Finding The Essential Link Between Grower And Ag Retailer
The farmer-trusted adviser relationship has had a long, storied relationship that has ushered in new technologies and advanced the practice of farming for decades. Today, for the professionals and organizations providing agronomic and technology advice to farmers, the battle to create a sustainable service business has never been more challenging.
Starting with the formation of the Cooperative Extension system more than a century ago, farmers have had the benefit of a variety of trusted advisers to take advantage of research, expertise, and product knowledge, and to gain a broader perspective on farming practices beyond their own fields.
Seed technology development, improved fertilizers, the rise of crop protection products, and advancements in machinery delivered rapid value to the farm, and brought with them even more on-the-ground expertise. Independent crop consultants, full-service agricultural retailers, equipment dealerships, seedsmen, and manufacturer representatives from every product segment provided deep and valuable resources for farmers adopting these products.
Things have gotten much more challenging over the past two decades. By the mid-1990s the federal government was already eroding its spending on agriculture research and Extension. Massive consolidation in fertilizer and crop protection manufacturing in the early 2000s, coupled with the explosion of biotech crops, stripped billions of revenue dollars out of the distribution channel and substantially cut the number of product field representatives in the countryside. The Internet bubble, at its peak, created product price transparency and briefly projected a world where service could be displaced by Web-based services and “direct to farmer” models.
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Since then, technology innovation has been bombarding the crop production channel. The efficiency technologies like automatic steering and boom control were quickly subsumed by the market. But adoption of agronomy and data systems and products has been throttled by system complexity, incompatibility, and elusive value. With diminishing product revenue and farmer-customers not sold on the benefits of precision-based agronomy systems, service providers have been struggling to find their sustainable place in the crop production channel.
The irony is that today, so much more is being required of the crop production channel. Fertilizer must be optimized to reduce nutrient intrusion in watersheds. Irrigation control must function to optimize water use in the face of scarcity. Crop protection products must be applied precisely and only when needed. Oh, and don’t forget, we need to feed a growing global population, so the productivity must be maximized.
All along the crop production cycle, farmers are being overwhelmed with opportunities to supplement their operations with new and emerging technology. From fertilizer optimization and in-season crop evaluation to profit analysis, farmers have been presented with dozens of tools and techniques to consider.
The reasons for this technology explosion are noble: increasing production to feed a growing global population, improving operational efficiency, finding ways to collect and use data to optimize everything farmers do, and improving overall stewardship by optimizing inputs have driven most technology developments in recent years.
But while farmers have embraced relatively easy-to-adopt automation technologies like global positioning, guidance and assisted steering, and wireless communication tools, relatively few have taken a confident step forward into information-dependent technologies. Our estimate that only about 10% to 15% of farmers are collecting valid field data and using it to establish benchmarks and to continuously improve their operations went unchallenged by dozens of industry experts that PrecisionAg® Professional has talked to over the past 12 months.
There are myriad reasons why adoption is so strained. Consistent, year-over-year value is difficult to demonstrate. Start-up costs for some technologies can be exorbitant. The sheer volume of offerings from competing organizations creates confusion and frustration. The lack of seamless data transfer and compatibility of software and machinery have slowed adoption of technology to a crawl.
Leaning on Trusted Advisers
There has been movement toward greater collaboration, connectivity, and standardization among offerings and industry players, but complexity will continue to be an issue. Most industry experts agree that to get over the adoption hump, farmers will have to lean on the expertise of all their trusted advisers for guidance.
“The complexity of the digital farming ecosystem as it relates to the utility of data-enabled decision-making tools dictates that partnerships and collaborations will be required to drive maximum value with our mutual customers, the farmers,” says Shane Hand, Digital Farming Strategic Marketing Lead, Bayer CropScience. “In today’s landscape, each player in the farmer service channel plays an important role. However, as a collective industry, we should be doing more to work together via partnerships and collaborations to leverage our joint resources and expertise.”
The goal, he says, is turning valid on-farm data into decision-support tools that utilize propriety technologies and enable optimized, ROI-driven decision-making at the farm operation.
John Mann, Director of Agronomy, Deere & Company, puts this need for collaboration and partnership among the various service providers simply. “We think there is room for everyone in the precision agriculture channel,” he says. “Each of us will have a comparative advantage to offer services closest to our core businesses, but ag retailers, consultants, and equipment dealers all need to work together to improve adoption. Our competitor is apathy, not each other.”
The Value Challenge
The fortunes of precision technology products and practices in agriculture over the past two decades have been dictated strictly by their ability to generate demonstrable value to the farmer. Ironically, the basis from which modern precision agriculture started — variable-rate fertility — remains a practice without a consistent return on investment.
But many other technologies and practices have emerged along the way with solid ROI that have been rapidly adopted. The trajectory of guidance shot up rapidly from lightbar to assisted steering, thanks in part to increasing positioning accuracy and a decrease in price point through the mid-2000s. But more importantly, it delivered clear value (straight rows, less fatigue, repeatability) that improved existing farm practices.
“Automated steering, along with section control, are examples of technology that show a higher rate of adoption because farmers could easily duplicate the expected gain in efficiencies, even with variable accuracy,” says Mike Gomes, Marketing Manager, Topcon Precision Agriculture. “There is always the balancing of cost to adopt vs. the expected return on investment.”
Then there are technologies that are used, but at nowhere near full capacity. Yield monitors have added simple value by providing instantaneous yield feedback during harvest, but are largely underutilized as a georeferenced, year-over-year yield scorekeeping tool. Yield monitors require calibration and attention as harvest becomes imminent, and in general growers have been all too quick to abandon technology and get on with the harvest when technology problems arise.
In recent years it’s been the flood of new technology options hitting the market that has added overwhelming complexity. Wireless connectivity, internet accessibility, and high-functioning mobile technology have unleashed a tidal wave of hardware, software, systems, and services along with huge venture capital investments.
And while the flow of “solutions” continues to inundate the market, the fact remains that the adoption needle has not moved significantly for technology solutions focused on agronomic decision-making.
“As an industry, we struggle to demonstrate proof of some precision agriculture offerings, particularly those that are dependent on an agronomic outcome,” says Mann. “When the outcome is more certain, adoption tends to follow. As an industry we can make the tools simpler, but some growers are not willing to take the risk of using the tools during the most critical times of the season for the perceived return.”
“The information-dependent side of precision farming holds the greatest promise for cost savings and productivity gains,” says Bruce Erickson, Education Distance & Outreach Director in the Department of Agronomy at Purdue University. “But it is not always easy to gain insight from fields when there are so many variables, which also interact, and can play out in different ways depending on the weather, year, crop, and region.
“We have made remarkable progress in this area but still fall short of the potential,” he continues. “The most progress has been made in our abilities to collect, transmit, and analyze the data. But in many cases we still struggle greatly to understand what it all means and how we manage our crops accordingly.”
Data collection, consolidation, and analysis are still viewed as difficult and time-consuming, adds Topcon’s Gomes. “The hurdle to adoption of data-driven decision-making is that there is not a clear value or measure of improvement compared to the effort and cost that are needed to acquire the data.”
Boots on the Ground are Critical
In the end, experts agree that systems available now and for the foreseeable future will require farmers to interact with knowledgeable technical and agronomic experts. “We don’t believe you can ‘black box’ precision agriculture,” says Mann. “Some of the more mechanical aspects may be ‘closed loop’ but will still require training, set-up, and hands-on work for a successful outcome in practice in season. We believe ‘boots on the ground’ will be critical to a positive experience for the grower. We’re putting our money where our mouth is and investing in building this expertise within our dealerships and within Deere itself.”
“Boots on the ground are going to be critical for some time to come,” says Darren Goebel, Director Global Commercial Crop Care, AGCO Corp. “Agriculture is a biological system heavily reliant on weather and myriad management practices necessary to manage the floods, the droughts, the late springs, and the pest infestations. I think there is something to be said for a farmer’s mind working with an agronomist or other trusted advisor. In my 10 years of consulting I changed many prescriptions after consulting with the grower; there was always a reason that made sense.”
Gomes notes that industry consolidation by both manufacturers of agronomic inputs and equipment could threaten the relationships of growers and their advisors due to changes in the business. “Value-added local service is more important than ever,” he asserts. “It’s the key differentiator for enabling the farmer to accomplish his goals.”
The challenge for service providers, which should be a welcome one, is to offer products with integrated services that make the most sense for their customers in the local geography. “There is no substitute for an educated, trained, and experienced local professional,” Gomes adds. “Their challenge is in understanding their customer’s needs and offering the right product/service combinations cost-effectively with a level of quality and repeatability that enables them to grow their business through customers that are successful.”