From planters planting valuable seeds precisely in the ground to combines tracking every bushel and moisture in a given field, technology is racing advancements to agriculture.
“We might not be first adopters right out of the gate, but maybe kind of see a technology out for a year or two, before we decide if we want to use it or not,” says Brian Scott, a farmer in Delphi, Ind.
With every pass and every plan on his Indiana farm, technology is engrained in much of what this conservation-minded farmer does.
“We use technology pretty much every day,” says Scott. “Just today, I got some spray records from a neighbor that did some spraying for us. We left check strips out in those fields. So, I’ll be able to upload those and see them during harvest and cut those pieces out and see if we got a return on that chemical pass.”
“Low Hanging Fruit”
What Scott calls the “low hanging fruit” of technology, or common technology like auto-guidance on tractors, is a must. It’s diving into other technologies that require more research.
“We really have to scrutinize the prices on things and make sure they work for us,” he says.
Careful consideration, and the price versus payoff piece of the puzzle, is something where this Indiana farmer is not alone.
“Farmers really want to know that value proposition and technology,” says John Fulton, a professor and Extension specialist with Ohio State University.
Calculating the ROI
Fulton says the return on investment (ROI) can be big, but the upfront costs are often the focus for farmers.
“Some of these technologies aren’t cheap,” says Fulton. “We see that with some of the planter technologies. A farmer may be cutting the check for a $30,0000 or $40,000 retrofit or to have that technology on that planter when it comes from the manufacturer.”
While the initial costs can be big, Scott says investments are measured in various ways on his farm.
“We’ve finally put electric meters on the planter, that’s been a big one, to improve our accuracy,” says Scott.
As Scott focuses on accuracy in seed placement, the technology also spurs a savings in seed costs.
“We had to manual row shut offs on the system before, now every row shuts off automatically, and it’s kind of surprising how much more seed savings we’ve had there,” he adds.
Technology that Pays Quickly
For the Indiana farmer, there’s a high bar set when he decides to adopt technologies on his farm.
“I have an expectation of what it’s going to do for us when we get it,” says Scott. “So, I do kind of want that immediate response from it. We know it may take a few years to pay for it, but we want to see some of the benefits right away.”
A recent Farm Journal survey found 67% of farmers expect a return on investment in three years when paying for technology. And 22% expect that payoff to happen even quicker, even within one year.
“Most of our data would suggest that from a guidance and section control standpoint, it’s a one-year if not a two-year maximum, on terms of payoff for those technologies,” says Fulton.
Looking for a Quick ROI on Technology? Here’s an Investment that Pays For Itself in a Year
While section control and guidance can produce ROI quickly, Fulton says there are other technology investments that take longer to provide a return.
“Variable rate fertilizer in some cases can be a little bit longer in terms of a payoff,” adds Fulton. “It could be six or seven years, just because you’ve got to go through a couple of applications to see the value of that. But in general, some of these technologies are a one- or two-year payoff.”
Farm Journal Field Agronomist Ken Ferrie puts plots in every year to drill down the price tag and payoff of investments.
“The biggest benefit I’ve seen from implementing a full variable rate technology (VRT) program on the farm is definitely ROI,” says Ferrie, owner of Crop-Tech Consulting.
He says the financial benefits don’t show up just in money coming in, but also in terms of savings on input costs.
“The ROI for seed costs usually goes down, so our seed expenses go down,” says Ferrie. “Now, we can add a little bit to that VRT, the seed cost goes down with our VRT customers. Nitrogen may not change in the field, but we’d be moving nitrogen around in the field, so the overall N rate may not change that much, but on some areas, we’ll be applying more, in some areas we’d be applying less.”
From reducing input costs to driving higher yields, reaping big rewards is a constant quest.
“On average, we see 4% on some of those technology savings to the farmer in terms of inputs used, but we’ve seen easily 7% to 10% savings, and depending on the field size and shape, it could be in the 30% savings department as far as inputs,” adds Fulton.
