical applications (used by 30% of the responding dealerships). Over one-quarter of the respondents (27%) used both types of GPS guidance systems, while 22% of the dealerships didn’t use either type of guidance system.

Various types of sensors are beginning to be used by retail dealerships. Last year, we combined all the sensors into one question about sensors mounted on equipment/pick-up trucks.

This year, sensors were split out to two types: soil sensors for mapping mounted on a pick-up truck, applicator, or tractor (examples include pH soil sensor and chlorophyll/greenness sensor), and on-the-go sensors (such as Crop Circle, Greenseeker, Yara N-Sensor). Almost 2% of the dealerships used at least one type of sensor last year (1.7%), and this rose to 2.4% of the Midwestern dealerships this year. Soil sensors mounted on the equipment were used by 1.8% of the respondents and on-the-go sensors were used by 1.2% of the respondents.

Figure 2 shows the trends in the use of these technologies for the last five years. The biggest growth in technology in the last three years has been in GPS guidance systems with auto control/autosteer. In 2004, only 4% of the dealerships in the Midwest were using autocontrol/autosteer technology. Last year, 22% were using the technology and by this year 30% of the Midwestern dealerships were using it. The use of other precision technologies has more or less leveled off from 2005 to 2007.

Precision Ag Service Offerings

In the Midwest, precision agriculture service offerings have remained almost level over the past few years with minor fluctuations each year, likely due to different samples of survey respondents. However, despite the leveling off of adoption, dealers are still expecting to add precision services in the next two years, with continued growth expected through 2009. The biggest growth expected is in fieldmapping with GIS, with 56% of the Midwestern dealerships expecting to be offering the service by 2009, up from 45% in 2007. Satellite imagery is also expected to grow substantially in the next two years, from 18% of the dealerships offering the service by fall of 2007 to 27% by 2009.

Precision application services continued to grow in 2007, with controller-driven multiple-nutrient application growing at a quicker rate than single-nutrient application (Figure 3 and Figure 4). Both types of controller-driven application are expected to grow over the next two years, with 62% of the Midwestern dealerships expecting to be offering single-nutrient controller-driven application in 2009 and almost 40% of the respondents expecting they will be offering multi-nutrient controller-driven application.

Figure 5 shows the different types of variable-rate application services offered by the fall of 2007. Over half of the respondents indicated they are currently offering controller-driven single-nutrient application of fertilizer, outstripping manual variable-rate application, which was offered by only 44% of the Midwestern dealerships. Controller-driven multiple-nutrient application of fertilizer is quickly catching up, though, with almost one-third of the respondents indicating they were offering that service in 2007. Only for pesticides was manual variable-rate application still the most popular form of variable-rate application, with 23% of the dealerships offering manual variable-rate application.

Pricing Precision Services

Each year, dealerships are asked to tell us the typical price they charge per acre for their precision services. For those offering only packages or bundled pricing, it often isn’t possible to price out the components individually. Hence, far fewer dealerships typically respond to this question relative to some of the other questions in the survey.

Figure 6 and Figure 7 show the average prices charged per acre for each of the precision services in 2007 in the Midwest. The bars indicate what the middle 80% of the dealers were charging (as in previous years, we dropped the top 10% and bottom 10% to make the ranges a bit more consistent). Overall, the average prices charged were similar to those seen in 2007 with quite a bit of variability still in the market. Some of the services continue to be offered at no charge to the customer, though this is changing as precision technology becomes more wide-spread. The most common service offered free-of-charge was making agronomic recommendations based on GPS data, where 54% of the responding dealerships did not charge for the service.

We also asked dealerships how profitable they felt their precision service offerings were. For each precision component,Figure 8 shows the percentage of respondents who said the service was generating a profit (and covering both fixed and variable costs) from 2002 to 2007.

This year, 47% of the respondents felt that their total precision package was profitable, the highest percentage since we started asking the question in 2002. The most profitable precision service continued to be controller-driven multi-nutrient application, with 49% of the respondents saying that it generated a profit for them. This was also the only service with more respondents saying it generated a profit in 2007 than did in 2006. Controller-driven single nutrient application was second in profitability, with 40% indicating the service generated a profit for them.

In Conclusion

Precision technology appears to be here to stay in over three-quarters of the retail dealerships in the Midwest. The biggest growth currently is in use of the technology within the dealership instead of in services offered to customers. GPS guidance systems with autocontrol/autosteer continue to show the most rapid growth, though sensors (both on-the-go and mounted sensors) may be starting their growth in adoption as well. With the boom in ethanol production, a key strategic question is the impact of more corn acres on precision agricultural services (and vice versa).

Where are the opportunities? Where are the challenges? This story is one to follow in the 2008 CropLife/Purdue precision agriculture survey.
 

Leave a Reply

Precision Ag Stories

Precision AgUAS: The S Stands For Smart, Service And Sensors
May 1, 2014
The only thing occuring more rapidly than the technologies’ evolution is the clamoring to implement UAS into agriculture as soon as possible. Read More
Precision AgAg Retail: 3 Tech Trends To Watch In 2014
April 1, 2014
It's been a busy first quarter of technology developments in 2014. Here are some of the highlights, and things to watch in the months ahead. Read More
Valley Variable Rate Irrigation
Precision AgMaximizing Returns From Water Inputs
March 3, 2014
Irrigation manufacturers have developed some vital new technologies to fine-tune irrigation and save growers money, water, energy and labor. Read More
Todd Golly and UAVs
Precision AgReal-World UAV Experience In Agriculture
February 3, 2014
Minnesota grower Todd Golly shares his views on the use of unmanned aerial vehicles. Read More

Trending Articles

ManagementExpert To Discuss Farmland Value, Rent At Farm Science Review
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More
EquipmentAdvance Your Technology IQ At MAGIE
August 13, 2014
The Midwest AG Industries Exposition (August 20-21) is the place you need to be to see, study and evaluate how new advances in the equipment, operations, crop protection and fertility sectors can help your business prosper. Read More
HerbicidesScouting Key To Next Season’s Soybean Herbicide Program
August 12, 2014
When growing soybeans, growers need to think ahead to stay one step ahead of weeds. That means examining weed threats and evaluating which herbicides work best. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. Read More
CropLife 100BRANDT Acquires Lemon Ag Services
August 4, 2014
The acquisition of Lemon Ag fits BRANDT’s aggressive corporate strategy of providing superior agronomic advice and services for customers in central Illinois. Read More
Eric SfiligojThe Resurgence Of Crop Protection
August 4, 2014
Plenty of new offerings over the next few years should see a rebirth for the crop protection products category in terms of market share. Read More

Latest News

CropLife 100Pinnacle Acquires California-Based Retailer
August 29, 2014
Pinnacle Agriculture Holdings will acquire Kerman Ag Resources, Inc., which will operate under Pinnacle's Performance Agriculture brand. Read More
Allied Cooperative Grain Plant
ManagementArcadia Co-op To Merge With Allied Cooperative
August 28, 2014
Allied Cooperative has announced that members of Arcadia Co-op voted in favor of a merger with Allied Cooperative, paving the way for the consolidation which will be effective on December 1, 2014. Read More
InsecticidesBioinsecticide VENERATE Now Registered In California
August 27, 2014
Marrone Bio Innovations' VENERATE is a new tool to help California growers control crop-damaging insect pests, fight the development of insect resistance and reduce pesticide residues on fruits and vegetables. Read More
CropLife 100Two Iowa-Based Ag Co-ops To Merge
August 27, 2014
The Board of Directors and management of United Western Coop, Missouri Valley, IA has completed a merger with Heartland Co-op, West Des Moines, IA, effective September 1, 2014. Read More
FertilizerKoch Expands AGROTAIN Nitrogen Stabilizer Portfolio
August 26, 2014
Koch Agronomic Services, LLC has added two new innovative nitrogen stabilizers to the AGROTAIN product family – AGROTAIN ADVANCED and AGROTAIN DRI-­MAXX. Read More
Seed/BiotechDuPont To Build Two Seed Treatment Centers
August 26, 2014
DuPont has announced construction on two state-of-the-art centers dedicated to developing and testing seed treatment formulations, applications and seed handling techniques in an important step toward bringing new solutions to growers. Read More
Seed/BiotechLoveland Products Acquires A Controlling Interest In Ag…
August 26, 2014
Loveland Products, a subsidiary of Agrium , has announced the company has acquired a controlling interest in Agricen, a Dallas-area agricultural biotechnology company delivering biochemical-based products for efficient and sustainable plant nutrition. Read More
StewardshipUp Close Look At The 2014 Environmental Respect Award W…
August 25, 2014
The 2014 Environmental Respect Award winners were honored recently at the 24th annual event in Wilmington, DE. Read More
Eric SfiligojAg Science Rejection Carries Consequences
August 25, 2014
As innuendo and fear dog the regulatory process, agriculture can’t get the new tools it needs to combat world hunger. Read More
LegislationFarmers Dismayed As New Farm Bill Dumps Direct Payments
August 25, 2014
The threatened end of cash subsidies to the nation’s row crop farmers dates back through at least the last two iterations of national agriculture policy legislation. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
CropLife 100GROWMARK CEO To Retire
August 22, 2014
GROWMARK chief executive officer Jeff Solberg has announced his retirement effective September 15, 2014. Read More
InsecticidesDuPont’s Prevathon Approved For Dry Beans
August 22, 2014
DuPont Prevathon insect control powered by Rynaxypyr has received EPA registration for foliar use on dry bean crops, including dried shelled peas and beans. Read More
ManagementNCGA DuPont New Leaders Program Enters Sophmore Season
August 20, 2014
The National Corn Growers Association and DuPont are pleased to announce the second year of the NCGA DuPont New Leaders Program. Read More
FungicidesVerdesian Links Up With Mitsui, Hokusan
August 20, 2014
Mitsui Chemicals Agro, Inc., and Hokusan Co., announced the signing of an exclusive licensing agreement allowing Verdesian Life Sciences global access to its patented technology for suppressing mycotoxin contamination in wheat and barley. Read More
SprayersUniversity Of Illinois Introduces New Spray App
August 18, 2014
University of Illinois Extension has released a new smartphone app for making sprayer-related calculations. Pesticide Spray Calculator, or Spray Calc, Read More
Crop InputsSyngenta Names New Manager Of Federal Government Relati…
August 18, 2014
Laura Wood Peterson has joined Syngenta as manager of federal government relations, based in Washington, DC. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science …
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More