Precision Agriculture Survey: The Roller-Coaster Economy Impact

With the almost unbelievable shifts in the economy over the past 12 months, many are looking with great interest at trends in the agricultural dealer businesses.

For the 14th consecutive year, CropLife magazine and Purdue University’s Center for Food and Agricultural Business have conducted a survey of retail crop input dealers to see which precision technologies are being used by dealers, what type of precision services they are expecting to offer in the future, and how precision programs continue to evolve.

How Dealers Are Using Precision

Despite the severe global recession in the general economy, the use of precision technologies within the dealership continued to grow this year. The most commonly used precision technology was GPS guidance systems with manual control/lightbar, 79% of the respondents, up from 73% in 2008, followed by precision technologies being used to provide services to growers — 65%, up from 61%. Similar to last year, the third most-common use of precision technology within the dealership was the use of GPS guidance systems with auto control/autosteer for fertilizer/chemical application, used by over half of the dealerships who responded (53%). Almost half of the respondents, 49%, used both types of GPS guidance systems (manual and automatic steering) while 18% of the dealerships didn’t use either type of guidance system.

For the third year in a row, we asked dealers if they were using sensors: soil sensors for mapping mounted on a pick-up truck, applicator, or tractor (example: pH soil sensor, chlorophyll/greenness sensor) and on-the-go sensors (such as Crop Circle, Greenseeker, Yara N-Sensor). Five percent of the dealerships used at least one type of sensor this year similar to last year’s 4% of the respondents. Soil sensors mounted on the equipment were used by 4.6% of the respondents and on-the-go sensors were used by 2.5% of the respondents.

To this point, there does not seem to be any economic fallout in the growth of precision technology use within the crop input dealership. Figure 2 shows the trends in the use of these technologies for the last five years. The biggest growth in technology has been in GPS guidance systems. Guidance systems with manual control/light bar continue to grow at a slow but continuous rate, from 61% of the dealerships using the technology in 2004, the first year the question was asked, to almost 80% in 2009. Even greater growth can be seen with the auto control/autosteer guidance systems. In 2004, only 5% of the dealerships were using auto control/autosteer technology. This year, 53% were using the technology, up substantially more than the 37% reported last year.

Another growth area this year was field mapping with GIS for legal/billing and insurance purposes, growing 29% from 2008 to 2009, with over one-third of the responding dealerships now using the technology.

Precision Ag Service Offerings

The precision services that dealerships have offered their customers have remained relatively stable over the past few years with minor fluctuations each year. (This may be due in part to different annual samples of survey respondents.) This year, there were slight declines in several precision service offerings, though there is no evidence to suggest that this is a change in the general trend. Dealers are expecting to add more precision services in the next two years, with continued growth expected through 2011 for all precision services. However, growth estimates are not quite as aggressive as was projected last year at this time.

Offerings of specific precision application services continued to grow in 2009, though a bit slower than the change from 2007 to 2008. The most growth occurred with controller-driven multi-nutrient application, with 39% of the responding dealerships offering the service in 2009, compared to 33% in 2008. Controller-driven single-nutrient application changed very little, hovering around 56% of the dealerships reporting.

Variable-seeding with GPS grew once more this year, from 15% of the dealerships offering the service in 2008 to 18% in 2009. One-quarter of the respondents expected to be offering the service by 2011.

Figure 5 shows the different types of variable-rate application services dealerships expect to offer by the fall of 2009. Consistent with Figure 4, there was very little change in controller-driven single-nutrient application from 2008 to 2009. Just over half of the respondents (52%) offered controller-driven single-nutrient application of fertilizer, 44% offered the application of lime, and 23% offered the service for chemicals.

The most growth in controller-driven multiple-nutrient application was for fertilizer, increasing from almost one-third of the respondents in 2008 to 39% in 2009.

Profitability

Despite the faltering economy, as of February 2009, responding dealerships hadn’t seen a big change in the profitability of their service offerings, with profitability levels remaining near 2008 levels. For each precision service, Figure 6 shows the percentage of respondents who indicated the service was generating a profit (covering both fixed and variable costs) from 2003 to 2009. As in 2008, 43% of the respondents felt that their total precision package was profitable. The most profitable precision service continued to be controller-driven multi-nutrient application, with 51% of the respondents saying that it generated a profit for them. However, half of the respondents said that controller-driven single-nutrient variable-rate application was generating a profit this year as well.

Expected Investments

Given the current market environment, another question we had for dealers was how much they would be investing in precision technology this year. Interestingly, more respondents were expecting to increase their investment in precision technologies this year compared to 2008. Over half of the responding dealerships (52%) said they were expecting to invest more than $10,000 in precision technology this year, up from only 39% of the respondents a year ago. One-third of the respondents (35%) said they expected to invest $10,001 to $49,000 in 2009, while another 7% expected to spend $50,000 to $99,999, and one in 10 expected to invest more than $100,000 in precision technology in 2009.

Summary

Though the crash in global economy has dominated media attention over the past nine months, the effects have not been seen in the precision technology and service areas of agricultural dealerships. Demand for these services is expected to continue to grow slowly. And with crop prices remaining relatively stable at levels higher than seen in the last few years (the bubble in 2008 aside) and demand for services continuing to increase, dealerships are willing to invest more into technologies to improve accuracy and data collection/use in their businesses. We will check in with dealerships in 2010 to determine if this high level of investment is realized!

Leave a Reply

Precision Ag Stories

PrecisionAg Vision Conference
Precision AgPrecisionAg® Vision Conference: Focused on the Future
June 13, 2017
PrecisionAg® is pleased to announce the return of its PrecisionAg Vision Conference, October 10-12, 2017. Based on overwhelmingly positive response Read More
EquipmentAgTech Summit Aiming High for Modern Farming Solutions
June 12, 2017
THRIVE AgTech, in partnership with SVG Partners and Forbes, is hosting the third annual Forbes AgTech Summit June 28-29 in Read More
Central Valley Ag Randolph, NE
Precision AgLand O’Lakes Invests in EFC Systems
June 12, 2017
Land O’Lakes, Inc. has made a minority equity investment in EFC Systems, Inc., an ERP (Enterprise Resource Planning) and precision Read More
John Deere Gen 4 Extended Monitor
EquipmentPrecision Agriculture: Making Cab Displays Do the Jobs at Hand
June 2, 2017
A display can never do too much. That’s the opinion of Jeff Dickens, Product Sales Specialist with Ag Leader — Read More
Trending Articles
PrecisionAg Vision Conference
Precision AgPrecisionAg® Vision Conference: Focused on the Future
June 13, 2017
PrecisionAg® is pleased to announce the return of its PrecisionAg Vision Conference, October 10-12, 2017. Based on overwhelmingly positive response Read More
Redbanded-stinkbug-on-soybean-Photo-credit-Thomas-County-Ag
Crop InputsExperts: Mild Winter, Early Planting Will Increase Soybean Insect Threat
June 12, 2017
Higher than average temperatures this past winter affected much of the nation, especially the South and Midwest. The National Centers Read More
Eric SfiligojMonsanto ‘Picks Its Battles’ by Nixing Deere Deal
May 23, 2017
Having been in the trade journalism game since the mid-1980s, I remember several watershed moments during my career. One of Read More
Migrant farm workers
LegislationTrump: Immigration Crackdown Won’t Impact U.S. Agriculture
May 16, 2017
President Donald Trump said he would seek to keep his tough immigration enforcement policies from harming the U.S. farm industry Read More
AGCO Ratliff featured
Eric SfiligojRemembering Robert Ratliff
May 15, 2017
With all the fast-paced happenings in agriculture this spring, with multiple mergers in the works and planting season in full Read More
Case sprayer nozzle closeup
EquipmentSpray Application: A Nozzle Renaissance
May 2, 2017
If you had asked four-decade ag veteran Mark Bartel, President of Wilger Inc., just a few years ago what lay Read More
Latest News
Crop InputsArkansas Plant Board Votes to Ban Dicamba — Now W…
June 23, 2017
The Arkansas State Plant Board has voted to pass a proposed emergency rule to ban the use of in-crop dicamba, Read More
Engenia soybeans
Crop InputsBASF: ‘Closely Monitoring’ Dicamba Situatio…
June 22, 2017
BASF, whose Engenia herbicide is the target of more than 200 drift complaints in Arkansas, emailed the following statement to Read More
ManagementConsolidation Update
June 22, 2017
Editors Paul Schrimpf and Eric Sfiligoj discuss progress on manufacturer consolidation, and another big move for Midwest cooperative Central Valley Read More
Palmer pigweed seedhead in cotton
Crop InputsThreat of Dicamba Ban Looms in Arkansas
June 22, 2017
The Arkansas State Plant Board has rejected a proposed ban on the use of dicamba herbicide, but a procedural error Read More
Potash Agrium
Crop InputsAgrium-PotashCorp to become Nutrien upon Merger Complet…
June 21, 2017
Potash Corporation of Saskatchewan Inc. and Agrium Inc. have announced today that once the anticipated merger transaction closes, the new Read More
Crop InputsMidwestern BioAg Hosts TerraNu Fertilizer Plant Opening…
June 20, 2017
Last Friday, Midwestern BioAg was joined by over 80 local farmers, media and staff to celebrate the grand opening of Read More
Soybean Field
Industry NewsAligned Ag Distributors Names New President
June 19, 2017
Aligned Ag Distributors LLC announced this morning the appointment of Mary Tolke to the position of President/CEO, effective July 1. Read More
ManagementPlotting Corn, AGCO/Asmark’s Applicator Training Center…
June 15, 2017
Editors Paul Schrimpf and Eric Sfiligoj talk about their recent visits to Columbus, OH, and Bloomington, IL, along with an Read More
Seed/BiotechDow AgroSciences Announces Launch of Enlist Corn for 20…
June 14, 2017
Enlist corn will be commercially available in the U.S. for the 2018 growing season. Dow AgroSciences announced the launch today Read More
ASMARK AGCO Applicator Training Center
EmployeesAsmark, AGCO Open Training Center for Beginning Applica…
June 13, 2017
AGCO Corp. and the Asmark Institute have opened a new Applicator Training Center, created in a collaboration between the two Read More
Power to Do More Contest Winners
HerbicidesDow AgroSciences Announces Three Winners in Power to Do…
June 13, 2017
Thousands of votes have been cast and three farmers have been awarded the power to do more with a $10,000 Read More
Frogeye leaf spot
FungicidesStrobilurin-resistant Frogeye Leaf Spot Threat Looms wi…
June 13, 2017
Heavy spring rainfall throughout the South and Midwest delayed planting and created the perfect environment for diseases like frogeye leaf Read More
PrecisionAg Vision Conference
Precision AgPrecisionAg® Vision Conference: Focused on the Future
June 13, 2017
PrecisionAg® is pleased to announce the return of its PrecisionAg Vision Conference, October 10-12, 2017. Based on overwhelmingly positive response Read More
CHS St. Paul, MN fertilizer terminal
LegislationICGA Praises President Trump’s Remarks on Waterwa…
June 12, 2017
Illinois Corn Growers Association President Justin Durdan, a farmer from Utica, issued the following statement regarding President Donald Trump’s comments Read More
Wheat Growers
UncategorizedWheat Growers Names Tracy Linbo as Senior Vice Presiden…
June 12, 2017
Wheat Growers has hired Tracy Linbo as Senior Vice President of Agronomy. Linbo joins Wheat Growers after having served 10 Read More
EquipmentAgTech Summit Aiming High for Modern Farming Solutions
June 12, 2017
THRIVE AgTech, in partnership with SVG Partners and Forbes, is hosting the third annual Forbes AgTech Summit June 28-29 in Read More
Central Valley Ag Randolph, NE
Precision AgLand O’Lakes Invests in EFC Systems
June 12, 2017
Land O’Lakes, Inc. has made a minority equity investment in EFC Systems, Inc., an ERP (Enterprise Resource Planning) and precision Read More
BRANDT
Crop InputsBRANDT Products Approved for Use with New Cropping Syst…
June 12, 2017
BRANDT, a leading manufacturer of specialty products for the agriculture and turf markets, has announced that 11 BRANDT formulations have Read More