by Karol Aure-Flynn, Entira
As the industry is showing signs of maturation—crossing its 20th anniversary—it is toning and shaping itself for the next big step in its life cycle. What market opportunities exist for your business, and are you taking advantage? Precision agriculture has maintained a swift and steady pace of progress over the past two decades, but there are new signals that the industry is about to make some major leaps forward.
We’ve been curious about this at Entira. About a year ago we completed our own status report on precision agriculture through a highly comprehensive multi-client study that analyzed the attitudes and behaviors of end-users and providers of precision agriculture tools and services. We’re proud to say this is one of the most comprehensive studies that has ever been done in the industry. Although it’s been several months since the study was closed, we continue to have clients asking to get their hands on this data because of the valuable insights it brings to their business planning.
A recent Precision Agriculture Systems and Services industry market research report by IBISWorld stated, “growth has been positive during the past five years, including a 3.7% gain expected in 2012 on the back of larger economic recovery and growing acceptance of precision agriculture’s technology.”
Precision agriculture is an intriguing topic. Let’s consider these five signs that precision agriculture is getting in shape for the next big thing:
1) Big announcements by leading players in the precision ag business.
A quick scan of precision ag headlines reveals consolidation, innovative product releases and strategic partnerships--all fresh headlines in just a few weeks’ time. Acquisitions and organic growth indicate the top players are growing, but the industry as a whole seems to be tightening with all the consolidation going on. As the industry contracts, does this create opportunities, or challenges? Consolidation traditionally has signaled maturity—but does that mean innovation will slow? Unlikely, given the velocity start-up companies are entering the marketplace, and they all seem to have ties to precision agriculture. By their very nature, these companies are founded on innovation and big ideas.
2) Collaboration across the value chain, all in support of precision agriculture.
If you follow the message strings on ag chat forums, you see they’re full of questions about compatibility and integration of precision ag equipment, software and other tools--“Can a GS2600 use a Raven autosteer valve?” Scenarios like these are all too common today. Imagine the frustration of having all these sophisticated tools, but being unable to make them work together.
There is growing urgency to standardize processes and implementation protocols to make things easier for the end user. Enter AgGateway, a relatively new but aggressively growing consortium of ag businesses and industry representatives whose sole purpose is to bring electronic communication standardization to the highly complex and diverse industry of agriculture. The fastest-growing group within AgGateway just so happens to be the Precision Ag Council. My colleague Nancy Appelquist represents Entira on this council, and we’re excited to participate in this important mission. The council is assembling all of the players who can make the precision ag industry work better—from engineers, to manufacturers, to crop input retailers, to marketers, and everyone in between, including many who traditionally have no ties to precision agriculture. The fiercest of competitors are putting their heads together because they understand the need for cooperation and collaboration—not to mention the desire to stay ahead of probable government regulations. They’ll even tackle issues as fundamental as writing a glossary of terms to establish an official, consistent language for precision agriculture.
Through smarter integration of technological tools and practices, critical farm data will flow more smoothly and efficiently on the farm and along the value chain for everyone’s benefit. It’s within reach.
3) Rapid technology advancement.
New technologies are being introduced today that we didn’t dream of 20…or even 10 years ago. Equipment manufacturers are scrambling to make effective use of wireless technology in the field. Telematics (commonly used in other complex, logistics-heavy industries like oil, mining and trucking) are becoming standard on new farming equipment. We are seeing more communication among machines in the field, more use of management decision tools and models, and less dependence on operator intervention. We can count on many more extremely high-tech advancements rolling out in the near future—many from Entira clients who are poised to unveil innovative solutions never before seen in the industry. The technology momentum seems to have no end in sight.
It’s a sign of the times. Information technologies are becoming so mainstream, producers are going to expect that same level of seamless data sharing in their operation. They want the ease and convenience of carrying their smartphone or tablet to the field with them to pull data from the tractor, pull up a soil map, look up product information, check real-time commodity prices and weather maps, or take a picture of a crop problem with their camera and send it instantly to a specialist for diagnosis. This information leads to better-informed management decisions. That is power.
But here again is one of the greatest challenges in precision agriculture today—“I have all this data; now what do I do with it? How do I make sense of it and apply it to my operation to improve production and profit?” Helping farmers understand how to get the most from these technologies is one of the biggest contributions we can make as an industry. In what ways can your business support the cause? What kind of employees do you need to support 21st century farmers? What kind of training, continuing education, and support will they need to better serve your customers?
4) Precision ag is on the radar of non-ag sectors.
The precision agriculture industry is capturing the attention of people who are in no way connected to ag. We’re talking investment companies, industry analysts—outsiders who wouldn’t normally look at agriculture, suddenly asking a lot of questions. It’s even showing up in mainstream media—high tech publications like Wired and Popular Science often feature ag technology, and national media like the New York Times and Wall Street Journal carry stories about the new developments in agriculture. Their curiosity is piqued—but that’s no surprise. Farmers using satellite technology to precisely map their production acres? Totally autonomous vehicles and robots appearing in corn fields? Operators are using “command-central” dashboards to remotely monitor logistics, inventory, crop conditions, weather and results in real time. It sounds more like science fiction than farming.
5) Adoption of precision technologies and practices is on the upswing.
Adoption is difficult to measure, but it’s safe to say nearly any crop operation is employing some degree of precision, whether it’s auto-guidance, yield monitors, soil mapping, variable rate planting, or something else. Some may not even realize they’re using it, because the tools and systems have been integrated so well into regular agricultural practices, they no longer stand out.
When you take all of the above into consideration, we can only expect adoption of precision agriculture technologies and practices to grow exponentially. There already are signs of that occurring. Feeling confident from the strong ag economy, farmers are buying new equipment with precision technology. Used precision equipment is becoming more widely available to 2nd-generation owners as early adopters upgrade their machines.
Our multi-client study provides more clues into the mindset of these high adopters, validating that the farmers who are pushing the envelope with technology are the ones with high management intensity, tend to be operating larger farms, and generally specialize on a predominant crop.
Technology permeates every aspect of our lives. Once a new consumer need is discovered, all you have to do is blink and there’s a new technology ready to address it. As these mainstream technologies make their way deeper into farm practices, growers will naturally embrace them, because they’re used to using them “off the farm.”
Fine-Tuning for the Next Level
Looking at the corporate consolidations taking place, innovations, collaborations and standardization in the works, it’s like the precision ag industry is becoming a sleeker version of itself.
Entira’s precision ag multi-client study digs into the opportunities and gaps within this moving paradigm. We uncovered the benefits producers desire most; and interestingly, it varies greatly by region and adoption level. The study also reveals what producers say is standing in the way of their future equipment and technology purchases.
Bottom-line: Farmers care most about benefits (e.g., “how can this make me more money?”), and that’s where suppliers need to focus.
The roles of supply chain positions are challenged by the opportunities and momentum of technology adoption. As businesses who serve the grower, we have an important job to do. The more we can assist growers in seeing the benefits of precision ag and show them how to take full advantage of the technologies, the more readily they will embrace them, and employ the data and tools to make site-specific, better-informed management decisions for their farms.
Email firstname.lastname@example.org if you’re interested in purchasing the report, or to learn more about how Entira can customize a strategic marketing plan designed to ensure this moving paradigm of precision agriculture pays off for your business.
This article appeared in the March 2012 issue of Strategic Agribusiness Review.