Precision Ag Survey: UAV, Variable-Rate Seeding Services Expected To Increase Significantly Among Retailers

There’s little denying that the precision agriculture market is fast-paced and rapidly evolving, as any sector so heavily tied to technology tends to be. But is its reach across the whole of the agricultural landscape expanding or merely holding its own?

PrecisionAg’s sister magazine, CropLife® magazine, has endeavored to answer this question — and many others along the way — throughout 2015 with a series of ag retailer/grower-customer surveys. Here, we present some of the findings from these efforts.

The first of these attempts to gauge the pulse of the precision agricultural marketplace was the 17th CropLife/Purdue University Precision Adoption Survey. This was sent out to participants during the early part of 2015, with more than 260 surveys being returned for tabulation. Purdue University’s David Widmar, research associate for the Center for Food and Agricultural Business, and Dr. Bruce Erickson, agronomic education manager of the American Society of Agronomy and Department of Agronomy, then prepared an article for CropLife detailing the survey results.

According to Widmar and Erickson, a lot had changed in the precision agricultural market during the two-year gap between the 16th and 17th Precision Adoption surveys, particularly when it came to what categories of precision agriculture were being talked about the most by respondents. “Just since 2013 exponential changes had occurred and resulted in whole segments, previously not considered in the survey, coming to the forefront of agriculture’s attention,” they wrote. “The two most obvious were unmanned aerial vehicles (UAVs) and Big Data. In planning for the survey, it was quite surprising how much change had happened over two years.”

UAVs really stood out from the precision agriculture technology crowd, said Widmar and Erickson. “From scouting fields to capturing novel videos of planting and harvesting, UAVs have been one of the hottest topics in agriculture since the last precision agriculture survey,” they wrote. “To understand more about the application of UAVs in precision agriculture, UAV-specific questions were included in the 2015 survey. These validate the strong anecdotal interest and enthusiasm for UAVs.”

According to the survey results, 16% of respondents reported their agricultural retail location was using UAV technology. Nineteen percent of respondents anticipated offering UAV-related services to their farmer-clients during the fall of 2015.

More UAV Use Coming

And the future looks equally bright for UAV use. “Strong growth is expected, with 38% of dealers saying they will offer UAV services in the next three years,” wrote Widmar and Erickson. “The survey has included remote sensing questions since its beginnings, but unfortunately, the survey did not dig into how dealers were using UAVs today (scouting, vegetation monitoring, videos, etc.). But we have always had questions about profitability — 13% of those who are using UAVs are generating a profit, about the same are breaking even, and the remainder are either losing money or don’t know. Also as part of the survey, agricultural retailers are asked to estimate the percentage of all of the acres in their trade area using various technologies. This year the retailers said UAV technology was used on 2% of the acres, but they expect it to increase to 16% for 2018.”

Another part of the Precision Adoption survey has been an assessment of which precision agriculture services retailers were offering and future expectations. Overall, the largest increase in offerings will be for UAV services. The second precision service expected to see large gains is variable-rate seeding prescription services. “This was reported at 27% in 2015, with expectations to increase to 38% by 2018,” wrote Widmar and Erickson.

The other precision services with large expected increases in offerings include field mapping, yield monitor analysis, and satellite/aerial imagery. “When thinking about all six of these services two common themes emerge: Big Data and aerial imagery/information,” wrote Widmar and Erickson. “Not surprising as these topics have been very popular for the industry.”

Less Money Presents Potential Precision Problems

Since 2004, Precision Adoption survey respondents have been asked about the specific barriers that limit farmer adoption of precision technology services. In total, six barriers were evaluated; but one stood out.

When asked if pressures from farm income limited producer adoption of precision agriculture services, 49% of respondents agreed. This was higher than any other barrier, and the highest level since 2009. While 2013 had record-low agreement, current conditions are most similar to levels not observed since 2009. “Retailers’ concern about farm income is warranted,” wrote Widmar and Erickson. “Earlier this spring, the USDA estimated net farm income at 35% less than 2014, marking the potential for a third year of consecutive decline.”

Looking forward, Widmar and Erickson predicted that the impact farm income has on the use of precision agriculture services will depend on the severity of the income pressure, the stubbornness or longevity of the pressure, and the economic value the precision services offer. “Strong income pressure persisting several years will likely stifle the adoption of technologies that do not have, or fail to convey, strong economic returns,” they wrote.

Some evidence of this “market softness” has already started to appear during the latter half of 2015, although it wasn’t as pronounced as originally feared. In the 2015 CropLife 100 survey of the nation’s top ag retailers, precision agricultural services was one of the few product segments to show growth year-over-year in the ag retail market. According to the 2015 survey, 57% of ag retailers had sales gains of between 1% and more than 5% in precision agriculture for the year. This was down from 65% in 2014, but still ranked fourth among the nine crop input/service segments tracked in the CropLife 100 survey. Perhaps more troubling for the precision agriculture segment, 10% of the nation’s top ag retailers saw their service figures decline in 2015, a big jump from the 2014 figure of 4%.

One of the other major trends talked about in the 17th Precision Adoption survey also came up in the 2015 CropLife 100 survey as well. When it came to the thought of utilizing UAVs in their operations, the nation’s top ag retailers are still pretty evenly divided into pro and con camps. During the 2014 survey, 47% of respondents said their companies planned to offer UAV services to their grower-customers once the Federal Aviation Administration had approved their usage. An almost equal number, 42%, said they had no plans to use UAVs. Eleven percent were undecided.

In the 2015 CropLife 100 survey, the yes and no percentages barely moved. Now, 50% of respondents say they plan to use UAVs in their businesses and 44% say they won’t. Perhaps the one positive UAV manufacturers can take away from this survey is the undecided pool has shrunk in 2015 to 6%.

Moving into 2016, however, the outlook for precision agriculture is somewhat less positive. In its second annual Buying Intentions survey, CropLife found that the majority of the nation’s ag retailers, 37%, spent less than $100,000 during 2015 on their precision agriculture services and products. Only 1% reported spending more than $1 million on the category.

But when asked if their 2016 expenditures on precision agriculture were expected to grow at all during the coming year, only 21% said this would be the case. The vast majority, 38%, were planning for their precision agriculture spending to remain at the same level as in 2015. Sixteen percent anticipated that their spending in this category would decline between 1% and more than 10% for the upcoming year.

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