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
Top 100 Articles
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Grain Shuttle Loading Facility
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More
CropLife 100GROWMARK Acquires Missouri Refined Fuels Terminal
April 2, 2015
Bloomington, IL-based GROWMARK and Magellan Pipeline Co. have entered into an agreement in which GROWMARK will acquire the refined fuels Read More
CropLife 100Wilbur-Ellis Acquires South Dakota Retailer
April 2, 2015
Wilbur-Ellis Co.’s Agribusiness Division, a recognized leader in precision agriculture technology and the distribution and marketing of plant protection, seed Read More
CropLife 100The McGregor Co. Closes Smith-Kem Acquisition
April 2, 2015
The McGregor Co. — ranked No. 16 on the CropLife 100 list of largest U.S. ag retailers — has completed Read More
CropLife 100BRANDT Commemorates National Ag Day
March 20, 2015
The Illinois agriculture community gathered at BRANDT global headquarters on March 18 to celebrate National Ag Day behind this year's theme Sustaining Future Generations. Read More
Latest News
Cornfield near Sioux City Iowa
HerbicidesU.S. Regulators May Start Testing Food For Glyphosate R…
April 21, 2015
U.S. regulators may start testing food products for residues of the world’s most widely used herbicide, EPA told Reuters’ Carey Read More
FungicidesBRANDT Adds Zonix Biofungicide To Portfolio
April 21, 2015
BRANDT has added Zonix biofungicide to its rapidly expanding line of organic and sustainable products. Zonix is a contact fungicide that Read More
ManagementMissouri Experts: Spring Planting Slow Start Won’…
April 20, 2015
In the first of the agronomy teleconferences with Extension specialists, University of Missouri Extension climatologist Pat Guinan said the slow Read More
Carl Casale of CHS
Industry NewsCooperative CHS Reports Net Income Of $471.5 Million Fo…
April 20, 2015
CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, has announced company net income Read More
Industry NewsCHS Insurance Names New Director Of Sales
April 17, 2015
Bryan Lewis has been named director of sales for CHS Insurance, the nation’s largest agribusiness insurance broker and full-service insurance Read More
Mature Waterhemp in Corn
HerbicidesGenetic Literacy Project: There’s No Such Thing A…
April 17, 2015
Read the latest “analysis” on GMOs from Consumer Reports and you’ll “learn” that glyphosate, the chemical developed by Monsanto (its Read More
HerbicidesNew Resistance To 2,4-D Discovered In Australia
April 17, 2015
In a world-first case of herbicide resistance, researchers have confirmed that sowthistle weed in the south east of South Australia Read More
ManagementNews From RTP Company Visits and Growers Buying Older S…
April 16, 2015
Paul Schrimpf and Eric Sfiligoj discuss recent trips to the Research Triangle Park area and market seed sales trends. Read More
soybean field
StewardshipNew ASABE Standard Establishes Framework For Sustainabl…
April 16, 2015
The American Society of Agricultural and Biological Engineers (ASABE) has initiated a project to develop a new standard to establish Read More
MicronutrientsSouthern States: An Inside Look At Our Tissue Sampling …
April 15, 2015
Remember learning about the food pyramid in school? The nutritional diagram recommends the proper amount of nutrients you need on Read More
Industry NewsArysta Adds New U.S. Fungicides Marketing Manager
April 15, 2015
Arysta LifeScience North America recently hired Deneen Sebastian as its Marketing Manager for U.S. Row Crops, Fungicides. Most recently, Sebastian Read More
FungicidesVerdesian Launches Phosphite-Based Cereal Fungicide
April 14, 2015
A new, phosphite-based fungicide designed for improved suppression of deoxynivalenol (DON) in wheat and barley infected by Fusarium head blight Read More
Mature Waterhemp in Corn
HerbicidesSURVEY: Close To 90% Of Growers Battle Weed Resistance
April 14, 2015
Herbicide resistance management continues to be a priority for corn and soybean growers, and they’re working together more effectively to Read More
CropLife 100Pinnacle Agriculture Acquires Minnesota Retailer
April 14, 2015
Pinnacle Agriculture Holdings, LLC, ranked No. 6 on the CropLife 100,  has successfully acquired Liebl Ag, LLC in Ada, MN.  Read More
StewardshipFMC Corp. Joins Sustainable Agriculture Alliance
April 14, 2015
FMC Corp. has joined Field to Market: The Alliance for Sustainable Agriculture, a multi-stakeholder initiative working to define, measure and Read More
Industry NewsArysta Adds Two To Goëmar Sales Team
April 14, 2015
Arysta LifeScience North America recently announced two new additions to the Goëmar sales team: Steve Kelly, Technical Service Manager – Read More
Valley Variable Rate Irrigation
Precision AgVariable Rate Irrigation Gains Followers
April 14, 2015
Irrigation systems have had the ability to apply different amounts of water throughout a field for decades, using timers that Read More
CropLife 100CHS, Aurora Cooperative Complete Fertilizer Storage, Gr…
April 13, 2015
CHS Inc., the nation’s leading cooperative and ranked No. 5 on the CropLife 100, and Aurora Cooperative (ranked No. 21) Read More