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RSS By: Chris Barron

Chris BarronHave a margins question? Through this blog, you will gain insight into improving your bottom line, as a margins expert answers questions and provides farm business advice.

 

Precision Technology Improves Crop Margins

Nov 09, 2011

Precision technology has quickly become one of the most effective tools for improving margins. Most producers understand the cash payback from variable-rate fertilizer, lime, and seed. Other common uses include overlaying soil types, fertility, and yield maps to develop specific management prescriptions. These prescriptions help us to invest cash wisely in the areas of fields/farms which generate the greatest returns.

In addition to the obvious cash returns from the mapping, even the basic technology can generate significant margin improvements. It's important to identify what portions of this technology best fit your operation. Take some time to analyze the components you currently use. Ask yourself; “Are there ways to measure the returns from this technology?” If you can’t measure the return, can you justify the expense?
 
Sometimes the simplest pieces of technology can generate the largest returns. For example, some consider auto steer to be more of a convenience” than a cash return” component of the technology.
 
Here is a specific study that we did this fall to determine the value of auto steer on a combine with row sensors, (enables the combine to steer itself in corn). With significant wind damage in our area, it was extremely difficult to determine where to drive the combine with no apparent rows to follow. With dust or darkness it was absolutely impossible without auto steer and row sensors!
 
Cost Savings
 
As you can see from the above information, fuel cost improvement alone provided in additional $7.75 an acre bottom line savings. There was a productivity improvement of close to 50 acres of additional harvest capacity each day. Not to mention the lower speed also doubles separator hours on the combine, which adds to wear and tear and replacement costs. In our case, we were able to pay for the entire guidance system in one year of use.
 
If you’re using precision equipment, challenge yourself to measure the value. How much is this technology improving your bottom line? Some tools are more valuable than others. Figuring out which components create the most value is a great way to improve your profits.
 
Let me know if you're interested in tools for calculating precision value.
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