Several weeks ago, now, I had a conversation with a research analyst at an investment banking advisory firm who was looking for some perspective on the current and future prospects of the precision farming industry.
As an independent firm, the company isn’t attached to any particular ag equipment manufacturer, but the analyst was interested in how well the OEMs are positioned in terms of technology development.
Certainly, manufacturers are plotting their own precision courses, especially on the agronomic service side. Many John Deere dealers are incorporating in-house agronomists, while Case IH and other suppliers are opting for more external partnerships. (In our Summer edition of Precision Farming Dealer, we break down the benefits and challenges of adding in-house agronomic services.)
There’s no correct, or even direct path to getting farmers to invest and adopt data management services offered by equipment dealerships, and it continues to be an evolution. Regardless of where customers are getting their agronomic advice, someone is going to have to get out on that farmer’s operation and have a face-to-face conversation about turning their data into decisions.
Eventually my conversation with the research analyst arrived at the million-dollar question — or preferably for retailers, the multi-million-dollar question: “Are dealers making money with precision farming?”
It’s not a simple question to answer as dealers well know, because there are numerous ways a precision business can benefit a bottom line, beyond direct sales. Still, drawing some analysis from the Precision Farming Dealer 2017 Benchmark Study, 75.6% of respondents identified themselves as traditional farm equipment dealers.
Among this group, 41.8% reported 2016 revenue growth of at least 2% and 58.3% project revenue growth of at least 2% this year. So, there is optimism and expectation for precision growth, at least in the coming year.
But it’s worth noting that despite the positive outlook, there is still concern about how the ag economy could influence farmers’ willingness to invest in technology.
Says one dealer from Ohio, “Low income levels have slowed the demand for services. We need to convince customers the economic data that will be generated by technology can help them make better input decisions.”
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