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 AgGoogle Glass: New Tool For Ag
October 8, 2014
New wearable smart technologies such as Google Glass show potential to greatly impact how we accomplish the business of feeding the world. Read More
Precision AgPrecision Agriculture: Finding The Payback
September 6, 2014
Profitability in precision ag is not about any one technology, but the result of employing technology in a total system approach that is agronomically sound. Read More
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

Trending Articles

CropLife 100Agrium To Cut 500 Jobs, Sell Some Businesses
November 11, 2014
Among the businesses Agrium will try to sell are its micronutrients and European UAN (urea-ammonium nitrate) lines. Read More
HerbicidesMonsanto, Sumitomo Chemical And Valent Extend Crop Protection Collaboration
November 10, 2014
The agreement extends their strategic partnership in Monsanto’s Roundup Ready PLUS Crop Management Solutions platform for soybeans and cotton in the U.S. Read More
FertilizerCorn Rootworm Hybrids And Potassium Uptake
November 4, 2014
To achieve successful yields, grower-customers can’t afford to cut back on their potassium use with corn rootworm hybrids, say experts. Read More
StewardshipResponsibleAg Begins Auditor Training
October 31, 2014
ResponsibleAg auditor training is now underway at the Ford B. West Center for Responsible Agriculture in Owensboro, KY. Read More
InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More

Latest News

EquipmentAGCO Announces Operator Of The Year Finalists
November 20, 2014
Four custom applicators have been selected by AGCO Application Equipment as finalists for 2014 Operator of the Year, an honor that recognizes them as being among the top professionals in their industry throughout North America. Read More
MicronutrientsH.J. Baker Expands Tiger-Sul Business
November 20, 2014
H.J. Baker has created and filled two strategic positions in business development and sales within its Crop Performance Division. Read More
soybean field
FertilizerGeneral Mills Honors United Suppliers For Nitrogen Opti…
November 19, 2014
United Suppliers winning proposal detailed SUSTAIN, a consulting network that provides customized products and services for farmers using a needs-based system approach. Read More
EmployeesOhio AgriBusiness Association Awards $25,000 In Scholar…
November 19, 2014
Each year, the Ohio AgriBusiness Association Educational Trust scholarship program awards scholarship dollars to students enrolled in an agriculture-related field attending several state colleges. Read More
ManagementServi-Tech Names New CEO
November 17, 2014
Servi-Tech has named Greg Ruehle its new president and CEO. Read More
CropLife 100Pinnacle Ag Acquires Colorado Aerial Application Outlet
November 17, 2014
Ft. Lupton, CO-based Reck Aviation — a full-service chemical application company providing aerial crop applications of fertilizers and crop protection products — will operate as part of Pinnacle's AgOne Application Services brand. Read More
Eric SfiligojMcDonald’s Message: Biotech Crops Scarier Than Cancer
November 17, 2014
Despite their potential health benefits, one of the world’s largest potato users will pass on a new biotech offering. Read More
MicronutrientsWinField Releases 2014 NutriSolutions Results
November 14, 2014
A number of significant regional and national crop deficiency trends emerged from the 2014 WinField NutriSolutions tissue sampling program. Read More
FertilizerH.J. Baker Opens Chinese Production Lines
November 14, 2014
The occasion was the official launch of the Tiger-Sul sulphur Bentonite production line of two much anticipated fertilizer products in China, T90CR sulphur fertilizer and TZinc micronutrient enhanced sulphur fertilizer. Read More
ManagementOhio Certified Crop Adviser Program Accepting Nominatio…
November 14, 2014
The award recognizes an individual who delivers exceptional customer service for farmer clients in nutrient management, soil and water management, integrated pest management and crop production in Ohio. Read More
HerbicidesSyngenta Announces Acuron Trial Plot Results
November 14, 2014
Acuron was tested at 167 trial locations across 35 states. Trials included 95 Syngenta locations, 54 university locations and 18 distributor locations. Read More
Crop InputsVerdesian Expands Sales Force
November 13, 2014
The new sales representatives will work with growers, retail partners and distributors to oversee technical training and product education. Read More
EquipmentAGCO Raises $100K For Wounded Warrior Project
November 13, 2014
AGCO Corp. partnered with local AGCO dealers across the U.S. and Canada to raise nearly $100,000 in support of wounded service veterans. Read More
HerbicidesDow AgroSciences Announces Launch Of Enlist Duo Herbici…
November 12, 2014
It will be launched in conjunction with a stewarded introduction of Enlist corn, and seed production of Enlist soybeans in 2015. Read More
FertilizerH.J. Baker Expands Tiger-Sul Business
November 12, 2014
Agricultural firm H.J. Baker has created and filled two strategic positions in business development and sales within its Crop Performance Division. Read More
Blenders13 Fertilizer Blenders For 2015
November 12, 2014
Dealers can find a fertilizer blender to deliver any speed, volume and custom mix they want. Read More
CropLife 100Wilbur-Ellis Vice President Receives Honorary FFA Award
November 11, 2014
Jim Loar, vice president of operations of Wilbur-Ellis’ Agribusiness Division, was awarded the Honorary American FFA Degree at the 2014 National FFA Convention and Expo in Louisville, KY. Read More
FertilizerBASF Makes Limus Nitrogen Management Available In U.S.
November 11, 2014
Reducing ammonia losses by more than 90%, Limus nitrogen management has demonstrated increased crop yields on average of 6%, according to 2013 replicated research. Read More