HADDONFIELD, N.J. (DTN) -- Steve Hess may be the grandfather of nine, but when it comes to farming, he is a millennial at heart. In fact, Hess, his wife Phyllis and their son Marcus are adopting cutting-edge technology this season they hope will help lift their Bushnell, Illinois, grain yields and profit margins through 2016 and beyond.
This spring, the Hess partners spent $70,000 rebuilding a five-year-old planter to make it capable of seeding multiple hybrids or varieties in the same field. Software glitches were a headache during late nights planting, Steve admitted, not unlike the pioneering days of GPS. But he remains hopeful that Beck's Hybrids' research showing 13-bushel advantages in corn yield will make the effort worthwhile.
"I wish I'd taken a picture of all the planter parts I've replaced in my career. But if we capture just half of the $40-per-acre advantage Beck's found in corn, plus some benefits in soybeans, we should pay for the upgrades in two years or less," Steve said.
For $500 per year, the Hess family also became members of Farmers Business Network (FBN), a two-year-old cloud-based data service backed by Google Ventures. Already it has enrolled members with more than 7 million acres. By sharing actual data from those fields, the company can independently assess yields, plant populations and return on investments for hybrids planted on similar soil types.
After mining the FBN seed finder database, the Hesses switched their biggest order to a seed company that offered more top-yielding hybrids for their soil types, again hoping for a significant yield boost.
Through FBN's bulk purchasing service, they also obtained a bid sheet on about 180 mostly generic ag chemicals they could buy delivered to the farm. Though they chose not to purchase direct from FBN in 2016, they saved roughly 8% to 10% on their crop protection chemicals ordered from three local suppliers. One downside was more management and more generics, Steve noted. However, access to the price list itself boosted their confidence when shopping for inputs.
"We just ask our local suppliers to give us their best price up front. We don't have a lot of time to negotiate," Steve said.
THIRD TECH WAVE
The Hesses are riding what industry research firm Caledonia Solutions calls the "Third Wave" of modern ag technology. That makes them part of a small group of commercial farmers willing to boost spending on new farm equipment and agronomic data technology over the next three years, despite the worst farm recession in decades.
"The 'First Wave' of modern ag tech was the rapid and widespread adoption of biotech seed in the 1990s, followed by a second wave of even faster adoption of GPS steering," said Robert Hill, principal of Caledonia Solutions and author of a new study on adoption of Corn Belt farm technologies. "The first wave was mainly driven by yield boosts, and the second wave mainly by cost savings. In this wave, it looks like farm operators are getting a strong dose of both benefits."
Roundup-resistant genes shook the ag chemical industry in the 1990s, prompting a series of chemical mergers and shotgun marriages with the seed industry. Many of today's new technologies and services are as potentially disruptive, Hill added.
For example, upstarts like FarmLink (a DTN partner) are using data gleaned from their national combine leasing business to compare yield performance among farms with similar soil types, typography and weather. Benchmarking yields among similar farms allows growers to see how much potential they have to improve performance.
"We were proud of our 217-bushel-per-acre corn yield in 2013, until FarmLink's TrueHarvest program showed us we needed to yield 229 bushels per acre to be in the 95th percentile for our area," said Moe Russell, a financial consultant who farms with family in Monticello, Iowa. "We went home with our tail between our legs." The family has subscribed to the benchmarking service every year since, field testing practices to boost their rankings.
"I tell my farm clients, you don't have to use these technologies, but you will have to compete with those who do," Russell said.
Cost savings could be another incentive to try some data services. For example, FBN, Conservis and Granular are in various stages of collecting cost of production data among members. Ultimately, they could share their version of "Kelley Blue Book" prices to benchmark what farmer members actually pay for hundreds of brand-name inputs. The services call their price lists "democratizing data."
"That gives growers insight into the opaque," said Granular co-founder Mike Preiner, who noted that prices Granular customers paid for Roundup PowerMAX plunged 12% this year.
On the other hand, transparency may not be popular with retailers who fear FBN and other services could become the "Wal-Mart" of the crop protection business, should they choose to sell to members direct.
Upstarts like FBN believe retailers favor bundling product and service together to make pricing unclear. Rebates can also cloud accurate price comparisons.
"Data managers are challenging the traditional information networks and farm input supply channels in the ag industry," Hill said. Long term that could squeeze local co-op and retailer margins, leading to further consolidation in the supply chain.
Hill's Caledonia report is based on a March 2016 survey of more than 300 Midwest farmers averaging nearly 4,000 acres of corn, wheat or soybeans. It studied both adoption rates and satisfaction with 34 equipment technologies as well as agronomic data sharing services.
Among the study's main findings:
-- The rate of adoption of new ag technologies is increasing, despite low commodity prices. Between 2013 and 2019, growers said the number of technologies they deploy will more than double, an aggressive pace by historical standards.
-- Growers have economic objectives for adopting new technologies, with some chosen for input cost savings and others more for yield boost.
-- Those who have embraced the most recent equipment and data technologies believe they have hiked their corn yields 11% and shaved about 9% off their input expenses. They estimate they've only tapped about half the advantages current technology can offer.
-- Spray equipment with automatic boom shut-offs will be in use by 98% of commercial operators by 2019, up from 89% now. More than three-fourths of operators who have already adopted the technology say it exceeded their expectations, largely by reducing input costs.
-- Planter/seeders with on-off row clutches ran a close second in most popular equipment technology, also largely for reducing input costs. Some 96% of commercial growers intend to adopt that technology by 2019, up from 84% now.
-- In the next three years, growers said the most rapidly adopted technologies would be predictive nitrogen tools, UAVs/aerial imagery and wireless weather stations.
-- Hybrid recommendations matched to their field and soil type is the most popular feature growers want from data analytic services, 51% reported. They'd be willing to pay several dollars per acre for that service. However, that's far less than the $15 per acre some seed companies had hoped to charge for full-service agronomic prescriptions.
In the Hesses' case, Steve is optimistic that new technologies can help generate more yields and shave their production costs to fit the era of sub-$4 corn. He's willing to manage the software headaches and learning curves that accompany them.
"We've also got a daughter in high school. It will be 10 more years before I can retire," the 60-year-old father and grandfather said. "I can't afford to get soft in the game -- I've got to get her through college."
EDITOR'S NOTE: This is the first in an occasional series on how farmers are adopting new agronomic and farm business technologies.
Marcia Taylor can be reached at email@example.com
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