Despite the outlook for low farm net income and a down farm economy, large American farmers have a surprisingly aggressive outlook toward buying and utilizing new technologies on their operations, with high hopes for potentially disruptive entrants. According to a just-released syndicated industry study, as many as one in four large farmers have plans to actually increase their spending on new farm equipment technology and agronomic data technology. So concludes Caledonia Solutions, www.caledoniasolutions.com, a business research and consulting firm in Minneapolis.
The first wave of modern ag tech was the rapid and widespread adoption of biotech seed. The second wave, GPS steering, was embraced by growers more quickly. “The first wave was mainly driven by yield advantages, and the second wave mainly by cost savings,” says Dr. Robert Hill, principal of Caledonia Solutions. “In this third wave, it looks like the farm operators are getting a strong dose of both benefits.”
“We are in the early stages of the third wave, which is the explosion of digital farming and big data utilization in the farming industry in the U.S.”, continues Hill. “The benefits are powerful enough to keep this adoption moving forward at a strong clip, even in the currently depressed state of the farm economy. We are seeing disruptive technologies coming to the growers. An example is Farmers Business Network. They are challenging the traditional information networks and farm input supply channels in the ag industry. This may force a structural shift in the industry.”
The study of large farm operators from Caledonia Solutions details current adoption rates and future growth projections for 34 separate equipment and data technologies. “Some of these technologies have moved through such a rapid rate of adoption that they will soon be at their saturation levels. Others are new players in this market, and the farmers have high expectations for them over the next few years.”
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According to the study, the total number of new equipment and data technologies deployed by a grower is going to more than double over a 6-year period. Says Hill, “this is not what you would expect to see with farm incomes projected to stay low for the next few years. Farmers aren’t waiting to make moves for improving their operations.”