1. MAKING PRECISION AGRICULTURE PAY! Frannie Rogers BIOEN/SOIL 4213

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

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

11. 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

12. References • An overview of Precision Farming Technology: Is It for You? • http://www.gov.mb.ca/agriculture/facts/fbc08s00.html • Economics of Precision Farming: Payoff in the Future • http://mollisol.agry.purdue.edu/SSMC/publications/economic_issues.html