Precision Agriculture And The Turbulent Times

With so much news about a turbulent economy, one can not help but wonder how recent events would impact precision agriculture innovation worldwide.

But before plunging into some thoughts about global precision agriculture, I did want to share an interesting bit of analysis, which maybe is not too surprising given the recent economic picture. A good friend of mine, who is also a client from a Texas cooperative, recently shared some analysis he had performed on possible production scenarios for the 2009 growing season. He was particularly interested in a grower’s probability of being profitable for different crops (corn, cotton, soybeans, sorghum, wheat, and rice) given recent trends in spending and earnings. As part of his analysis, he entered realistic costs for seed, fuel, materials, etc. in addition to labor, rent, and depreciable items. He then entered the expected revenue for each crop based on average yield projections.

What he found was that growers in his region of Texas could barely make a profit with corn, make some profit with sorghum, and make the most profit with rice about half the time (one out of two years). In other words, a grower had a 50-50 chance of making a profit in any given year for three out of the six analyzed crops. If he increased the probability of being profitable (or lowering risk) to three-quarters of the time (three out of four years), then only rice was profitable. While the remaining crops (cotton and soybeans) could be profitable at unacceptable low probabilities (high risk), wheat was never profitable.

The lesson learned from my friend’s analysis is that with increasing costs, tightening credit accessibility, and variable revenues due to economic instability, we may have reached a point in certain geographies of this country where crop production is just barely viable.

Negative Factors

And how does this affect precision agriculture? I believe the economic turbulence affects precision agriculture in both negative and positive ways. On the negative side, when production becomes marginally profitable, growers, especially those reliant on bank loans, shift into a cost-cutting mentality. The first cut is always information services, even at a time when such services would be invaluable.

The gut logic is that information will not fuel any equipment or protect any crops from pests. Information is simply seen as unnecessary expenditure in tough economic times. In many instances, this cost-cutting mentality is dictated by lenders. Besides outright rejection, there will also be some entrenchment. Even growers who were “early adopters” of precision agriculture innovations tend to dig in their heels and not try new ideas. They become more conservative because taking chances on something new costs money even if there is a likelihood of positive payoff. Proven, cost-effective technologies become the rule of the day, while innovations tend to be put off until better times.

Positive Perspective

Now there are positive ways that a turbulent economy helps precision agriculture.

I see two long-term driving forces that are favorable to precision agriculture, even in trying economic times. First, people have to eat. The increasing demand for food by a growing world population will support a global agricul-ture industry. While our traditional production practices will be challenged by a changing economic world, new ones will arise and be empowered by technologies like precision agriculture.

Starting first at a few locations with small numbers of growers, these new production systems will contribute to establishing new, stable local economies. During this trial and error period, a tremendous amount of experimentation will take place, with the most successful production systems taking root in different geographies. In short order, profitable approaches will be copied and stable and local economies would scale up and impact regional and national systems.

The second driving force is regulation. Many traditional production practices have been at odds with urbanization and the environment. In order to bring about a balance, state and federal agencies will apply financial resources to guide growers towards more socially acceptable practices. In uncertain times like today, regulation will be viewed by many as the easiest solution for providing stability. As production practices become more regulated, precision agriculture can provide the required monitoring and management tools. It can also help automate the submission of information demanded by regulation.

Underlying this discussion about precision agriculture in a turbulent economy is the need for innovation. Because of the sheer number of new ideas being tried in different crop production systems and geographies, innovation becomes our best safeguard in economically troubled times. In some sense, innovation over a large area in just a brief period of time is equivalent to innovation occurring over a very long time in just one location. We all benefit in the short term when many individuals in different places are engaged in a creative activity like precision agriculture. Let us learn from each other, so that this difficult economic period we are experiencing today will be short-lived and be the start of a better future.

Leave a Reply

Business Management Stories
GPS, Guidance
Business ManagementPromoting Precision Agricultural Innovation in a Risk Averse Marketplace
April 24, 2017
As precision agriculture consultants we constantly are being asked our opinions on where to invest, and how to strategically invest Read More
Business ManagementBionic Leaves: Future Source of Endless Fertilizer?
April 21, 2017
*Article Notes: This monthly column takes some crazy sounding ideas and applies them to the field of Ag Tech. The Read More
Ag Retailer and Grower WinField United
Business ManagementMirror Mirror on the Wall, Who is the Most Trusted Ag Advisor of Them All?
April 4, 2017
Who is the most trusted ag advisor of them all? It’s a question I think we’ve all heard before, mind you Read More
Erich Eller ForeFront Ag Solutions with Ag Eagle-drone
Business ManagementForeFront Ag Solutions: Going Beyond The Averages
March 22, 2017
He’s flying essentially solo these days with business support from his wife Jennifer, but Erich Eller has big dreams for Read More
Trending Articles
Farming iPad
Data ManagementOpinion: ROI or Die in Precision Agriculture
May 12, 2017
The thought of $3.50 corn for the foreseeable future seems pretty disheartening. However, if you look at the precision ag Read More
BASF Maglis grower retailer tablet
Data ManagementQ&A: What BASF’s Latest Foray into Precision Ag Means For Growers
May 11, 2017
In late April, BASF agreed to acquire U.S. precision ag player ZedX, a leader in the development of agronomic weather, Read More
Mung beans Australia
Ag Tech GlobalPrecision Ag in a Tough Season in Australia
May 8, 2017
This year’s summer crop season has been a tough one for most growers in Australia. Prolonged periods of high temperatures Read More
GPS, Guidance
Business ManagementPromoting Precision Agricultural Innovation in a Risk Averse Marketplace
April 24, 2017
As precision agriculture consultants we constantly are being asked our opinions on where to invest, and how to strategically invest Read More
Data ManagementInnovation Series Highlights: The Weather Company’s Rob Berglund on Cognitive Computing
April 19, 2017
Rob Berglund, global director of sales, energy and agriculture at The Weather Company, discusses IBM’s Watson and applications for advanced analytics that will fundamentally change Read More
Corn close up
Data ManagementFarmers Business Network Releases State of the Industry Style Report
April 17, 2017
Farmer’s Business Network (FBN) released today its “The Voice of the Farmer”, a special research report on the state of Read More
Latest News
BASF Maglis Grower Tablet
Data ManagementData as Currency in Ag: We Aren’t There Yet
May 25, 2017
A hot topic in the precision ag revolution is the idea ag data will become a form of currency. Many Read More
Ag Tech GlobalSci-Fi in Ag: The Waging War of Plant-Internet Bots
May 25, 2017
Article Notes: This monthly column takes some crazy sounding ideas and applies them to the field of Ag Tech. The Read More
Food IT Fork-to-Farm
Hort TechThe Mixing Bowl Event Connects Technology, Food, and Ag…
May 24, 2017
For the fourth consecutive year, The Mixing Bowl presents FOOD IT, under the theme “Fork to Farm.” Action-oriented entrepreneurs, industry Read More
Nematodes in cotton
Ag Tech GlobalUsing Precision Agriculture to Manage Nematodes in Braz…
May 22, 2017
As promised in my first article, this month I am writing about some technical aspects related to the use of Read More
Farmers on Tablet Photo Credit All About Food
Professionals6 Keys of Successful Precision Agriculture Tools
May 17, 2017
As precision agriculture professionals we are frequently approached by companies that wish to partner with our organization in order to Read More
Hagie sprayer
GuidanceWhat’s New and What’s Next from Hagie Manufacturing
May 16, 2017
Many were surprised by John Deere’s announcement last spring that it had acquired majority ownership of Hagie Manufacturing Co., a Read More
Hortau Irrigation Management Software
Ag Tech GlobalHortau Commemorates 15 Years in Ag Tech
May 15, 2017
Today, Hortau celebrates its 15-year anniversary as one of the pioneers in the AgTech space, according to a press release Read More
Kip Tom
Ag Tech GlobalAg Tech: On the Cusp of Something Big?
May 15, 2017
The investment and ag-tech sectors’ continuing courtship of agriculture, smoldering for three or four years now, was well in evidence at Read More
Farming iPad
Data ManagementOpinion: ROI or Die in Precision Agriculture
May 12, 2017
The thought of $3.50 corn for the foreseeable future seems pretty disheartening. However, if you look at the precision ag Read More
Ag Tech Global2017 International Tomato Congress Features Ag Tech Ses…
May 11, 2017
The International Tomato Congress has taken place in Mexico since 2006. In 2017 it will celebrate its twelfth year as Read More
Ag Tech GlobalVenture Capital News: Aerial Imagery Outfit Garners $5 …
May 11, 2017
Ceres Imaging, an aerial spectral imagery and analytics company serving the agricultural sector, today announced it has raised a $5 Read More
BASF Maglis grower retailer tablet
Data ManagementQ&A: What BASF’s Latest Foray into Precision Ag Mea…
May 11, 2017
In late April, BASF agreed to acquire U.S. precision ag player ZedX, a leader in the development of agronomic weather, Read More
DronesSentera Phoenix Drone Nears Coveted 1,000 Acre Coverage…
May 11, 2017
Sentera introduces its Phoenix fixed-wing drone product line, with variants to support the precision agriculture, mapping, and public safety industries, Read More
Data ManagementClimate Adds Irrigation Data Analytics via HydroBio Acq…
May 9, 2017
Today, The Climate Corporation, a subsidiary of Monsanto Co., announced the acquisition of HydroBio, an agriculture software company based in Read More
GuidanceTersus adds RTK-Based AutoSteer System to GNSS Offering…
May 8, 2017
Tersus GNSS Inc., a Chinese GNSS RTK manufacturing company, released its brand new AutoSteer solution recently. The AG960 AutoSteer System Read More
DronesAgEagle takes on the Big Boys with RX48 Fixed Wing Dron…
May 8, 2017
AgEagle Aerial Systems of Neodesha, KS, today announced a fixed wing drone for the use in precision agriculture that far Read More
Mung beans Australia
Ag Tech GlobalPrecision Ag in a Tough Season in Australia
May 8, 2017
This year’s summer crop season has been a tough one for most growers in Australia. Prolonged periods of high temperatures Read More
SDWG Bret Weisenburger
Decision Support SoftwareMZB Launching New Grid Tool, Updated Mapping Center
May 3, 2017
MZB Technologies has added an additional tool to its precision system. Known for its patented zone-based precision technology, MZB will Read More