Mid-Year Precision Agriculture Update: Staying The Course

For service providers offering precision programs, hope springs eternal in winter. Services are evaluated, new offerings are considered, growers are consulted, and plans are developed in the spirit of bringing better value to customers, and more profit to the bottom line.

Half-way into 2017, and well into the spring season, we wanted to get a sense for how well battle plans survived amid nagging low crop prices and ongoing upheaval and evolution in the precision technology market. To gain some insight, PrecisionAg® Professional conducted an electronic survey of the audience for this mid-year report.

Of the 186 responses, those who indicated their precision service program has emerged better (37%) or significantly better (8%) than expected was exactly equal to the number who said the season has played out as expected (45%). Just 10% said the precision program has performed worse than expected.

David Swain, Manager of Precision Agriculture for Southern States Cooperative, said that a hopeful winter plan has netted mixed results, but good growth in some areas. “Our goals were very positive going into last fall and continued positive heading into spring,” says Swain. “In a time that our economy has seemed to drive toward cost-cutting, we — and a number of our customers — are more focused on a higher level of resource management and return on investment. We believe that our program is a key tool in that higher level of management.

“So far, we are seeing mixed results,” he continues, “although there are areas that we have actually grown our precision agriculture business. The balance of our business has remained consistent in our program with minimal growth, but really haven’t see any significant drop.”

Top 10 Services That Deliver Customer Value. Click to enlarge.

2017 Sales of Precision Services vs. Expectations. Click to enlarge.

At NEW Coop, Ft. Dodge, IA, growing the customer base was necessary for the company to meet aggressive departmental goals against the specter of low commodity prices. “The addition of labor in our precision agriculture department has helped with being more visible to our customers and building stronger relationships,” says Shane Carlson, manager of precision agriculture.

Heartland Coop, West Des Moines, IA, also focused on the workforce in its precision program. “The past year, we continued extension and development of a support and service team that enhances the precision agriculture offerings to Heartland Coop customers thru Heartland’s agronomy sales team,” says Craig Orr, Director of Marketing.

Heartland’s offering is a “customized blend” of its proprietary Farm Field precision program with Climate Corp.’s FieldView, the R7 Tool from Winfield United, and the AgSolver return on investment platform.

“It is tailored to each grower’s individual needs along with a calendar plan for each grower to deliver the contracted services in a timely manner,” says Orr. “Acre growth is taking place within all four.”

Darrin Martin, precision agriculture manager at equipment dealer Wakarusa LLC, Wakarusa, IN, says an uptick in advertising spend has helped the dealer group improve sales by 20% in 2017. Pushing service has been key.

“Providing support over the phone or remote access free of charge on older equipment that I didn’t sell has been gaining trust and relationship with customers that wouldn’t be customers today if I would have blew off or charged a lot for my time,” says Martin. “They came to me because of a poor customer experience with other businesses.”

Asked to identify services that deliver the highest value, respondents indicated that the “tried and true” offerings continue to deliver consistent value: variable rate application, traditional soil sampling, and seed recommendations.

“The Precision Planting 20/20 monitors we have sold are bringing a lot of value to customers — they tell us it’s a better interface than what they had previously,” says Bryce Jennings, Van Horn Inc, Cerro Gordo, IL.

Greg Musson, general manager at Gar-Tootelian, Reedley, CA, lists a number of new technologies that have driven value. “The water division is bringing many things of value to our customer base,” says Musson. “Drone work to detect pest pressures and nutrition stress within a crop using different camera views has been an innovation of the current season. And the use of EM38 to address zone management irrigation, nutrition, and soil types highlights the use of hands on practices.”

EXPECTATIONS AND OBSTACLES

A series of “gut check” questions seem to indicate that despite optimism about the 2018 season (more than 7 in 10 expect service sales to increase) there are several looming obstacles:

  • About two-thirds of respondents say commodity prices and farmer income are significant impediments to precision sales.
  • Nearly half cannot hire enough qualified people because they are not available.
  • A lack of availability of wireless connectivity is a hinderance according to more than eight in 10 respondents.
  • Nearly half of respondents see input and/or equipment manufacturers as a threat to marginalize the role of service providers.

Many of the service providers we talked to concur with the results of the survey, but some also pointed the finger back at themselves and their ability to deliver on promises as a potential threat.

Gut check Graphic

“When you buy a car or anything else, and you receive shabby service, you’re not going to patronize that business again,” says Hennings. “Also having the right people in the right positions is crucial to running a business properly.”

Musson says that a lack of consumer knowledge is an issue they are working hard to mitigate.

“As the average age of the grower increases, so does the hesitance to the use of new technology,” he explains. “Encouraging growers to try something new becomes much more difficult when the grower does not have the prior knowledge on how technology works.

“Our business has found, though, that through the use of simplified examples, on-site field demonstrations, and consistent customer support, our threat has actually decreased. It is our job to make our growers feel comfortable and to increase their bottom lines. Our hands-on approach with technology assistance brings a level of comfort to the grower when using a product that they may not be familiar with.”

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