Helping growers interprete and manage the GPS data they gather presents a major opportunity for dealers.
Helping growers manage the data they've gathered from their GPS systems presents dealers with the next big opportunity.
Record Harvest Enterprises Inc.
Lines: Trimble Navigation (65% of product sales), Ag Leader, Tee-Jet, Rawson, Yetter, Dickey-John, SST Software
Locations: Two; a main office in Nevada, Mo., and a satellite branch in Wichita, Kan.
2006 Sales: $1.925 million
Return on Assets: 15%. More than half of pre-tax profit was reinvested in capital projects and expansion during 2006.
Owner: Steve Cubbage
Precision farming isn't a new concept, but the importance farmers place on it today is much higher than just a decade ago. Today, dealers have an excellent business opportunity available if they can help their customers be efficient and effective using precision technology.
Steve Cubbage has seized upon a market of farmers hungry to be more efficient in their operations — whether they're seeking to be more efficient with the fertilizer or crop protection products they apply or accurately place seed — to build a booming business. Not only has Cubbage helped growers identify the precision tools that meet their precision needs, but he's been able to take the data growers collect to make them better farmers.
The owner of Record Harvest in Nevada, Mo., now finds his own farming to be a weekend job, while precision agriculture takes up even more than the 8-to-5 work day the rest of the week. Today, the business he started in 1999 has 14 employees that work with farmers in Missouri, Kansas and Oklahoma. In 2007, Record Harvest was named the Farm Equipment Dealership of the Year in the "Specialty Precision Farming" category.
"Early on, precision agriculture was talked about as the saving grace of agriculture," Cubbage recently told dealers attending a special Dealers-Only session at the 2008 National No-Tillage Conference. "It was going to revolutionize what farmers were going to do and it was built up so that the farmer could do this on his own.
"Whenever we asked farmers if they were really going to do their own precision ag software work at home, we asked them whether they did their own taxes. Honestly, do they do their own taxes?
"Precision ag is no different because it's still complicated and somebody needs to guide the farmer through the maze."
As a dealer of precision agriculture technology, Cubbage says he has taken an opposite approach to the traditional equipment dealer. Rather than sell the big iron first, which can then lead to many other ancillary sales, Cubbage first considers the data that the farmer needs to gather and interpret to make management decisions. If you can manage that data to the farmer's benefit, it can lead to big iron sales.
"We handle all aspects of precision ag, but our first love has been on the data side of things," Cubbage says. "We really believe that the true value and power of precision ag is in the data and not the equipment."
For a dealer of precision ag equipment to succeed, Cubbage adds that you need to "turn things a little upside down" and "think the opposite of what traditional iron dealerships have done" when selling equipment.
"We approach precision ag as the need for a total solution," Cubbage says. "Especially with technology, our customers come to us looking for practical, honest advice. We need to find out what they want this technology to do.
"A lot of people love to sell the bells and whistles, but they have no idea whether the farmer needs them, or why they need them and even if they need them at all. When it comes time to plant in the spring, the bottom line is that the farmer just wants the technology to work."
Cubbage calls iron sales the "old school" and the management of data the "new school" that is driving equipment sales today.
"When we sell a precision ag system against traditional competition, like a John Deere or Case dealer that basically concentrates on the iron and hardware, we look at the farmer and ask whether they want somebody to take care of the precision ag from beginning to end. It all starts with the data," he adds.
'Nerds are Winning'
The biggest driving forces behind precision farming are rapidly increasing input costs and the move by many conventional-till farmers to strip-till.
With fertilizer and seed costs going through the roof, Cubbage says variable-rate components are catching up with the demand seen with auto-steer and guidance technologies.
"Strip-till in our area is growing by leaps and bounds and being in the GPS and auto-steer business, we see strip-till and this technology as a marriage made in heaven," Cubbage says. "Strip-till has been around for quite some time, but it has taken off recently because of automated guidance and, in particular, RTK automated guidance."
But in order to be successful with precision farming, you need to gather data and put it to good use. Cubbage says that if you're buying a $25,000 auto-steer system, you need to do more with it than just drive back and forth across the field. It is technology that can be used as a management tool, since you collect data anytime you are in the field. Whether you're putting down fertilizer or planting seed, it's important to collect data electronically about what you're doing when you're in the field.
"In precision ag, the nerds are winning," he says. "In our thinking, data is king."
But Cubbage adds that it's important with all the different companies, monitors and systems available today that dealers help their customers find compatibility.
"People are now asking whether the hardware is software friendly," Cubbage says. "A lot of people ask what kind of software do I need if I have a John Deere yield monitor and a Raven this or a Trimble that or an Ag Leader monitor in the mix. What kind of software is going to take care of this?"
Cubbage says the team at Record Harvest considers itself the "Geek Squad" of precision ag. That self-adopted title emphasizes the importance of precision ag dealers being able to fully understand and deliver a precision ag system that the farmer can work with without having to be the expert.
"Basically, our job is to make it work," Cubbage says. "There's a lot of power in that because what you sell is not solely based on price anymore.
"Anybody can sell a lightbar. The way we make our living is not by selling everything that everybody else on the block sells. Go to a farm show, and there are already several Ag Leader, Trimble or AutoFarm dealerships out there that can sell the same product."
The reason growers buy from Record Harvest, Cubbage says, is its ability to work with data and develop a precision ag system that meets the objectives of the farmer. They provide the type of support that makes precision farming easy for the producer.
From the very beginning, Cubbage says they've treated data management almost as its own company. They've expanded upon that by creating a company called Prime Meridian that handles soil sampling, fertility recommendations and customized prescriptions.
They've also developed a web site where a farmer can do his own soil sampling and then send in the raw data. Record Harvest's technicians will use the state university's recommendations to make a customized prescription based on the information the grower provided in the order form filled out on the web site.
"They can have that customized prescription ready to go into an Ag Leader monitor that can be put in his variable-rate strip-till machine," Cubbage says. "In some ways, he didn't have to go through his local co-op to do it. He basically bypassed that."
Cubbage says his company works with a lot of small independent fertilizer dealers, and his technicians conduct the data-crunching for the dealer to provide to his growers.
"That's why we are able to say that we offer customized solutions for a third-party provider," he says.
The heart of precision ag systems is the display, says Cubbage, and how well precision ag systems perform for growers comes down to what type of data the display will handle and what it can do.
"That display has become the center of the strip-till universe," Cubbage says. "Most of our experience personally has been with Ag Leader Insight. There are several options out there, but one thing we have grown up with, being Trimble AutoPilot dealers, in the nice compatibility between the Ag Leader System and Trimble AutoSteer.
"The trick is that the Ag Leader Insight is a tool for year-round precision farming. We are able to customize systems for what that farmer wants to do around that particular monitor."
Cubbage says there is a lot of focus on displays, and farmers tend to want to know what is the best display. He says farmers are literally choosing their auto-steer systems and strip-till systems based on what display works best.
"Of course, they want to know whether it controls auto-steer, but they are looking to control as many as five or more products," Cubbage adds. "They want automatic section control, variable-rate control or they want a standardized data format.
"But they also want it to be compatible with many third-party controllers, valves, sensors and monitors. And again, they want to know what software works with that monitor so they can get data in and out efficiently."
With the price of today's inputs, Cubbage says that variable-rate technology is no longer an option but is mandatory for growers. He's seen a resurgence of variable-rate technology and the need for it to be integrated into strip-till and auto-steer systems.
"You basically better put your money where it will do the most good and that applies when you're putting down fertilizer with strip-till. And that system needs to be supported. You literally need that Geek Squad out there supporting and knowing that system," Cubbage says.
Using shape file format in variable-rate technology is also important. The USDA uses shape file format, and due to the documentation they require with programs like EQIP or CSP, growers need compatibility. It's important to share files with local co-ops and clients that work with the USDA in order to receive monies through programs they fund.
Cubbage says one of the interesting things happening with precision technology is that growers are actually influencing their local ag retailers to adopt the same types of technology, particularly if they are using RTK.
"They want the co-op sprayer to go down the same tram or guidance line that they planted and applied the fertilizer, so that compatibility and being able to share guidance lines has become very important," Cubbage adds.
When it comes to variable-rate technology, the dealership can bring a lot of value to growers if it can master the technology. Cubbage says that even as strip-till has been adopted quickly in his region, it can be complicated because there are a lot of third-party pieces that go into making the practice work.
"Record Harvest specializes in doing the dirty work that the traditional dealers don't even want to mess with," he says. "We get a lot of calls from traditional iron dealers who ask whether we can help them. They often just turn it all over to us."
There are a lot of pieces that make up variable-rate technology. Some of these include whether a grower is using dry vs. liquid control; flow meters; hydraulic drives; sensors for bin levels, pressure, product and blockage; automatic boom control; real-time and as-applied mapping; and software compatibility.
Cubbage calls all of these tools variable-rate "spaghetti" and an opportunity for dealers. Those who can navigate these tools successfully are the ones bringing value to their customers.
"Somebody needs to figure it out and make it work so that it is compatible with the entire system," he says.
When growers seek accuracy, particularly among those looking to utilize strip-till, Cubbage says he recommends nothing else but RTK.
"I want to be able to repeat that pass time after time and be able to place that seed in the spring where I put the fertilizer. I don't like to mess around with just 'close enough.' With RTK guidance, you want to come back on that line and repeat it," Cubbage says.
However, one of the services that has helped Record Harvest grow, Cubbage says, is a network that they've placed in the middle of Kansas and in western Missouri that allows RTK to function as designed. That network is key to making RTK grow in local dealerships.
"We believe this is driving our auto guidance sales. It is in the backyard of where strip-till is taking place," Cubbage says. "We have built that network and it is having a positive impact on us being able to compete and grow our sales on the auto-steer side as well."
Cubbage has organized a group of Trimble dealers at www.cropcircleRTK.com where visitors can view the coverage and location of towers and learn about how the system works.
Bottom line, Cubbage says is that data is the most valuable crop that growers are harvesting today. The new business opportunity for dealers is putting together a precision ag system for growers that helps them use that data to improve their efficiency and efficacy.
"As dealers — even if you are a traditional iron dealer — you need to seek out what I call the strip-till team if that's what you want to concentrate on," Cubbage says. "But we say that you should build a precision farming system, not just sell equipment, because that is what has caused the slow start for many dealers with regard to precision ag. They just sell equipment and then 2 or 3 years later, it ends up lying in the corner of a shop. And we don't want to see that."
Economics, Conservation Driving Strip-Till
In southwest Missouri and eastern Kansas, Steve Cubbage sees a lot of conventional-till farmers making the switch to strip-till. It's providing them a way to get everything done in the fall and early spring, particularly helpful with the narrower planting windows and the need to get corn planted at the optimal time.
"When you consider the strip-till savings on fuel and the conservation reasons, it's all starting to add up for growers," says the owner of Record Harvest in Nevada, Mo. "Also, what's driving the move to strip-till is that people are starting to understand RTK technologies. They realize that they need to be very strategic about their fertilizer placement and very frugal about where they spend their dollars. They are asking what this technology can do for them."
Cubbage says the strip-till system has worked well in the clay pan soils on his farm.
"Basically, strip-till has worked very well because water is a scarce resource, especially in August, and root growth development in that strip is a large part of our 10-bushel yield increase that we've seen with corn," he says. "We're probably seeing about a 3-4 bushel advantage in soybeans, and I'll certainly take that any day of the week."
Strip-Till Lifts Yields While Reducing Costs
Strip-till has allowed Steve Cubbage to use 20% less fertilizer while increasing corn yields by about 10 bushels per acre. On his Nevada, Mo., farm, Cubbage is able to fertilize for corn and soybeans at the same time.
"Basically, we strip-till the corn and then no-till soybeans the following year. And with RTK, we can hit that guidance line or zone dead-on for multiple years in a row," Cubbage says. "We are using the same guidance lines on our farm that we've used for the past 5 years. We are actually building that zone up and being able to hit that mark time after time."
The bottom line, Cubbage says, is that growers need to be doing a better job applying fertilizer with prices on the rise.
"We are finding that the best-producing area of these fields are obviously the lowest in fertility and many growers don't realize that," Cubbage says. "If that's not happening in their fields, they probably aren't maximizing production like they should.
"For growers who have gone to a regime with precision farming and have stuck to it, we can prove the benefits time and time again. Economics will force growers to be very proactive and they can't sit on their hands."
The Power of Data
What makes data so powerful is that it can be sent anywhere in the world to be analyzed and interpreted to bring solutions to a growers' operation.
"The nice thing about data is that it is electronic," says Steve Cubbage, owner of Record Harvest in Nevada, Mo. "I don't care if you are in France, Hawaii or Japan — and we've dealt with a specialty soybean company with offices in Japan — it doesn't matter where you're located because that data can be sent anywhere.
"It's no different than having a mortgage processed in Pennsylvania or New York. That part is what gives people the real power and gives us the ability to transcend geography."