Decision Time: Buy The Planes Or Partner With Pilots

Aerial Application PlaneRetailers can meet grower demand for aerial application in a number of ways. Several CropLife 100 companies have chosen to invest in their own planes – in some cases purchasing entire aerial businesses – and to navigate the complexities that come with this service. Other retailers contract with local independent pilots to meet their growers’ needs.

Doing It Yourself

Let’s start with the plane. Some of the latest turbine aircraft with capacities of 500 gallons can cost more than $1 million. Then there are the expenses associated with maintaining the aircraft. Unscheduled engine overhauls, for instance, can cost as much as $300,000 depending on the complexity of the job, says Craig Bair, aerial SSE manager at Wilbur-Ellis Co. And don’t forget the hangar space needed for the plane.

Also consider staffing – you need a qualified pilot and a skilled mechanic nearby, as well as a trained ground crew. Pilots want to take a job with an operator that has a proven track record of being able to keep an aircraft and operator busy, says Bair. If there is not enough work for him in a trade area, a dealer will have to cultivate work elsewhere.

Pilots need to meet the requirements of state and local authorities to be cleared to conduct aerial application from the local airport. Then too, there are state and federal licenses to get in time to do aerial applications and the ongoing training needed to maintain them.

As for mechanical expertise? “There are not many aircraft mechanics familiar with the specialized equipment installed on the modern spray plane,” Bair warns.

Service expenses extend from personnel to a product and fuel delivery infrastructure and operating costs as well. And more funds are needed for liability insurance and safety measures.

One final financial aspect: consider proper depreciation lives for airframes and engines, says Loren Koeman, regional business analyst with Wilbur-Ellis Co. “Tax depreciation often does not match up well with actual lives of components.”

When Contracting Works

In light of the demands of owning and operating planes, most industry members we talked with thought contracting with an aerial business is the best way to provide air application, especially in the Midwest where the time frame for using the pricey equipment is so short.

“In the past we have talked with and done business with retailers that have tried both owning and contracting. In my personal opinion using a local aerial applicator is the best choice,” says Derek Shannon, Townsend Aviation, Monticello, IN. He says these pilots are usually experienced veterans.

Having control of the timing of applications for customers is one of the biggest concerns a retailer might have about contracting, but planning ahead is a great help. Mike Carrell, branch manager with Ceres LLP, Wingate, IN, says at winter meetings with customers, his company will often offer a prepay discount on fungicides. Customers will buy and request an aerial application, then Carrell can go to his aerial applicator to at least offer an initial idea of the number of acres to be serviced – so pilots can schedule accordingly. Tony Goede, aerial manager with BASF, estimates that 70% of the aerial application market is still last-minute, though pilots do have a feel for the volume of work that could hit their area.

Goede says the other biggest worry for retailers when hiring out for aerial work is trust – an issue that also emerged from our reader survey. “For years the ag pilot has simply been summoned in emergencies in Corn Belt geographies,” Goede says. The retailer has had limited contact with him, which decreases the chance to build a trusting relationship. The solution is to find a good ag pilot who takes the time to build relationships and who runs his business honestly.

Return on investment typically is not high with either owned or contracted planes, Koeman admits, but aerial application is definitely one way to differentiate a business from other retailers.

Leave a Reply

Aerial Application Stories

Aerial ApplicationAerial Application Special Report – Sponsored by Air Tractor
September 1, 2012
As the 2012 season winds down in the United States, the trend I’ve seen in previous years continues...more and more growers are choosing aerial application to control diseases and pests. Read More

Trending Articles

FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More
EquipmentNew Holland Acquires Miller-St. Nazianz
September 3, 2014
The assets of Miller acquired as part of the transaction will become part of New Holland Agriculture, a CNH Industrial brand, building on a successful four-year partnership between the two companies. Read More
CropLife 100Pinnacle Acquires East Kansas Chemical
September 2, 2014
Ranked 82nd on the CropLife 100, East Kansas Chemical will operate as part of Pinnacle's Performance Agriculture brand. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science Review
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More

Latest News

Equipment2014 Product Of The Year Voting
September 19, 2014
Many new products were introduced to the ag retail marketplace this year. From this group, CropLife IRON and its consulting partners have selected five finalists for the Product of the Year award. Please cast your vote today to help us determine the winner. Read More
Equipment2014 Farm Science Review Crowd Tops 2013 Show
September 19, 2014
The 52nd annual Ohio State University Farm Science Review welcomed more than 130,000 farmers, industry professionals, FFA students and agricultural enthusiasts during the three-day event. Read More
Seed/BiotechUSDA Approves Enlist Following Rigorous Review
September 18, 2014
Dow AgroSciences now awaits EPA registration of Enlist Duo herbicide, the companion herbicide to the Enlist traits, which is expected in the near future. Read More
BlendersYargus Appoints New Plant Manager
September 18, 2014
Steve Shaffer will direct and coordinate daily operations at the company’s Marshall, IL, manufacturing plant, where the Layco line of material handling equipment is produced. Read More
CropLife 100Pinnacle Acquires Kansas-Based Cedar Ridge Supply
September 16, 2014
Cedar Ridge Supply will operate as part of Pinnacle's Performance Agriculture brand. Read More
StewardshipSecretary Vilsack Highlights Innovative Conservation Ef…
September 15, 2014
Nearly $16 million in Conservation Innovation Grants (CIGs) will be awarded to 47 organizations to help develop cutting-edge ideas to accelerate innovation in private lands conservation. Read More
Seed/BiotechSyngenta Responds To Cargill Lawsuit
September 15, 2014
Syngenta believes that the lawsuit is without merit and strongly upholds the right of growers to have access to approved new technologies. Read More
Equipment2014 Farm Science Review Launches Mobile App
September 15, 2014
Smartphone and tablet users planning on attending the 2014 Farm Science Review can now download this year’s customized mobile application. Read More
CropLife 100Southern States Coop Grower Sets Georgia Soybean Yield …
September 15, 2014
Georgia farmer Randy Dowdy's soybeans yielded an astonishing 110.66 bushels per acre, crushing the previous record of 82 bushels-per-acre. Read More
NIMITZ Treated vs Untreated pepper plant
InsecticidesNIMITZ Nematicide Approved By EPA
September 12, 2014
NIMITZ is a novel, non-fumigant nematicide with simplified application features, user safety and an active ingredient with a unique mode of action. Read More
InsecticidesMarrone Bio Innovations Receives Patent For Chromobacte…
September 11, 2014
The patent is the first step for MBI in developing a commercially viable product to inhibit infestations of corn rootworm larvae across America and other regions. Read More
HerbicidesDow AgroSciences: Keeping The Pipeline Stocked
September 11, 2014
Dow AgroSciences is embracing product diversity to drive the company’s future. Read More
CropLife 100CHS Is Official Partner Of New St. Paul Ballpark
September 10, 2014
The new ballpark in St. Paul, MN, officially became CHS Field with Twin Cities-based CHS Inc. revealed as the naming rights partner. Read More
EquipmentHagie Honors Farming Stewardship Leaders
September 10, 2014
The Iowa Farm Environmental Leader award recognizes Iowa farmers as environmental leaders that are committed to healthy soils and improved water quality. Read More
Precision AgPlantBeat: Your Plants’ Pulse In The Palm Of Your Han…
September 10, 2014
A new agronomic monitoring and recommendation service from Phytech could rewrite the book on real-time plant health status monitoring. Read More
StewardshipCCAs Making Headway With 4R Program In Lake Erie Wester…
September 9, 2014
Certified Crop Advisers are implementing the 4R Nutrient Stewardship Certification program in Lake Erie's Western Basin to improve water quality. Read More
MicronutrientsMicronutrients Going Macro
September 9, 2014
Between 2014’s fantastic growing conditions and a heightened awareness on plant nutrition, the major players in micronutrients are gearing up for another big year. Read More
Crop InputsFMC Announces Cheminova Takeover
September 8, 2014
FMC Corporation today announced that it has signed a definitive agreement to acquire Cheminova, a wholly owned subsidiary of Auriga Industries. Read More