Precision Pays Off

Retailers have labored to develop innovative precision agriculture services with value and depth for customers. But how well are these investments paying off, especially in tough market conditions? The answers can be mixed, but the dealers we talked with are pretty optimistic as they book for the 2009 season.

Business was in full swing at presstime at Harvest Land Coop, Richmond, IN. “From last season we’re seeing tremendous growth — somewhere from 30% to 40%, as growers try to lay plans for the ’09 crop,” says Chris Kluemke, manager of site specific services.

High fertilizer prices drove up acres serviced by soil sampling and variable-rate (VR) nutrient management last year, says Sid Parks, manager, precision farming, with GROWMARK, Inc., Bloomington, IL. “People were looking to maximize their investment,” he believes. The company has also captured customers that it didn’t have five years ago because growers have progressed up the adoption chain, perhaps purchasing a new tractor or combine with precision technology they need help with. “This presents opportunities for us, too. Our member cooperatives can be a resource,” he says.

A key factor in growth at Co-Alliance LLP has been tying services to products. “I have watched as our company used sampling as a niche program then took it to a needed procedure prior to selling fertilizer,” says Justin Welch, ag technology manager based at the company’s Danville, IN, corporate location. “The service is now profitable on its own as well as growing margins 1% to 5% of goods sold.” Indeed, Co-Alliance is also providing hybrid-specific VR population maps – with the company’s technology and seed departments working closely in promotion and service. The map service, a moneymaker in its own right, is growing the seed business, says Welch.

At What Cost

Retailers face a host of challenges as they add and tweak precision, not the least of which is making services pay. “As the technology allows us to provide more services, retailers need to charge more to access these technologies,” says Parks. “Do I charge $5 an acre for normal chemical application and $6 for the variable rate?” he asks. “Does a grower care and recognize the value of the better job? Or does he think, ‘Go out and spray my field and don’t screw it up.’” GROWMARK recommends a “value service model” and so tends to be on the higher side for its region compared to those not offering services, explains Parks. Plus, this year, increased soil lab operating costs (fuel, analysis equipment) are bumping prices up a bit.

Another big challenge is just staying aware of the technology available. “What’s going to be the next buzz?” asks Kluemke. “There are so many things you can do. It’s all about sorting through all the information and finding that one little piece that’s going to help the grower.”

Technology suppliers don’t always come to the rescue. Kluemke says they tout products heavily, “but if it doesn’t put more bushels in the farmers bin or contribute to his bottom line, it’s not for us.”

Kluemke does appreciate how retailers can team up with suppliers for pilot programs on new equipment or software. Last season, Harvest Land tried John Deere’s AgLogic fleet/asset management system that utilizes GPS, cellular, and Web services. The coop’s central office handles all the company’s soil testing and dispatches sampling orders for the 25 locations — a huge logistical task for equipment and staff. “I took Deere’s advice to try this and now I won’t live without it.”

Understanding how to use complex precision technologies is another issue. Harvest Land has a full-time staff member devoted entirely to troubleshooting components that won’t talk to each other. And Co-Alliance’s Welch says the industry faces a void in ag technology employees that can provide sound agronomic recommendations to accommodate the VR seeding market. “There are not enough people to make maps to go into that equipment,” he notes.

Varied (red, yellow, green) manufacturers may make multiple upgrades on their equipment each season — and everyone who works with the data usually has to upgrade and change as well. “New systems don’t always talk to the old systems very well,” says Parks, and he has found some growers don’t want to risk upgrades messing up other parts of their systems. “You have to keep current the best you can and service farmers with different versions.”

Welch says getting all in-house precision equipment on the same page is worth the effort. The company has 60 variable-rate trucks, 95% of which are set up the same. “That helps with training and for troubleshooting,” he says.

Welch also sees challenges in selling some services to growers — in particular Co-Alliance’s new AgSure aerial imagery, which “is evolving into a more comprehensive scouting program and is very important as tied to the fungicide and seed segments of the business.” He says in difficult times, customers will spend money on products that offer immediate results and he sees AgSure being “flat” for the coming year.

Choosing whether to sell precision hardware/software can be a tough call. Co-Alliance carried GPS equipment for several years — until 2008. When the company exited the market, its agronomic services business grew 30%, “because we were able to focus on those services that will benefit growers,” says Welch.

In spite of optimism about the ’09 precision season, dealers still face market volatility. “Now that fertilizer prices have softened, fuel prices are down, and commodity prices are down, we’re in another cycle,” says Parks. “Getting producers to see the value in utilizing these technologies is a constant challenge, but it’s rewarding for those who can keep moving forward.”

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

Retail FacilitiesWaconia Manufacturing Builds Facility Designed For Speed, Efficiency
July 7, 2014
To make its new hub facility more efficient, Cooperative Elevator enlisted the aid of Waconia Manufacturing. Read More
EquipmentSummer Show Preview 2014: Superior Sprayers Take The Field
July 3, 2014
In this final installment of our coverage of the major categories of Big IRON that retailers can expect to test-drive at this summer’s events, here is a look at 19 sprayers. Read More
Scouting a soybean patch at Green Valley Ag.
EmployeesCropLife Compensation Survey: Battling Talent Drain
July 2, 2014
Retailers too often lose employees to companies outside of agriculture, while recruiting efforts are most often limited to competitors and other ag-focused organizations. Read More
HerbicidesDow AgroSciences Introduces SureStart II Herbicide
June 16, 2014
The enhanced formulation has improved viscosity and increased stability under heat and controls more than 60 high-anxiety grasses and broadleaf weeds found in corn fields. Read More
HerbicidesBASF Investing $270 Million To Expand U.S. Herbicide Production
June 11, 2014
BASF has invested more than $270 million to expand herbicide production capacities in the U.S., including more than 20 new products to be launched over next two years. Read More
EquipmentGPS: 25 Years And Still Growing
June 2, 2014
The evolution of global positioning systems applications in agriculture remains ongoing as the technology hits a notable milestone. Read More

Latest News

ManagementASA, FarmLink To Launch ‘Operation Benchmark̵…
July 25, 2014
The American Soybean Association (ASA) and FarmLink are teaming up to help farmers close the $11 billion gap between what they harvested in 2013 and what they could harvest annually. Read More
StewardshipNorthey: Farmers Commit $1.4 Million to Try New Water Q…
July 25, 2014
The practices that are eligible for funding include cover crops, no-till or strip till and using a nitrification inhibitor when applying fall fertilizer. Read More
Precision AgFarmers Learn How Changing World Will Impact Iowa
July 24, 2014
Technology and understanding global consumer demand for Iowa farm products brought hundreds of farmers and agribusiness leaders to Ames recently for the annual Iowa Farm Bureau Federation Economic Summit. Read More
HerbicidesPurdue: Late Season Weeds May Require Manual Removal
July 24, 2014
Hand-rouging and pulling late season weeds by hand may be the best way to remove them, more so than using a herbicide, a Purdue Extension weed scientist says. Read More
Soybean Field
InsecticidesTransform WG, Closer SC Insecticides Receive R&D 10…
July 23, 2014
Dow AgroSciences has received the award from R&D Magazine for Transform WG insecticide and Closer SC insecticide with Isoclast active. Read More
EquipmentKinze, Raven Team Up On 4900 Planter Monitor
July 23, 2014
Kinze Manufacturing announces a partnership with Raven Industries to develop a standalone monitor solution for the Kinze 4900 series planter. With this new Read More
LegislationNew Farm Bill Continues To Confuse As Growers Await USD…
July 23, 2014
The new five-year Farm Bill eliminates many of the direct payments previously payed to growers and could benefit from USDA clarification, reports a Toledo Blade columnist. Read More
EquipmentPrecisionAg.com Relaunches With Responsive Design For M…
July 22, 2014
PrecisionAg, the worldwide leader in precision agriculture information and analysis, announces the launch of its completely redesigned website, PrecisionAg.com. Read More
FungicidesEPA OKs Two Willowood Fungicides
July 21, 2014
The EPA has approved Willowood Azoxy 2SC and Willowood AzoxyProp Xtra. two widely used broad spectrum, preventative fungicides with systemic and curative properties. Read More
Precision AgFarmers Learning Fast As UAVs Take Off
July 17, 2014
Farmers and others interested in how UAVs can be used in agricultural applications were able to learn more about the technology during the recent Precision Aerial Ag Show. Read More
CropLife 100Bobby Knight, Richard Petty To Highlight Ag PhD Field D…
July 17, 2014
Attendees at the July 24 Ag PhD Field Day at Hefty Farms will learn about the latest agricultural technologies, and get a chance to meet legendary sports figures Bobby Knight and Richard Petty. Read More
WebinarsUpcoming Webinars
July 17, 2014
Register for one of our upcoming Webinars or access our archive of past Webinars to view recordings of presentations that may be of interest to you. Read More
A finished Willmar 16-ton side-shooting tender.
TendersNew Production Facility Helps Willmar
July 17, 2014
In 1963, a group of businessmen started Willmar. Today, a half-century later, the company is one of the ag industry’s longest-running brands. Read More
FertilizerCF Industries Sells Carbon Credits To Chevrolet, Donate…
July 17, 2014
CF Industries has completed the sale of a large block of carbon reduction credits to Chevrolet, and will donate the net proceeds of $600,000 to the National FFA Foundation. Read More
CropLife 100Grainland Cooperative, Minier Cooperative Grain To Merg…
July 17, 2014
The shareholders of Grainland Cooperative and Minier Cooperative Grain Co. approved a merger of company operations effective August 1, 2014. Read More
ManagementStudy: Drought Costing California Billions
July 17, 2014
A new study has found the drought has cost the state $2.2 billion, primarily in lost farm revenue and wages. Read More
FertilizerCF Industries Resumes Production At Oklahoma Nitrogen C…
July 17, 2014
The company had shut down production at the Woodward, OK, facility in April to address an issue in one of the site’s boilers. Read More
CropLife 100Wilbur-Ellis To Relocate Agribusiness Division To Denve…
July 16, 2014
The move Eastward will allow Wilbur-Ellis’ Agribusiness Division to be more accessible to relevant geographies and is expected to enhance communication and collaboration among the division’s nearly 3,000 employees. Read More