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

ScoutPro iPad
Precision AgWhat’s Trending In Soil Testing And Scouting
April 6, 2016
Keeping up on soil testing and scouting, especially following unusual weather conditions, can play a role in maximizing yields. Soil Read More
EquipmentDTN Launches Ag Retailer Focused Data Management Program
April 5, 2016
As farm data multiplies exponentially, ag retailers need help leveraging the power of big data to better serve their customers Read More
R4023 Sprayer, John Deere
EquipmentDeere’s Acquisition of Hagie: 3 Things We Learned
March 29, 2016
It seems like the biggest news stories in agriculture always break on a Tuesday. Today John Deere announced it had Read More
HerbicidesPrecision Ag, Weed Control Practices Both Key In Herbicide Resistance Fight
March 15, 2016
Integrating precision ag technology with long-time weed control practices may allow producers to increase weed control effectiveness, reports Loretta Sorensen Read More
Trending Articles
Eric SfiligojReasons For Hope In Commodity Prices
May 2, 2016
For many months now, the doomsayers have ruled the day in agriculture. Too much supply with too little demand would Read More
Eric SfiligojMissing The Family Ties In Agriculture
April 25, 2016
By its nature, the agriculture market is cyclical. Up and down cycles come and go with a regular pattern. For Read More
HerbicidesHerbicide Resistance In Waterhemp Continues To Grow
April 22, 2016
Twenty-five years ago, waterhemp was virtually unknown to Illinois farmers. Today, the broadleaf weed blankets corn and soybean fields across Read More
Eric SfiligojBiotech Corn Drop More Economics Vs. Consumer Rejection
April 18, 2016
Since their introduction into the agricultural marketplace, biotech crops has steadily grown in acreage in the countries of the world Read More
Crop InputsBayer: 5 Reasons We Disagree With Maryland Neonic Ban
April 12, 2016
We’re disappointed that the Maryland legislature chose not to stand up for sound science and the rights of Maryland’s homeowners Read More
Corn
OpinionChallenging Global Economic Conditions Putting More Heat On U.S. Ag Retailers
April 7, 2016
There it is. That vague, slightly sickening feeling in the pit of my stomach. Things are getting weird out there. Read More
Latest News
Young Corn Field
Crop NutritionEnhancing In-Season Nitrogen Use Efficiency Is In The D…
May 5, 2016
Spring is here and crops are in the ground. Do you have a plan for your nitrogen during the growing Read More
ID3 Air Induction Flat Spray Nozzle | Lechler
Nozzles2016 Nozzles And Tips Report: Waste Watchers
May 5, 2016
Every year in the spring, ag retailers and their grower-customers prepare for the coming crop season. This involves prepping crop Read More
Industry NewsHELM AGRO Adds New Marketing & Business Development…
May 4, 2016
HELM AGRO US, Inc. has announced the hiring of Troy Bettner as the company’s new Marketing & Business Development Leader. Bettner Read More
Palmer amaranth in soybean stubble
HerbicidesWSSA: Billions In Potential Economic Losses From Uncont…
May 4, 2016
What losses would corn and soybean growers experience if they were forced to eliminate herbicides and other control techniques from Read More
Spray Drift
HerbicidesRoundup Ready Xtend: Silver Linings In Label Delays For…
May 4, 2016
Since 2014, Monsanto has trained more than 20,000 growers and retailers on all aspects of its new dicamba-tolerant system at Read More
Syngenta headquarters in Basel, Switzerland
Crop InputsSyngenta Board Appoints New CEO
May 4, 2016
Syngenta announced today the appointment of J. Erik Fyrwald, currently President and CEO of the U.S. chemistry distribution company Univar Read More
Crop InputsIntrexon Establishes Crop Protection Enterprise
May 4, 2016
Intrexon Corp., a leader in synthetic biology, has announced the formation of Intrexon Crop Protection (ICP), a wholly-owned subsidiary dedicated to Read More
Patriot 4440 Sprayer close up
ManagementFlashing Back And Moving Forward On Spray Drift
May 3, 2016
The potential for pesticide drift remains an unavoidable feature of modern agriculture. Here, too, history repeats itself. “When Roundup debuted, Read More
Giant Ragweed
HerbicidesSurvey Provides Insights On Giant Ragweed In The Corn B…
May 2, 2016
A new survey published in the journal Weed Science offers insights into the distribution and management of giant ragweed, a Read More
Truck dumping dry fertilizer
FertilizerFertilizer Logistics Q&A: Southern States’ Joe Wlod…
May 2, 2016
Joe Wlodkoski, Director of Agronomy Procurement, Fertilizer, Southern States Cooperative, is a 40-plus year fertilizer industry veteran. He is quite Read More
Eric SfiligojReasons For Hope In Commodity Prices
May 2, 2016
For many months now, the doomsayers have ruled the day in agriculture. Too much supply with too little demand would Read More
West Central Dome structure
FertilizerFertilizer Logistics 2016: All Clear, So Far
May 1, 2016
After a relatively hairy early start to the spring fertilizer movement season with flooding in Louisiana and St. Louis, things Read More
BAICOR
CropLife 100BRANDT Acquires Utah Specialty Fertilizer Company
April 28, 2016
BRANDT, a leading agriculture retailer and manufacturer of specialty ag products, has acquired a majority interest in BAICOR, L.C. BAICOR, Read More
Soybean field
Industry NewsVerdesian Life Sciences Adds Vice President Of Business…
April 28, 2016
Verdesian Life Sciences has announced the addition of Marc Treurniet to the plant health and nutrition company’s management team. Treurniet Read More
ManagementBiotech Crops Developments and Millennials
April 28, 2016
Editors Eric Sfiligoj and Paul Schrimpf talk about the latest activities in biotech crops and a major shift in the Read More
Industry NewsNachurs-Alpine, Pathway Biologic Extend Marketing Agree…
April 28, 2016
Nachurs-Alpine Solutions (Marion, OH) and Pathway Biologic (Plant City, FL) announce an extension to their exclusive marketing agreement specific to Read More
MicronutrientsCharah Add Three Warehouses For SUL4R-PLUS Fertilizer
April 28, 2016
Charah, Inc., a total solutions company providing unparalleled service and innovation for the coal-fired power generation industry, announced today that Read More
Spenser Forgey, Yahama Fortix
FungicidesIndiana Farmer Wins Arysta LifeScience FORTIX Fungicide…
April 28, 2016
Arysta LifeScience North America recently presented Spenser Forgey, a grower from Young America, IN, with a new 2016 Yamaha Grizzly Read More