MAKING PRECISION AGRICULTURE PAY ! Frannie Rogers BIOEN/SOIL 4213

Economics Consider Costs Annual Cost of Precision Farming Tools Depends on equipment, software, & databases Changes in Crop Input Costs Fertilizer, herbicide, & seed Investment Costs Cost of developing “human capital” Workshops, training fees, time away from work, and “wrong decisions” made while learning

Economics (cont.) Short-term Benefits Site specific information improves ability to diagnose crop production problems Yield restrictions caused by drainage, soil type, diseases, weeds can be identified & corrected Prevention of over-application of inputs Promotes good land stewardship

Economics (cont.) Long-term Benefits Data Collected & Analyzed Evaluation of Management Practices Comparison of Yield Variations Evaluation of Crop Inputs, New Products Tracks Trends & Identifies Problems Changes in crop rotation & varieties

Economics (cont.) Efficient Equipment Use Increases Field Efficiency Reduces overlaps & missed applications Increased Machinery Utilization rate Uses soil characteristics & weather to improve scheduling of operations Reduces Risk Reduces Variability in Net Returns

Data Management Costs are cut, yields improved if farmers share data & results The potential of precision agriculture may be limited if large companies control precision data If data is not shared, practical & profitable uses are not developed

Future Benefits Production of Accurate Maps Prevents paying unnecessary premiums Increases your average yield, which increases coverage & can decrease cost Inaccurate maps may mean over-paying for other farm input costs

Is It Profitable? Technology must be used in ways that fit the local farming conditions One or two inputs will not consistently pay the costs of site specific data collection & use Profits depend on increasing yield & or quality

Is It Profitable? Profitability of spatial management is linked to the crop value Economics of precision agriculture are site specific Whole-farm information will drive the economics of precision agriculture

Conclusion Most profitable uses Diagnosis of crop problems Information system applications Risk management Crop differentiation & process control Investment of time & resources

Conclusion (cont.) Profitability depends on various factors Crop value & yield Interpretation of data collected Economics change with technology Make informed management decisions Full capabilities may not be evident

References An overview of Precision Farming Technology: Is It for You? 8s00.html 8s00.html Economics of Precision Farming: Payoff in the Future cations/economic_issues.html cations/economic_issues.html