A first-of-its-kind academic analysis looks at labor rates and current autonomous solutions to spur a discussion on the tipping point for when the technology pays. Published by Chad Feichter, ag economist at Purdue, and PhD student Josh Strine, the recently released study looks at large-scale autonomous farming equipment and a Midwestern 50-50 corn/soybean farm.
“We were puzzled by what could potentially be the returns to these large autonomous machines because it seems that’s at least the trend of where we’re going,” Feichter says. “Also the idea there’s a labor shortage seems to be what’s motivating the conversation.”
The economists started with an economic farm-planning model originally developed at Purdue 60 years ago, updated it and plugged in a series of factors:
- Labor rates
- Production costs
- Field size
- Machinery/subscription costs
- Equipment efficiency
The takeaway: Comparatively, autonomy is still an expensive alternative to average farm labor rates. Per the analysis, autonomy pays off when the labor rate is greater than $44 per hour.
“Currently, with where labor rates are, the autonomy solution across the board isn’t probably what we need in the immediate term, based on what we understand about how autonomy works and the productivity of autonomy,” Feichter says. “But if there’s a farmer who cannot find labor, autonomous machines will allow those acres to be farmed.”
Feichter says the current technology platforms installed on large-scale machines aren’t a one-for-one substitute for a human operator for a few reasons.
Profitability of autonomy hinges on three things:
- the cost of autonomy subscriptions
- the field efficiency of the machines
- how much human supervision they still require
Co-author Strine says the ROI of autonomy is operation-specific to how the efficiencies of autonomy are realized. Their analysis included wide ranges in the variables to explore likely scenarios with today’s technology so as efficiencies improve there can be a comparison.
“Right now, the efficiency of the autonomy isn’t an advantage versus humans,” Strine says. “Maybe they will quickly get to 100% human efficiency, and it’s possible that it will surpass just having somebody driving that tractor. However, right now, oversight hours are required and the on-road transport is required.”
Where could autonomy pay off the soonest—Fiechter says it’s where high value tasks, in field efficiency and tightness in labor intersect.
“There are really high-value tasks, where you could potentially alleviate the labor challenge in the short run,” Fiechter says. “Maybe harvest is one of those where we would really see a benefit of having autonomous machines, whereas in planting time, it may not be quite as important.”
Manufacturers Report No Humans Have Been Displaced by Autonomous Tractors
Craig Rupp founded Sabanto, which sells autonomy systems to be outfitted on mid-range hp tractors.
“I had an epiphany after 50 systems,” Rupp says. “I’m not solving the labor problem. Farmers may buy as if we’re replacing labor, but they keep the labor, and it’s about quality of life. It’s about not spending 12 to 16 hours a day when they get behind or have to work weekends. And they are using autonomy to scale their operation—they are taking on more acres.”
Earlier this year Sabanto published a case study looking at seeding 10,000 acres with a traditional 4WD high-horsepower set up versus running three Sabanto outfitted tractors. The company’s analysis did not include labor costs, but evaluating the investment and operational costs, Sabanto says a traditional setup costs $18.88/acre the three Sabanto equipped machines cost $6.27/acre. You can read the whole report here.
His company has sold more than 200 systems in the past two years.
“We’ve put no people out of work,” Rupp says. “Farmers will adopt autonomy for labor when it’s the last choice they have.”
Michael Porter, large tractor marketing manager at John Deere, shares an anecdote from a customer over the Thanksgiving weekend.
“A great example this year is we had two machines running on Thanksgiving, and they literally ran while the farmers had their Thanksgiving dinner,” Porter says. “And the next day, when they got back out there, they had a couple hundreds acres already tilled so they can continue moving on with that fall field work.”
The quality of life autonomy adds to as well as the agronomic value of timely field work are added values manufacturers point to for being benefits of adopting these systems.
“That’s something that’s hard to quantify, football games on Friday nights, dinner with the family, all those things that’s a big part of it. Those quality of life things, they’re really hard to quantify, but people experience them, and once they experience them, they don’t want to go back,” Porter says.
John Deere autonomous systems cost between $40,000 and $45,000 for the kit, plus dealership install and yearly subscription fee, which is $10,000 for unlimited acres for tillage, for example.
Dinen Subramaniam, product launch manager for Outrun at PTx Trimble, has lead their team to deploy autonomous grain cart systems and tillage systems in Nebraska, Iowa, Illinois and Georgia.
He shares a story from a customer in Nebraska who it’s a father-son farming duo, and the OutRun grain cart allows the father to truck grain while the son harvests supported by the autonomous grain cart. That 3,500 acre farm has been able to finish harvest in 20% to 25% less time.
“It’s really about the flexibility of the deployment of labor that autonomy gives you,” Subramaniam says. “Like having a grain truck driver rather than a grain cart driver, or having someone who can take a five hour break during tillage and let the autonomous system run.”
AGCO’s PTx OutRun tillage solution is $44,000 for hardware plus a $9,000 annual cost. OutRun’s modular model also includes autonomous grain cart operations, with additional tasks in development. A combined tillage/grain cart setup costs $55,000 for hardware and $15,000 annually.
Subramaniam also highlights agronomic benefits for fall field work getting done timelier when autonomous systems are used.
“Instead of straining into December with harvest trying to get that crop off the ground, autonomy can help reduce late harvest yield loss, which can be a 3% to 5% reduction,” he says. “We talk about an ideal harvest season, but the reality is there are always weather delays, mechanical delays, and more.”
There’s a trickle down effect of timely harvest, fall tillage and fall application.
“From a tillage point of view, we’ve also learned that there’s other benefits as well from better incorporation of crop residue, getting to tillage sooner so that that crop residue can break down,” he says.
The Purdue economists agree this is a space to watch as what’s possible with technology and the escalating labor issues intersect.
