Mon, 23 Jul 2018
In recent years, we have seen the knock-on effects of falling agricultural commodity prices. Growers’ incomes have fallen by more than 50 percent in the last 5 years, while farmers’ debt-to-income ratio is approaching levels not seen since the farm crisis in the 1980s.
As middlemen in the selling of crop inputs to growers, ag retailers are directly impacted by these variables. Furthermore, retailers must contend with a possible future where wholesalers sell product directly to large farmers and cut out the middlemen.
As a result, ag retailers have begun to branch out and offer new value-added services to growers that will help counteract the threat of lower margins and heightened risk. Some of these services include soil testing, fertilizer applications, investment consultancy and, perhaps most importantly, precision agriculture.
How can Precision Ag Help?
Ag retailers have increasingly played a vital role in the adoption of precision agriculture. Precision ag is seen as synonymous with the first wave of digital agriculture. It refers to the practice of making farming more accurate and controlled when it comes to the growing of crops and raising livestock.
What separates it from traditional methods of raising efficiency is the close relationship with information technology and an army of items such as GPS guidance, sensors, drones, robotics, control systems, autonomous vehicles, GPS-based soil sampling, automated hardware and telematics.
As a result, ag retailers are increasingly looking to implement these technologies and by extension reduce the risk to growers, thereby improving control and ensuring that ag retailers remain less vulnerable to shifting variables.
Precision agronomics relates to providing more accurate farming techniques for planting and growing crops. It is through adopting some of these technologies that ag retailers will reap the benefits of precision ag:
Big Data – Big data underpins the whole philosophy of precision ag. These technologies are able to gather a huge amount of data that helps make immediate and effective decisions regarding the growing of crops.
Variable Rate Technology (VRT) – This technology allows farmers to vary the amount of inputs they use, based on up to date information about their crops. This helps them to respond quickly and efficiently to potential issues before they become a problem. This technology can be approached using a map-based, sensor-based or manual methodology.
GPS Soil Sampling – Soil sampling allows growers to determine variables within the soil and why there may be differences in productivity and yield. It can help determine the optimal amounts of seeding and fertilizer, further enhancing profitability.
Remote Sensing Technology – This technology is helpful for monitoring and managing land and water. It can pick up minute details about the health of crops, and can determine anything from the exact stressors at any point in time, to the amount of moisture in the soil. This data is usually provided by drones and satellites.
How to Implement Precision Ag And Solve The Current Risks
Knowing what precision ag is and how it works is only half the battle as an ag retailer. Success is dependent on your ability to work closely with growers on strategies that ultimately benefit all parties.
Ultimately, precision ag products can be sold to the grower as a means of differentiating one retailer from another, and they will want to know how this difference is going to benefit them in the long-run.
Many growers may be apprehensive about technology, so consider which pricing model methods are most applicable for each one. Some may want a ‘wet their feet’ program, and some may be more willing to tackle an ‘all-in’ program, for example.
Once adopted, more and more efficiencies will be captured as the season progresses, and partnerships will solidify a competitive advantage by focusing on streamlined costs and bringing a better experience to growers.
Although many may seek technology as a means of bypassing the role of intermediary occupied by the ag retailer, the complexities associated with fertilizer distribution, coupled with the trusted relationship model that bonds growers and ag retailers will prove resilient and resistant to these risks.
To address these challenges, we have developed AG40 workshop, a programme designed around bringing key stakeholders from throughout US agriculture together to tackle the most issues in relation to the stability of the market. To find out how this will be achieved, and whether you can be involved in this, follow the link here and below:
ABOUT AG40
Challenge Advisory is bringing together AG40, a unique workshop where organisations will have the ability to network amongst each other for precise and profitable resolutions across the entire industry. There will be panel discussions and workshop sessions designed to create partnerships and profitable business development, helping to find cross-specialism solutions to current sectoral challenges.
Join Challenge Advisory and all our stakeholders for education, interoperability and investment relating to the latest technology in digital agriculture – click here to find out more:
Rebecca Lam
Rebecca Lam