Site-Specific Management

1
Site-Specific Management Demand for Knowledge
Based Agricultural Services
2
Questions

• Who is using site-specific management?
• Which precision agriculture technologies are
  showing themselves to be profitable?
• Implications of site-specific management for
  demand for knowledge based agricultural services?

3
Some Definitions

• Site-specific management is the old idea of
  doing the right thing, at the right place, at the
  right time.
• Precision agriculture uses electronic
  information technology to make site-specific
  management commercially viable in mechanized
  agriculture.

4
Three More Definitions

• Embodied Knowledge Technology Science
  incorporated into physical inputs (e.g. seed,
  fertilizer, chemicals) in such a way that minimal
  decision making by the user is required. Bt corn
  and glyphosate resistant soybeans are good
  examples.
• Knowledge Based Agriculture requires data
  gathering and analysis to adapt decisions to
  local conditions. Precision agriculture and
  integrated pest management (IPM) are examples.
  Also called Smart Farming.
• Knowledge Based Services when a user
  out-sources data management, analysis and
  recommendation development for knowledge based
  agriculture.

5
Yield monitors Precision Farmings killer
application

• According to the USDA about 34 of U.S. corn
  acreage was harvested with a combine equiped with
  yield monitor in 2001. It was about 25 of
  soybean acreage.
• Only about a third of these combines were equiped
  with GPS.

6
U.S. Acreage Harvested with a Yield Monitor
Equipped Combine
Source Daberkow et al, 2002
7
Yield Monitor Use Highest on Larger Farms in the
Corn Belt

• USDA researchers showed that 60 of U.S. farms
  using precision agriculture are in the Corn Belt.
• In a 1999 survey, Ohio researchers found that
  only 6 of all farmers use yield monitors, but
  over 50 of farms with gross sales over 1
  million.
• In general, larger farms are more likely to use
  yield monitors, but the likelihood of adoption
  peaks at about 1600 acres.

8
Yield Monitor Use in Europe

• United Kingdom 400
• Denmark 400
• Germany 150
• Sweden 150
• France 50
• Holland 6
• Belgium 5
• Source Stafford, 2000

9
Yield Monitor Use in Latin America

• Argentina 560
• Brazil 100
• Uruguay 12
• Chile 4

• Las Rosas, Cordoba, Argentina
• lt 33 qq/ha
• 33-56 qq/ha
• 56-66 qq/ha
• 66-76 qq/ha
• gt 76 qq/ha

Source M. Bragachini, INTA Manfredi, Argentina,
2002, Jose Molin, USP, Brazil, 2002
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Yield Monitors in the Rest of the World

• Australia, 800 monitors used for the 2000
  harvest, 500 of those in Western Australia
• In South Africa, 15 monitors used in 2000, mainly
  in the corn growing area.
• No yield monitors used commercially in other
  parts of Africa, Eastern Europe, or Asia
• Monitors being developed for other crops,
  including cotton, sugar cane, potatoes, sugar
  beets, tomatoes and grapes. About 8 of U.S.
  potato acreage is yield monitored.

11
Precision Farming Services in the U.S.

• In 2002 variable rate application service
  offerings seem to be growing again.
• 50 of all fertilizer retailers nationwide
  offered soil sampling with GPS in 2002, mostly
  2.5 acre grids. This compares with 45 in 1999.
• 43 of all dealers offered computer controlled
  variable rate application services in 2002,
  compared to 38 in 1999.
• Over 50 of all dealerships in the Midwest offer
  these services, and 60 to 70 of cooperatives
  and regional/national chain outlets offer the
  services.

12
Increasing Percentage of U.S. Ag Retailers
Providing Variable Rate
13
Growing Use of Precision Ag Tools by Dealers to
Provide Traditional Services
From fall 1999 to spring 2002 use of GPS guidance
by custom applicators grew from about 5 to
almost 44. Growth was especially strong in the
Midwest where over half of custom applicators use
GPS guidance
Source Akridge and Whipker, 2000, Whipker
Akridge, 2001 2002
14
Farm Level Adoption of VRT in the U.S.

• Widespread use of VRT on some higher value crops,
  but in bulk commodities farmers try it on a small
  proportion of crop area.
• Overall about 10 of sugar beet and potato
  acreage received VRT fertilizer in 2000.
• About 40 of sugar beet acreage in Minnesota and
  North Dakota received VRT nitrogen in 1999
• About 11 of U.S. corn acres received VRT
  fertilizer in 2000. About 6 of soybean acres and
  4 of cotton acres received VRT fertilizer.
• 1 to 3 of corn, soybean and cotton acres
  received VRT seed or pesticide in 2000.

15
Percent of Acreage Ever Intensively Soil Tested
Source Daberkow et al, 2002
16
VRT Worldwide

• Worldwide experimentation with VRA, but
  relatively little commercial use outside of U.S.
  and Canada
• In Argentina and Australia, VRA constrained by
  high cost of soil testing
• In Western Europe VRA seems driven by
  environmental concern and regulation. Because of
  limits on overall N use, commericial use of the
  greeness sensor is growing.

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Remote Sensing

• About 5 of corn acres and 4 of soybean acres
  were managed using some kind of remotely sensed
  image in 2000.
• This could be either satellite or aerial
  photograph.
• Ag retailers are struggling with how to market
  this service. In the 2002 Purdue survey of ag
  retailers, remote sensing was the least
  profitable of precision ag services offered.

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More Rapid Adoption of Biotech

• Transgenics have been marketed as a classic
  embodied knowledge technology. New science
  marketed in a very traditional package.

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Economic Studies of Precision Agriculture

• Focus on variable rate fertilizer
• Stand alone systems with one or two inputs
• Usually had variable rate application equipment
  with whole field recommendations
• Most studies on bulk commodities because this is
  the mass market sought by manufacturers
  and retailers

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Many Articles and Websites Report Profitability
of Precision Agriculture

• Lambert and Lowenberg-DeBoer reviewed 108
  articles reporting economic results related to
  precision ag. Some 63 reported profits.
  (http//mollisol.agry.purdue.edu/SSMC/)
• Many of these studies omit important costs
  including soil testing, data analysis, training.
• Other studies overstate yield benefits and/or
  cost savings.

21
Variable Rate Profitability in Nine U.S. Studies
with Standardized Budget Methods

• 
  Grid Site-years
• Crop Inputs __ acres_
  Profitable
• Higher Value Crops
• Sugar Beets N
  2.75 100
• Extensive Dryland Crops
• Wheat, Barley N,P,K soil
  type 20
• Wheat N
  3.0 0
• Wheat, Barley P,K soil
  type 0
• Corn and Soybeans
• Corn P,K 3.0
  42
• Corn P,K soil
  type 50
• Corn, Soybean P,K
  2.5 83
• Irrigated Corn N
  0.75 50
• Corn P,K
  2.5 50
• Corn, interpolated P,K 2.1
  100
• Corn, grid average P,K 2.1
  0
• __________________________________________________
  _____
• Source Swinton Lowenberg-DeBoer, JPA, 1998.

22
Variable Rate Lime Seems Consistently Profitable
the Eastern Cornbelt
Annual Net Returns to pH Management in Indiana
23
Profitability of Yield Monitors

• Profitability depends on
• Use in diagnosing problems such as pests,
  drainage, tillage, fertility and
• Improving input decisions (e.g. hybrid,
  varieties, herbicides)

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Yield Monitor Profit Example?

• A 2000 acre grain farm
• Purchases a yield monitor and GPS for about 7000
• Uses yield data to choose better corn hybrids and
  soybean varieties.
• Improves average yields by 1 bushel/acre
• Almost pays for yield monitor first year

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Whole Farm Information Systems Benefits

• Diagnosing crop production problems
• Improving field logistics
• Supervising employees in the field
• Managing production risk
• Marketing differentiated products
• Providing traceback for food safety
• Documenting environmental compliance

26
Farm Journal Soil Density Trials Example of
Technology Testing
Source Farm Journal, July/August, 2001, p. 16.
27
The Pace of Technology has Quickened On-Farm
Testing With Yield Monitors Provides Timely
Information With Less Interference with Farm
Operations

Source Farm Journal, July/August, 2001, p. 18.
28
As-applied maps can be a useful tool in
documenting safety environmental
stewardship. This is a map of herbicide Applicati
on on the Davis Purdue Ag Center Yellow Poast
Plus 6/27/00 Green Roundup Ultra
6/28/00 Blue Poast Plus 6/28/00 Orange
Basis Gold 6/28/00
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Precision Farming Profitability
Chapters 1 - Information Technology Profits 2 -
Choosing Better Hybrids and Varieties 3 - Making
Drainage Decisions 4 - Managing Soil Fertility 5
- Increasing Cost Effectiveness of Weed
Control Plus Technical Reference Section
Edited by J. Lowenberg-DeBoer and K.
Erickson Published by Purdue University Agricultu
ral Research Programs with support from Case New
Holland, Dec., 2000. Excellence in Communication
Award, Agronomy Society of America, 2001
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Budget templates can help guide analysis of
common precision ag practices. Template for
yield monitoring for hybrid and variety choice
Source Precision Farming Profitability,
Lowenberg-DeBoer and Erickson, 2000
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Why Does Precision Agriculture Hold Opportunities
for Crop Advisors?

• Economies of Scale in some cases the skills,
  hardware and software that one producer would use
  for his operation, could be used equally
  effectively on a much larger acreage.
• Producer lifestyle choice most US farmers chose
  that occupation because of the active, outdoor
  lifestyle it offers. They did not become farmers
  to sit in front of a computer.

33
Convenience Farming?

• Convenience Agriculture is the opposite of
  Smart Farming or Knowledge Based Agriculture.
• (See Sept. , 2002 USDA Outlook
  www.ers.usda.gov/publications/agoutlook/sep2002/ao
  294i.pdf)
• Convenience agriculture economizes on management
  time.

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Management Time in Agriculture

• Management time is expensive - The average
  compensation for U.S. managers in 2001 was
  60,000/year and experienced managers can earn
  much more.
• Ag. management time may be more expensive than
  average because many producers chose
  agriculture for the active, outdoor lifestyle.
  They did not become farmers to spend hours in
  front of a computer.

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Compare Precision Agto Adoption of Hybrid Corn
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Projected Precision Agriculture Adoption
with without Knowledge Based Services

• Maturing Precision Ag requires
• Technical improvements soil sensors, higher
  resolution satellites, etc.
• Analysis tools better algorithms and software
• Retraining a generation of agricultural scientists

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Take Home Message

• The economics of precision agriculture are site
  specific.
• Use of precision agriculture technology is
  growing throughout the world.
• Precision agriculture adoption has been slower
  than expected, in part because of the management
  time required.
• Management time in agriculture may be more
  expensive than in other parts of the economy.
• Knowledge based services are the key to reducing
  the cost of precision agriculture management time.

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Developing Precision Agriculture Knowledge
Based Services Requires

• Lower cost data gathering sensors, high
  resolution remote sensing, etc.
• Better analysis tools improved algorithms in
  user friendly software.
• Knowledge based service packages make precision
  ag as easy for the producer as herbicide
  resistant soybeans
• Entrepreneurship Marketing knowledge services
  to producers who have better things to do with
  their time.

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Questions?