The State Of Precision Agriculture 2011

The precision agriculture marketplace remains a dynamic, ever-evolving sector of the agriculture world. While some technologies have stayed fairly constant in their adoption rates, others have grown substantially in the past few years.

After a year off, CropLife® magazine and Purdue University’s Center for Food and Agricultural Business took another look at precision agriculture technology adoption by retail crop input agricultural dealerships across the U.S. This survey was first conducted 16 years ago, when precision technologies were just entering the market with exciting, groundbreaking opportunities to take agriculture to new levels. After 16 years, the biggest change that has occurred is that many of these methods of serving the agricultural community and growing crops have become so common place that they aren’t thought of as unique any more. However, the rapid improvements in technologies and how they’re implemented into everyday business continues to grow.

In 2009, the economy was struggling and some of the impact of that was somewhat seen in the survey results. But this year’s agricultural economy is booming, certainly on the crops side, and the future growth that survey respondents see in many technology areas reflects this. Also, since many of today’s precision technologies are related to cost savings as much or more than production increases, the cost of inputs related to the cost of the technology remains a primary driver.

As in previous years, a questionnaire was sent to 2,500 CropLife dealership readers to “take the pulse of the industry” with respect to precision technologies. Questions were asked about precision technologies used in the dealership as well as precision services offered to customers. Dealerships were also asked how profitable these services were compared to traditional custom application.

How Dealers Are Using Precision Technology

As in the past few years, the most commonly used precision technology within the dealership were GPS guidance systems. Use of manual systems (i.e., lightbars) dominated in years past, but autoguidance systems have been rapidly catching up. Autoguidance use continues to increase, but this is the first year to see a decrease in manual systems. Since the two systems have complementary functionality but with autoguidance offering more, this is a natural progression in adoption. Manual control guidance systems dropped from a high of 79% of survey respondents in 2009 to 66% in 2011. At the same time, use of automatic control/autosteer for fertilizer/chemical application increased from 53% of the respondents in 2009 to almost two-thirds of the dealerships who responded in 2011 (64%). Approximately the same number of respondents used both types of manual and automatic control guidance systems within their dealership as two years ago (47% compared to 49% in 2009); a third used only one type of guidance system and 22% of the dealerships didn’t use either type of guidance system.

One surprising result of asking dealerships how they use precision technologies within their dealership was that the dealerships who said they were offering precision agronomic services for customers (such as soil sampling with GPS, GIS field mapping, etc.) dropped from 65% down to 58%. The drop in service offerings did not correspond to a similar drop in specific services in a later question, suggesting that as technologies become more integrated into business, dealerships don’t specifically market them as “precision” or even consider them in a separate category anymore — it’s more an understanding that that is how it’s done.

A technology that’s been available commercially for just the last few years (but a new survey question) is whether or not dealerships used a GPS-enabled sprayer boom section or nozzle control. Almost four out of 10 respondents indicated they were (39%).

Various diagnostic tools were asked about: Soil electrical conductivity mapping, other soil sensors for mapping, mounted on a pickup, applicator or tractor (such as a pH sensor), chlorophyll/greenness sensors mounted on a pickup, applicator or tractor (like Crop Circle, GreenSeeker, Yara N-Sensor, etc.). Of the three types of sensors, the most common one used was soil electrical conductivity sensors, used by 13% of the respondents. Chlorophyll sensors were used by 4% while other soil sensors mounted on equipment were used by less than 3% of the respondents. There was little change from 2009 on these latter two types of tools.

Other uses of precision technology included satellite imagery for internal use within the dealership (31% of the dealerships), fieldmapping with GIS for legal, billing or insurance purposes (30%), GPS to manage vehicle logistics, tracking location of vehicles and guiding vehicles to the next site (16%). Telemetry to send field information to the home office from the field continues to hover well below 10% of the dealerships responding.

Only 15% of the respondents said they were not using any of these precision technologies in their businesses. Figure 2 shows the trends in the use of these technologies since 2003. The biggest growth in technology has been in GPS guidance systems, with the growth much more prominent this year for autosteer/control. Since 2005 when GPS guidance systems with automatic control really started taking off, use has increase almost 10-fold — from 6% of the respondents in 2005 to almost two-thirds this year (64%).

The other areas have shown a slow but steady growth, with the exception of GPS guidance with manual control/lightbar and precision services offerings, both of which have declined this year.

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, likely due in part to different annual samples of survey respondents. This year, several precision service offerings showed some decline, with both soil sampling with GPS and field mapping with GIS declining for the second time in a row. This may reflect increasing options for dealerships to contract these services to other providers so the service no longer is directly within the dealership. Or it may reflect the difficulty that some dealerships have experienced in accurately capturing field nutrient variability with grid or zone approaches, and subsequently demonstrating the value to their customers from variable-rate nutrient applications.

Dealers are expecting to add more precision services in the next three years, with modest growth expected through 2014 for all precision services.

Precision application service offerings remained relatively stable from 2009 to 2011. However, reflecting improvements in technology and information, variable seeding rates with GPS has continued to finally grow at a quicker pace since 2007, increasing from 6% of the respondents offering the service in 2007 to 23% in 2011. Part of what might be driving this is that it is much more common for new planters to come equipped with variable-rate technology.

All precision service offerings are expected to continue to grow over the next three years, but both controller-driven single-nutrient application and multi-nutrient application are slowing down while variable seeding with GPS is expected to be picked up by another 50% of dealerships over the next three years.

Profitability

Despite the ups and downs of the economy the past few years, the profitability of precision agricultural services remains fairly constant over time. As in 2009, 43% of the respondents felt that overall, they were either covering their fixed and variable costs for their total precision package or they were making a profit. Despite that, none of the components of a precision technology package can come close to the profitability of a traditional custom application service, where over 70% of the respondents said their dealership was at least covering fixed and variable costs or they were making a profit.

Soil sampling with GPS and controller-driven single nutrient application were the next highest components in terms of profitability, with almost half saying they were at least breaking even with the services.

Expected Investment

Compared to 2009, when the economy was beginning to falter there is an expectation for more investment in precision technology in 2011. Thirty-nine percent of the respondents expected to invest more than $25,000 in precision technologies in 2011, compared to only 32% in 2009. Approximately 20% did not intend to invest anything in precision technology. This is consistent with some other data that suggests approximately 1/5 of the dealerships are not getting involved with precision technology at all — whether it’s because of their size or their location or some other reason.

Summary

With the current high demand for agricultural products, dealerships are continuing to increase their investment in precision technologies. However, some of it appears to be becoming status quo for the basic service offerings and technologies as the improved information and data becomes integrated into everyday business decisions for growers and dealers alike.

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

Top 100 Articles

CropLife 100CHS: Driving Momentum To Help Farmer-Owners Grow
December 11, 2014
CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, must capture new opportunities to Read More
CropLife 100BRANDT, Verdesian Ink Distribution Agreement
December 9, 2014
The agreement grants BRANDT the exclusive right to sell and market Verdesian’s patented Steric chemistry in the Turf and Ornamental and eastern U.S. ag markets under the BRANDT Reaction product line name. Read More
CropLife 100CropLife 100: The Colors Of Custom Application
December 5, 2014
Although many color spray rigs are in the yards of the nation’s top ag retailers, the majority of them still come in only a few shades. Read More
CropLife 100Pinnacle Invests In Meridian Agriculture Distribution
December 4, 2014
Meridian will provide retailers with supplier-branded products and numerous opportunities to differentiate themselves from their competitors. Read More
CropLife 100CropLife 100: Entering A New Seed Era
December 4, 2014
The seed category has been re-vitalized during the past few years, and more good news (and varieties) are headed the industry’s way in 2015. Read More
CropLife 100CropLife 100: The Depressed State Of Fertilizer
December 3, 2014
Following downright giddy growth earlier this decade, fertilizer sales have fallen back down to earth the past two years. Read More

Latest News

Seed/BiotechKaren Arthur Joins AgriThority As Seed Treatment Produc…
December 19, 2014
Prior to joining AgriThority, Arthur directed research and development programs, overseeing laboratory and field research, to build the Valent U.S.A. seed treatment portfolio. Read More
EquipmentJohn Deere To Sell Crop Insurance Business
December 19, 2014
Deere & Co. has reached a definitive agreement to sell its crop insurance business, subject to regulatory approval, to Farmers Mutual Hail Insurance Co. of Iowa. Read More
Crop InputsNufarm Fills Regulatory VP Position
December 18, 2014
Nufarm announced today that Rob Schwehr has been promoted to the position of Vice President of Innovation & Regulatory Affairs for Nufarm Americas. Read More
Seed/BiotechReport: China Approves Viptera Corn, U.S. Officials Awa…
December 17, 2014
Chinese authorities have informed some agriculture industry officials the government has approved U.S. imports of a type of genetically modified corn developed by Syngenta. Read More
FertilizerMonty’s Plant Food Brings In New Sales Rep
December 16, 2014
Monty's Plant Food Company has hired Warren Kearns as its newest Sales Representative for the South Carolina area. Read More
EquipmentHagie Wins 2014 CropLife IRON Product Of The Year Award
December 15, 2014
The self-propelled sprayer maker has a hit on its hands with the new STS Series model. Read More
Syngenta
Seed/BiotechSyngenta Sees China Approving Contentious GMO Corn Soon
December 15, 2014
Syngenta will make an announcement when it receives official documentation from China that Agrisure Viptera corn, known as MIR 162, has been cleared for import. Read More
Crop InputsVerdesian Life Sciences Names Vice President Of Communi…
December 15, 2014
Amy Bugg will oversee the execution of all promotional strategies for the corporate brand and the complete product portfolio. Read More
StewardshipFarmers, Retailers Attend 4R Certification 4U Workshop
December 15, 2014
More than 160 farmers and ag retailer attended the “4R Certification 4U” workshop December 12 to learn more about the 4Rs of nutrient stewardship, water quality research in the area and cost-sharing opportunities. Read More
Matt Hopkins10 Best New Agriculture Apps For 2015
December 15, 2014
These new agriculture apps are certain to help ag professionals do their jobs more efficiently in 2015 and beyond. Read More
ManagementARA Learnings, Retail Buying Intentions: Welcome To Cro…
December 12, 2014
This informal video program puts news and events effecting retailers into context, and features Editors Paul Schrimpf and Eric Sfiligoj. Read More
Seed/BiotechMonsanto Herbicide-Tolerant Technology Closer To Commer…
December 12, 2014
The final EIS moves Monsanto one step closer to the introduction of Bollgard II XtendFlex cotton and Roundup Ready 2 Xtend soybeans, paving the way to provide access to dicamba-tolerant soybeans and cotton. Read More
Seed/BiotechUSDA Issues Final Environmental Impact Statement On Her…
December 12, 2014
The USDA Animal and Plant Health Inspection Service (APHIS) is issuing a final environmental impact statement on varieties of cotton and soybeans that have been genetically engineered for resistance to several herbicides, including the one known as dicamba. Read More
CropLife 100CHS: Driving Momentum To Help Farmer-Owners Grow
December 11, 2014
CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, must capture new opportunities to Read More
LegislationARA Applauds CFATS Passage Prior To Holiday Adjournment
December 11, 2014
The streamlined bill provides a four-year authorization of the CFATS program and guidance to DHS on key issues of chemical facility security Read More
Seed/BiotechBayer CropScience’s ILeVO Approved By EPA
December 11, 2014
EPA has approved ILeVO, the only seed treatment that protects the root system against infections caused by the Sudden Death Syndrome fungus and has activity against dangerous nematodes. Read More
Biologicals in Emerging Markets Map.
Crop InputsBiocontrols Could Quadruple By 2025; Will Regulators Pl…
December 11, 2014
The European experience with GMOs offers caution — and a promise — for biologicals. Read More
Crop InputsBASF Donates $75,000 To Feeding America
December 10, 2014
The donation will support Feeding America’s National Produce Program, an initiative that helps with planning, transportation and logistics to ensure fresh produce deliveries to the 200 member food banks around the country. Read More