“The variable-rate market is finally maturing and ready for a strong growth. We want to serve more acres, and more efficiently.” That was the message we heard during the recent International Conference on Precision Agriculture in Denver, CO. The market is clearly maturing, shifting from questions and tests on agronomics and economics at the field level toward the setting up of efficient and financially sound services — and growth.
Precision farming services are no longer restricted to crop consultants and dealers who serve niche markets or to leading farmers as a small add-on to basic services. Precision farming practices are becoming accepted as valid parts of a complete farm management system.
Until recently, distributors for Geosys’ FarmSat product had their customers focus on agronomics and economics. This drove service providers to manage precision farming services as a technically demanding operation, with many trials, discussions, and learning, preventing a rapid and steady development of the acres served.
Today, most players know that the technology is sound and that its economics are very positive: environment benefits are obvious, agronomics used are well mastered, and the economics are noticeable.
After a few years managing variable-rate maps production or application as a small side service, distributors and service providers understand that they can only run a profitable business if they invest and go full scale. To make it profitable to them and to their customers, they need to serve more acres and they need the service to be efficient.
Fixed prices and investment (whether past or actual) need to be valued and amortized, and therefore the service provider needs to sell more acres — which means investment is not only on technology but in marketing and sales. The market is finally maturing: customers look for performance, growth, and simplicity of solutions. This move could not happen without going through some early technology market development steps.
Editor’s note: This article first appeared in the Winter 2008 issue of PrecisionAg Special Reports.