Opinion: ROI or Die in Precision Agriculture

The thought of $3.50 corn for the foreseeable future seems pretty disheartening. However, if you look at the precision ag space you might notice some light at the end of the tunnel.

We’ve progressed to a place where we are collecting volumes of good yield, planting, and as-applied data. However, when it comes to using this data beyond looking at a paper map, we really need to admit we haven’t been using it to its full potential. And by “we”, I mean both the precision ag specialist and the grower.

Current technology allows us to marry information layers with our financial information. We can then couple it with current grain markets to determine farm financial performance. This has become a must for any operation. In order for us to weather these lower commodity prices, we are going to need to know “the rest of the story,” as Paul Harvey put it. Preserving and re-allocating working capital within the operation is of utmost importance.

Here are some important working capital allocation questions to consider:

  • How is our VRT fertilizer application paying?
  • Is there another crop production scenario that would maximize ROI?
  • If I showed these improved projections to my banker, would he be a little more generous on my operating loan and the interest rate?
  • In a depressed grain market, what am I going to do differently this year in order to improve my outcome to survive to the next growing season?

Imagine being able to identify areas in a field that have been consistently losing $250+ per acre per year over the past 3 years or more. Or how about finding other areas of the farm have production capped at 230 bushels because that’s all you fertilize for? What if you could utilize the data you’ve already taken valuable time and money to collect to give you a better idea of where to spend that exact same $250 to maximize your ROI? How would this change your operation?

The technology to be able to put these layers together to generate profitability zones in a sub-field scale on a map is available and is the sort of tool that will be utilized by the growers who will find their way back to prosperity the quickest. With that in mind, take note of this:

Analyzing profit on a spatial basis trumps EVERYTHING else that we are currently doing in the precision ag space!

As you look at your data in a spatial profitability program, you will notice that yield is not the only major determining factor to profitability and you can potentially improve your profitability without raising more bushels by simply finding areas in your field where you are investing your money inefficiently. Yes, this might require taking a good, long look at the quality of your data; but for many growers utilizing a spatial profitability analysis program could literally mean the difference between staying in business or going broke!

Not every grower has the time or is tech savvy enough to do this effectively. The same can be said about doing taxes, and that’s why most of us hire accountants. If you struggle with something like inputting your data into any of the popular web-based GIS software programs, then it’s important to have someone from outside your operation to assist you using the wonders of modern ag-tech. Your trusted precision ag advisor, if equipped with the right tools, may be able to help you with this.

What is Wrong with Using Spreadsheets?

I know a lot of people say spreadsheets are a great tool to measure profitability. However, with the data layers we have collected showing sub-field placement of our variable inputs it’s clear that spreadsheets are unable to accurately measure the variable profitability within the field. The new technology is all about managing profitability on a sub-field basis and you will find that spreadsheets just won’t cut it as a way of measuring that. I officially thank spreadsheets for their years of service in helping us determine “whole field” or “whole farm” profitability, but now it is time for spatial profitability analysis programs to take over that role.

I know this may be a big change for people, but it’s no different than when we moved from typewriters to computers for word processing a few decades ago. A new piece of technology was developed and everyone adapted without looking back. This is exactly what is happening with new GIS software technology and the growers who adopt it first have an advantage over the ones who drag their feet in adopting this technology. I encourage you to talk to your trusted precision ag advisor and ask how to improve your working capital allocation and return on investment by using this new technology.

Leave a Reply

One comment on “Opinion: ROI or Die in Precision Agriculture

  1. Some fields or parts of the field will not yield 230 bu per acre no matter what you do. you have to look at if you invest a dollar are you getting more than a dollar ROI. I have a degree in GIS and most people are not ready to use GIS. in there operation.

Data Management Stories
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
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
Data ManagementClimate Adds Irrigation Data Analytics via HydroBio Acquisition, Will Expand to Europe in 2017
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
Growers Tablet
Data ManagementOpinion: The Yearly Death of Ag Data
May 1, 2017
So that headline sounds somewhat dark and ominous, doesn’t it? The thing about it is that it’s actually been happening 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