Precision Agriculture: Higher Profit, Lower Cost

Soybean growers are rapidly adopting precision technologies because they make their farming operations cost less, allowing them greater profit.

This is clear result of a recent survey of soybean growers conducted by the PrecisionAg Institute in cooperation with the American Soybean Association (ASA) to gain insight to the return on investment (ROI) for precision farming tools and technology. Information provided by growers surveyed shows that for those who use the technology well, there is rapid payback. In some cases, it is accomplished within one season.

Other key learnings:

  • Growers report an average savings of about 15% on several crop inputs such as seed, fertilizer and chemicals.
  • Savings on inputs often pays for the technology within a year for a large cropping operation and two to three years for smaller operations.
  • Growers are increasingly using precision tools to conduct their own comparisons on their own ground.
  • Findings show that most growers, particularly those with more than 500 total acres, are using several precision farming technologies.
  • The larger the acreage increase, the more likely the farmer is to use multiple precision farming technologies.

Experienced users of precision farming tools point out that you don’t have to go in “whole-hog” to reap benefits. Even one new technology can save you money and pay for the investment within a year or two, and it gives you a chance to try it out before adding more. One step at a time is the advice most advanced users offered in the survey, and buy the technology that addresses your highest costs first.

For example, seed is an input where costs have risen dramatically. Avoiding overlap with new technology not only reduces total input costs, but it also improves yields on acres that used to have poor production because of too much seed.

Precision Ag Is Profitable

In any given season, growers often find themselves ordering extra seed to cover their acres, but growers who use automatic clutches often return the extra seed, using exactly as much as their acres call for. The savings go directly into their pocket.

While growers who do not use precision technology believe that they can save money other ways, like buying at a discount, the combination of astute buying and precision application can save even more.

“It’s a big hurdle (cost), and its hard to get your noggin around it until you see it perform,” admits one grower from Kentucky. “But once you see it work, it’s a no-brainer.”

One of the findings of the qualitative interviews is that growers often calculate the return to their investments the first year, because they are paying closer attention. Once they know that they are saving money with the technology, the new cost figures become the baseline, and they quit thinking about how much they used to spend. This would suggest, too, that ROI for precision use in any given year is greater than most growers will readily express when asked.

Swath control and seed command can easily save 10% to 15% in seed costs. The heavier you plant, the greater the savings. Payback can be within the first year for larger growers, two to three years for smaller growers.

Whole-Farm Experiment Stations

The traditional pushback on university research is that it doesn’t happen in the real world. Farmers often complain that one acre or even 10-acre plots are no match for whole field information.

But precision technology allows growers to turn this one around, encouraging farmers to conduct whole field experiments on their farms. Sometimes they are doing it on their own, other times they are actively participating in industry and university programs designed to put together real world results. Organizations like Iowa Soybean Association, with its On-Farm Network are coming alongside precision ag users to learn more about a variety of farming practices on the farmer’s own ground. This is the nature of precision agriculture, gaining more specific knowledge for MY operation on MY ground under MY conditions. The enabling technology? Precision farming tools such as yield mapping.

One grower is testing fungicide applications on corn, having previously tested fungicide applications on soybeans.

“I am testing it on one field, one round with the fungicide, one round without, so I can see the results,” he explained. “At $25/acre, I want to know that it pays.” He said this test will allow him to make a more informed decision about the ROI on treating more.

“It will allow me to see if I want to spray 3,000 acres. It would cost $75,000 to spray the whole thing and I would like to see the results before I commit to that kind of money.”

What is the implication for input companies? Be prepared to prove your products in the field with real data generated by your customers. This same implication holds for dealers as well. Direct in-field comparisons are possible, and many of your farmer-customers are not going to want to settle
for your smaller plots along the state route.

Some growers surveyed are now routinely planting half of their planter to one variety and half to another. Yield maps show which one did best, and make decisions for next year easier. But growers can also use variable-rate and automatic boom control to test the effect of fungicides or fertilizer rates on yield, moisture content, and other factors. All it takes is the time to enter the proper data when you are applying the materials and taking a look at your yield maps at the end.

No longer do farmers need to “think” something helped their yield or was a waste of money. Now they know. And the more they know, the more they want to know. While every year is different, growers applying scientific methods have a better way to determine their inputs, not just conventional wisdom or someone else’s research results.

ROI For Precision: Not Just Dollars

But for all the savings and potential increases in yield, many farmers point out that precision farming tools make farming less stressful, and the long days not as hard on their back, shoulders and disposition. Tools like auto steering means that growers can spend more time monitoring field activities rather than steering a straight line.

It also means practices like strip till are practical for more growers, as RTK signals can keep planters where they need to be for the best results.

“I always said, oh, we don’t need it, but the auto steer really has reduced our stress,” said a grower from North Dakota. “And our fields are straight wand square, so we probably don’t see quite the input savings that
other guys would.”

Growers have a difficult time calculating increased yields unless it’s to physical changes made, such as increased tiling to improve field drainage. Typically, 80-foot spacing in a field was considered well tiled, but now growers are moving to 40-foot spacing to increase drainage and improve overall yields. This move was brought about by yield maps that show advantages to more drainage.

Yield differences can not be attributable to much of anything specific, unless the maps change. Maps show significant changes in yield when tile is added, or seed overlap is eliminated.

Easy-to use? Yes. But still a ways to go.

While growers are using the technologies in the market place, they would like to see them more user friendly.

The average age of soybean growers that responded to the survey is 54, and while some have sons or consultants to help, 80% do all the evaluation, purchase and use of precision technology by themselves.

Instruction is often hard to come by, and trial and error just doesn’t cut it when there’s work to be done. Unfortunately, it’s hard to learn and retain working with the systems when they are used for three weeks at a time, three times per year. Growers would like to see more training offered, as well as opportunities to share their experiences and learn from other farmers in the same situation.

While the results show that farmers can use more instruction and education to fully utilize the benefits of the technology, as tangible benefits and increased input costs appear, adoption is spreading quickly through all sizes and ages of farmers and will continue in the future because of the numerous cost benefits the technology offers. The good news is that 63 percent of those surveyed indicate that precision technology is either “fairly easy to use,” (41%); “easy to use” (20%) or “very easy to use.”

But very few growers report that precision technology is “very easy to use” (2%).  And, nine percent say it’s “not at all easy to use.” This, of course will be a challenge to the equipment and service providers in the days to come.

Why? Well, consider the number of smart phones found in farmers pockets these days, not to mention the number of tablet computers showing up in pickups these days. They cannot help but compare their user-experience with precision technology with that of the mainstream devices they are carrying everyday.

Growers are demanding the same ease of use of their farming technology as they see in the consumer products they use. Making systems talk to each other so that data is only entered once and shifts to everywhere it needs to be is many a grower’s dream.

Both crop input and machinery dealers can increase their roles too, as farming becomes more specialized.

It’s nearly impossible for growers to do everything necessary to be as successful as they can be. Very large operations hire specialists, but growers with fewer acres need the same expertise, just on a smaller scale. Dealers can meet this need for expertise and experience, plus provide opportunities for grower to grower contact, because as high-tech as farming gets, it’s still a high-touch business.

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