Gauging Profitability In Precision Ag
June 1, 2012 Dealers we talked with felt profitability of the precision ag services they offered ranged from questionable to booming. Gary Myers, YieldEDGE precision at manager at Landmark Services Cooperative, Cottage Grove, WI, points out that historically, the retail ag industry has had a difficult time figuring out how to charge for precision ag services.
Sean Nettleton, precision ag specialist, Wabash Valley Farm Service, Browns, IL, says these products serve as a consistent income flow, especially as compared to the past when soil testing services were billed per acre every four years.
Brent Wiesenburger, precision ag manager at South Dakota Wheat Growers Association, Aberdeen, SD, says his team can simply put a margin on the in-and-out mapping services they do — and they are black and white profit centers.
“But when it comes to variable rate application, we all struggle to see the payback at the retail level,” he believes. “It is very hard to determine the cost of extra tendering equipment as well as the extra cost of application equipment. I believe we are generating a profit, but we continue to work on the metrics to measure it internally.”
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