Underused machinery could turn into new revenue
Let’s talk about your underused farm equipment. But first, a brief history of Airbnb.
Airbnb is a website that helps people rent out their properties for lodging. The basic idea is to turn unused or underused properties into revenue generators. Its popularity has grown steadily, and today, the company is valued at $20 billion, with 1.5 million listings in 34,000 cities around the world.
Learning about Airbnb got Jeff Dema, FarmLink’s president of grower services, thinking about another category of underused property—farm equipment.
For example, “the average sprayer runs less than 60 days a year, yet represents one of the costliest investments for a retailer or farmer,” he says.
According to the 2012 USDA Ag Census, farmers own about $244 billion worth of machinery and farm equipment. Yet for a majority of the year, that machinery lays idle. Dema hopes MachineryLink Sharing will at least partially solve that situation.
“More efficient use of equipment will make retailers and farmers more sustainable,” he says.
The service allows retailers, co-ops and other entities to use equipment when they need it and earn income on it when they don’t by sending unused equipment to someone who can use it.
MachineryLink Sharing “sellers” set the price for sharing their equipment and then fill out a calendar for the days when each piece of equipment is available. “Buyers” search the website for the equipment they need. A five-star rating system keeps the process and user experiences transparent.
Greg Peterson, also known as Machinery Pete, says it makes sense the “share economy” has extended into agriculture.
“Our culture is changing,” he says. “With Uber, Netflix and more, everyone can share everything. Machinery is an expensive asset, which makes it a prime candidate for sharing.”
Used equipment is also in excess right now, Machinery Pete says. Because of that, when sales conditions are difficult for retailers, co-ops and dealers, the flexibility of a lease makes good business sense for them and for customers. Not only that, they have the opportunity to build relationships with new customers, he says.
Dema agrees current financial pressures in the agriculture industry have farmers looking for additional sources of revenue and hopes the inspiration of Airbnb’s success will spark an interest in MachineryLink Sharing.
“Agriculture is in the midst of its next big transformation, where new thinking and business models that have revolutionized other industries are being embraced within ag,” he says. “Early adoption in Midwest row-crop states has been strong, and we expect to expand the program for national availability.”
Participating retailers and co-ops tested the program earlier this year. It will be available to farmers sometime this fall. For more information, visit www.machinerylink.com.
‘Ag 3.0’ Coming Soon?
At its core, FarmLink’s MachineryLink Sharing program is one big data set of machine assets and people who want to use or lease them. Collecting and analyzing data is the clear path forward for making the agriculture industry better, says Ron LeMay, FarmLink CEO.
“We believe it’s a transformational time for this industry—Ag 3.0—when the combination of human know-how and insight, coupled with robust data science and analytics, will change the productivity, profitability and sustainability of agriculture,” he says.
“But for data science to truly unlock the potential of precision agriculture, we must hold the rigor of data collection, management and sharing to the highest standard,” he explains.
LeMay contends there is a $10 billion gap in profit opportunities for corn and soybean production that could be solved by focusing on “actionable data and insights.”