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, 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. 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 AgXS Inc. Expanding Ag Retail Reach With AgVeritas
November 5, 2015
AgVeritas, the patented cloud-based yield analysis application launched by XS Inc for the 2015 season, is making a significant impact Read More
EquipmentDeere Announces New API Linking Operations Center With MyAgCentral
October 8, 2015
Deere & Co. and DN2K have agreed to form SageInsights — a joint venture to initially serve the agriculture industry Read More
Precision AgPurdue Releases 2015 Precision Ag Services Dealership Survey Results
October 5, 2015
In the spring of 2015, CropLife magazine and the Departments of Agricultural Economics and Agronomy at Purdue University conducted the Read More
Precision AgUAVs To Take Flight At 2015 Farm Science Review
August 14, 2015
Unmanned Aerial Systems (UAS) and Unmanned Aerial Vehicles (UAVs) have taken the agriculture industry by storm and will soon be Read More
Top 100 Articles
CropLife 100United Cooperative Acquires Four ADM Wisconsin Facilities
November 12, 2015
United Cooperative, based out of Beaver Dam, WI, recently acquired four grain and agronomy locations from Archer Daniels Midland (ADM) Read More
CropLife 100BRANDT Car Makes NASCAR Xfinity Series
October 29, 2015
BRANDT will join JR Motorsports with driver, Justin Allgaier, for the 2016 NASCAR Xfinity (NXS) Series season. Allgaier will pilot Read More
CHS Building exterior
CropLife 100CHS Leaders Help Shape Succession Report
October 22, 2015
Succession planning was listed as a main concern of cooperative leaders at this summer’s 15 regional CHS owner town hall Read More
Fall Harvest
CropLife 100Pinnacle Purchases Eight Regional Seed Companies
October 12, 2015
Pinnacle Agriculture Holdings has announced the purchase of eight regional seed companies to advance its seed business. Pinnacle has acquired: Read More
MRM Agricultural Service
CropLife 100Pinnacle Acquires CropLife 100 Ag Retailer
October 8, 2015
Pinnacle Agriculture Holdings, LLC has successfully acquired the Missouri-based agronomy business of MRM Agricultural Service, LLC and its affiliates (MRM). Operating Read More
Eric Jenks, Wilbur-Ellis
CropLife 100Wilbur-Ellis Opens Dry Fertilizer Storage And Blending Facility In Washington
October 8, 2015
Wilbur-Ellis Co., ranked No. 4 on the CropLife 100, has constructed and opened a 22,000-ton dry fertilizer storage and blending Read More
Latest News
HerbicidesBREAKING: EPA Pulls Registration On Dow’s Enlist …
November 25, 2015
EPA on Wednesday withdrew approval of a controversial new weed killer to be used on genetically modified corn and soybeans, Read More
FertilizerYara Tampa Ammonia Terminal Garners ResponsibleAg Honor…
November 25, 2015
Yara has received its first ResponsibleAg Certification for its Tampa, FL, Ammonia terminal location. This achievement demonstrates Yara’s commitment to Read More
ManagementReviewing The Top Ag Stories For 2015
November 24, 2015
Editors Eric Sfiligoj and Paul Schrimpf discuss the most noteworthy events from this past year in agriculture. Read More
EmployeesAgriculture Jobs May Be Plentiful, But New Grads Are Sc…
November 24, 2015
Close to 60,000 jobs are set to open up in agriculture each year for the next five years, but there's not enough grads to fill them. Read More
Radish cover crop
StewardshipCover Crops Guide Helps Growers Improve Water Quality
November 23, 2015
A publication that teaches growers the advantages of using cover crops to improve soil health and crop yields has won Read More
Crop InputsThe Andersons’ Products Receive California Organi…
November 23, 2015
The Plant Nutrient Group of The Andersons, Inc. announced today that its Humic DG and Black Gypsum DG products are Read More
Eric SfiligojNew European Study Seems To Support Glyphosate Safety
November 23, 2015
Looking at any international news over the past few years, it might seem as if the European Union (EU) is Read More
Toggle Biostimulant corn roots
Crop InputsTwo New Biostimulants Added To United Suppliers’ …
November 20, 2015
Winfield US announces the launch of two new products in the United Suppliers portfolio for the 2016 crop season, Optify Read More
StewardshipNRDC Report: Cover Crops Contain Vast Benefits
November 19, 2015
As harvest season ends and farmers in the United States ready themselves for winter, one small change could make a Read More
Fall Harvest
Seed/BiotechArysta Launches New Seed Protectant
November 19, 2015
As spring wheat growers begin planning for a strong start to their season, Arysta LifeScience North America announces RANCONA V Read More
Crop InputsInocucor Receives U.S. Patent For Microbials
November 19, 2015
Inocucor Technologies Inc., the Montreal-based agriculture biotech company, was issued patent No. 9,175,258 by the U.S. Patent and Trademark Office to protect Read More
ManagementSyngenta Rumors and ARA 2015 Preview
November 19, 2015
CropLife Editor Eric Sfiligoj looks at the latest rumors involving Syngenta selling its crop protection business and talks about events Read More
EquipmentAGCO Announces Finalists For Operator Of The Year Honor
November 19, 2015
AGCO Corp. has announced the four top operators chosen as finalists for AGCO’s 10th Annual Operator of the Year program, Read More
High Plains Aquifer
StewardshipStudy: High Plains Aquifer Overall Usage In Decline
November 18, 2015
A new Kansas State University study finds that the over-tapping of the High Plains Aquifer’s groundwater beyond the aquifer’s recharge Read More
Golden Harvest Corn healthy leaves
FungicidesArysta Launches New Corn And Soybean Fungicide
November 17, 2015
Arysta LifeScience North America has recently launched ZOLERA FX Fungicide. The highly systemic, powerful fungicide delivers broad-spectrum disease control with Read More
Young corn plants in soil
Crop InputsBioAg Alliance: Microbials Targeted For 250-500 million…
November 17, 2015
Monsanto and Novozymes have announced a new 2025 acreage target that will guide the companies’ microbials business for the next Read More
Syngenta Sign
Crop InputsSyngenta Still Being Eyed For China Takeover
November 16, 2015
China National Chemical Corp. approached sovereign wealth funds including China Investment Corp. to help pay for a potential acquisition of Read More
Cedar Country Cooperative
Eric SfiligojCooperative Consolidation Continues
November 16, 2015
As I put this enewsletter column together, we’ve just put the finishing touches on our magazine’s annual CropLife 100 report. Read More