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Transcript of 2009 Precision Ag Dealer Survey
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2009 Precision Agricultural
Services: Dealership Survey Results
Dr. Linda D. Whipker*Dr. Jay T. Akridge
* Linda D. Whipker is a marketing consultant in Raleigh, NC. Jay . Akridge is theGlenn W. Sample Dean o Agriculture at Purdue University. Te fnancial support o
rimble or this project is grateully acknowledged.
AgriculturalCenter for Food and
Businessat Purdue University
Developed by the Center for Food and Agricultural BusinessKrannert Building, Room 781 / 403 W. State Street / West Lafayette, IN 47907-2056tel (765) 494-4247 / fax (765) 494-4333 / www.agecon.purdue.edu/cab
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2009 Precision Agricultural Services
Dealership Survey Results
Dr. Linda D. Whipker*
Dr. Jay T. Akridge
Working Paper #09-16
September 2009
Sponsored by:
CropLife Magazine
and
Center for Food and Agricultural Business
Dept. of Agricultural Economics
Purdue University
* Linda D. Whipker is a marketing consultant in Raleigh, NC. Jay T. Akridge is Glenn W. Sample Dean of
Agriculture at Purdue University. The financial support of Trimble for this project is gratefully acknowledged.
It is the policy of Purdue University that all persons have equal opportunity and access to its
educational programs, services, activities and facilities without regard to race, religion, color, sex, age,
national origin or ancestry, marital status, parental status, sexual orientation, disability or status as a veteran.
Purdue University is an Affirmative Action institution.
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Table of Contents
INTRODUCTION ....................................................................................................................................................... 1QUESTIONNAIRE AND DATA ANALYSIS NOTES .......................................................................................................... 1
THE RESPONDENTS ................................................................................................................................................ 2CUSTOM APPLICATION ......................................................................................................................................... 7USE OF PRECISION TECHNOLOGIES AND OFFERINGS OF SITE-SPECIFIC SERVICES ................... 14
USE OF PRECISION TECHNOLOGIES........................................................................................................................... 14PRECISION SERVICE OFFERINGS ............................................................................................................................... 18AFOCUS ON SOIL SAMPLING.................................................................................................................................... 21VARIABLE RATE APPLICATION................................................................................................................................. 25PROFITABILITY OF PRECISION SERVICE OFFERINGS ................................................................................................. 32CUSTOMER USE OF PRECISION SERVICES ................................................................................................................. 35
WHATS EXPECTED OF PRECISION TECHNOLOGY IN THE FUTURE? ................................................ 44BARRIERS TO GROWTH AND EXPANSION IN PRECISION AGRICULTURE ........................................ 46
CUSTOMER BARRIERS .............................................................................................................................................. 46DEALER BARRIERS ................................................................................................................................................... 48TECHNOLOGY BARRIERS .......................................................................................................................................... 51
RETAILER-MANUFACTURER ROLES .............................................................................................................. 53SUMMARY ................................................................................................................................................................ 55
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List of Figures
FIGURE 1. STATES REPRESENTED .................................................................................................................................. 2FIGURE 2. ORGANIZATION TYPES BY REGION................................................................................................................ 3FIGURE 3. NUMBER OF RETAIL OUTLETS OWNED OR MANAGED................................................................................... 4FIGURE 4. NUMBER OF RETAIL OUTLETS OWNED OR MANAGED BY REGION ................................................................ 4FIGURE 5. 2008ANNUAL AGRONOMY SALES AT LOCATION.......................................................................................... 5FIGURE 6. 2008ANNUAL AGRONOMY SALES AT LOCATION BY REGION ....................................................................... 5FIGURE 7. 2008ANNUAL AGRONOMY SALES AT LOCATION BY ORGANIZATIONAL TYPE IN THE MIDWEST .................. 6FIGURE 8. RESPONSIBILITY OF SURVEY RESPONDENT ................................................................................................... 7FIGURE 9. ACRES CUSTOM APPLIED .............................................................................................................................. 8FIGURE 10. ACRES CUSTOM APPLIED BY REGION.......................................................................................................... 8FIGURE 11. ACRES CUSTOM APPLIED BY ORGANIZATIONAL TYPE IN THE MIDWEST..................................................... 9FIGURE 12. CUSTOM APPLICATION OF FERTILIZER AND PESTICIDES............................................................................ 10
FIGURE 13. CUSTOM APPLICATION OF FERTILIZER AND PESTICIDES BY REGION ......................................................... 11FIGURE 14.USE OF GPSGUIDANCE SYSTEMS FOR CUSTOM APPLICATION .................................................................. 11FIGURE 15. USE OF GPSGUIDANCE SYSTEMS FOR CUSTOM APPLICATION BY REGION: MANUAL CONTROL ............. 12FIGURE 16. USE OF GPSGUIDANCE SYSTEMS FOR CUSTOM APPLICATION BY REGION: AUTO CONTROL .................. 13FIGURE 17. USE OF GPSGUIDANCE SYSTEMS FOR CUSTOM APPLICATION BY ORGANIZATIONAL TYPE IN THE
MIDWEST: MANUAL CONTROL ....................................................................................................... 13FIGURE 18. USE OF GPSGUIDANCE SYSTEMS FOR CUSTOM APPLICATION BY ORGANIZATIONAL TYPE IN THE
MIDWEST: AUTO CONTROL............................................................................................................. 14FIGURE 19. USE OF PRECISION TECHNOLOGY.............................................................................................................. 15FIGURE 20. USE OF PRECISION TECHNOLOGY OVER TIME ........................................................................................... 16FIGURE 21. USE OF PRECISION TECHNOLOGY BY REGION ........................................................................................... 17FIGURE 22. USE OF PRECISION TECHNOLOGY BY ORGANIZATIONAL TYPE IN THE MIDWEST ...................................... 18FIGURE 23. PRECISION AG SERVICES OFFERED OVER TIME ........................................................................................ 19FIGURE 24. PRECISION AG SERVICES OFFERED BY REGION......................................................................................... 20FIGURE 25. PRECISION AG SERVICES OFFERED OVER TIME IN THE MIDWEST ............................................................. 20FIGURE 26. PRECISION AG SERVICES OFFERED BY ORGANIZATIONAL TYPE IN THE MIDWEST .................................... 21FIGURE 27. TYPES OF SOIL SAMPLING OFFERED.......................................................................................................... 22FIGURE 28. TYPES OF SOIL SAMPLING OFFERED OVER TIME....................................................................................... 22
FIGURE 29. TYPES OF SOIL SAMPLING OFFERED BY REGION ....................................................................................... 23FIGURE 30. TYPES OF SOIL SAMPLING OFFERED BY ORGANIZATIONAL TYPE IN THE MIDWEST .................................. 23FIGURE 31. GRID SIZES USED IN GRID SAMPLING ....................................................................................................... 24FIGURE 32. VARIABLE RATE APPLICATION OFFERED OVER TIME ............................................................................... 25FIGURE 33. PRECISION APPLICATION OFFERED FOR EACH INPUT TYPE ....................................................................... 26FIGURE 34. VARIABLE RATE SEEDING BY REGIONS AND ORGANIZATIONAL TYPES WITHIN THE MIDWEST ................. 27
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FIGURE 35. PRECISION APPLICATION OF FERTILIZEROFFERED BY REGION.................................................................. 28FIGURE 36. PRECISION APPLICATION OFLIMEOFFERED BY REGION ........................................................................... 28FIGURE 37. PRECISION APPLICATION OF CHEMICALSOFFERED BY REGION ................................................................. 29FIGURE 38. PRECISION APPLICATION OFFERED OVER TIME IN THE MIDWEST ............................................................. 29FIGURE 39. PRECISION APPLICATION OF FERTILIZEROFFERED BY ORGANIZATIONAL TYPE IN THE MIDWEST............. 30
FIGURE 40. PRECISION APPLICATION OFLIMEOFFERED BY ORGANIZATIONAL TYPE IN THE MIDWEST....................... 31FIGURE 41. PRECISION APPLICATION OF CHEMICALSOFFERED BY ORGANIZATIONAL TYPE IN THE MIDWEST ............ 31FIGURE 42. PROFITABILITY OF PRECISION SERVICE OFFERINGS .................................................................................. 33FIGURE 43. PROFITABILITY OF PRECISION APPLICATION OFFERINGS........................................................................... 33FIGURE 44. RESPONDENTS GENERATING A PROFIT FROM PRECISION SERVICES .......................................................... 34FIGURE 45. RESPONDENTS GENERATING A PROFIT FROM PRECISION SERVICES IN THE MIDWEST ............................... 35FIGURE 46. ESTIMATED MARKET AREA USING PRECISION SERVICES.......................................................................... 36FIGURE 47. ESTIMATED MARKET AREA USING YIELD MONITORS AND GUIDANCE SYSTEMS ..................................... 37FIGURE 48. ESTIMATED MARKET AREA USING SINGLE NUTRIENT CONTROLLER-DRIVEN APPLICATION ................... 38FIGURE 49. ESTIMATED MARKET AREA USING MULTI-NUTRIENT CONTROLLER-DRIVEN APPLICATION.................... 38FIGURE 50. ESTIMATED MARKET AREA USING PRECISION SERVICES IN THE MIDWEST .............................................. 39FIGURE 51. ESTIMATED MARKET AREA USING PRECISION SERVICES IN THE OTHER STATES...................................... 40FIGURE 52. ESTIMATED MARKET AREA USING YIELD MONITORS AND GUIDANCE SYSTEMS IN THE MIDWEST .......... 40FIGURE 53. ESTIMATED MARKET AREA USING YIELD MONITORS AND GUIDANCE SYSTEMS IN OTHER STATES......... 41FIGURE 54. ESTIMATED MARKET AREA USING SINGLE NUTRIENT CONTROLLER-DRIVEN APPLICATION IN THE
MIDWEST......................................................................................................................................... 41FIGURE 55. ESTIMATED MARKET AREA USING SINGLE NUTRIENT CONTROLLER-DRIVEN APPLICATION IN
OTHER STATES ................................................................................................................................ 42FIGURE 56. ESTIMATED MARKET AREA USING MULTI NUTRIENT CONTROLLER-DRIVEN APPLICATION IN THE
MIDWEST......................................................................................................................................... 42FIGURE 57. ESTIMATED MARKET AREA USING MULTI NUTRIENT CONTROLLER-DRIVEN APPLICATION IN OTHER
STATES ............................................................................................................................................ 43FIGURE 58. EMERGING PRECISION TECHNOLOGIES THAT WILL HAVE AN IMPACT ON BUSINESS ................................ 44FIGURE 59. EXPECTED INVESTMENT IN PRECISION TECHNOLOGY IN 2009 .................................................................. 45FIGURE 60. EXPECTED INVESTMENT IN PRECISION TECHNOLOGY BY REGION............................................................. 46FIGURE 61. CUSTOMER ISSUES THAT CREATE A BARRIER TO EXPANSION/GROWTH IN PRECISION AGRICULTURE ...... 47FIGURE 62. PERCENT OF RESPONDENTS WHO AGREE/STRONGLY AGREE THAT CUSTOMER ISSUES CREATE A
BARRIER TO EXPANSION/GROWTH IN PRECISION AGRICULTURE..................................................... 47FIGURE 63. CUSTOMER ISSUES CREATING A BARRIER TO GROWTH IN PRECISION AGRICULTURE BY REGION............. 48FIGURE 64. DEALER ISSUES THAT CREATE A BARRIER TO EXPANSION/GROWTH IN PRECISION AGRICULTURE........... 49FIGURE 65. PERCENT OF RESPONDENTS WHO AGREE/STRONGLY AGREE THAT DEALER ISSUES CREATE A
BARRIER TO EXPANSION/GROWTH IN PRECISION AGRICULTURE..................................................... 50FIGURE 66.DEALER ISSUES THAT CREATE A BARRIER TO EXPANSION/GROWTH IN PRECISION AGRICULTURE BY
REGION............................................................................................................................................ 50
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FIGURE 67. TECHNOLOGY ISSUES THAT CREATE A BARRIER TO EXPANSION/GROWTH IN PRECISIONAGRICULTURE ................................................................................................................................. 51
FIGURE 68. PERCENT OF RESPONDENTS WHO AGREE/STRONGLY AGREE THAT TECHNOLOGY ISSUES CREATE ABARRIER TO EXPANSION/GROWTH IN PRECISION AGRICULTURE..................................................... 52
FIGURE 69. TECHNOLOGY ISSUES THAT CREATE A BARRIER TO PRECISION TECHNOLOGY BY REGION ....................... 52FIGURE 70. IMPORTANCE OF DIFFERENT ASPECTS OF THE RETAILER-MANUFACTURER ROLE .................................... 53FIGURE 71. IMPORTANCE OF DIFFERENT ASPECTS OF THE RETAILER-MANUFACTURER ROLE BY REGION .................. 54FIGURE 72. CHANGE EXPECTED IN THE NEXT 2 TO 3YEARS WITH DEALERS'RELATIONSHIP WITH
MANUFACTURERS............................................................................................................................ 55
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2009 Precision Agricultural Services
Dealership Survey Results
IntroductionIn the spring of 2009, Crop Lifemagazine and Purdue Universitys Center forFood and
Agricultural Business conducted a survey of crop input dealers for the 14th consecutive year. InFebruary, a questionnaire was mailed to 2500 Crop Life retail crop input dealership readersacross the US. (See Appendix I to this report for a copy of the questionnaire.) A total of 258questionnaires were returned, with 241 being usable. This provided an effective response rate of9.6 percent, the lowest response rate in the 14 year history of the project. (In prior years,response rates have ranged from a high of 38 percent in 1996 to a low of 11 percent in 2001 and2008.)
Consistent with previous surveys, dealerships were asked questions about the types of
precision services they offer and/or use in their businesses, how quickly their customers areadopting precision agriculture practices, and how profitable they are finding precision services tobe in their businesses. This year additional questions were asked about the current barriers toadoption in terms of customers, dealers and technology, and their view on what futuredevelopment in precision technology services would have the most impact on their business.Also explored this year were retailer-manufacturer roles and the changes expected over the next2 to 3 years.
Questionnaire and Data Analysis Notes
As in other years, questionnaires were deemed unusable for several reasons. Some
questionnaires were not filled out completely; others were from wholesalers who did not selldirectly to farmers; some respondents sold only seed, while a few were from farmers. This yearthere were 17 unusable questionnaires among the 241 returned.
In 2000, 2001, and 2007 the data were statistically weighted to have the samedemographics asprevious years demographics in order to make year-to-year comparisons moremeaningful. These demographics included the region, organizational type and outlet size interms of sales. Several procedural changes in the survey process in 2000 and 2001 made thisnecessary (timing of the survey, survey length, etc.). In 2007, the sample demographics did notcompare to other years, resulting in the need to weight by demographics once again. This year,despite the low response rate, the demographic results were similar to previous years and
therefore no weighting was necessary.
The data were analyzed to identify statistical differences by region (Midwest versus otherstates) and differences between organizational types within the Midwest (cooperative, localindependent, regional/national). Where charts or data are provided for these breakouts,differences are statistically different at p < .05 unless specifically stated otherwise.
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The Respondents
The 241 survey respondents came from 33 states with the highest state representationfrom Illinois, accounting for 11.0 percent of the respondents, and Indiana with 10.1 percent ofthe respondents (Figure 1). By region, the Midwest was heavily represented in the sample, with68 percent of the respondents being from the Midwest states of Indiana, Illinois, Iowa, Kansas,Wisconsin, Minnesota, Michigan, Missouri, Nebraska, North and South Dakota, and Ohio.Sixteen percent of the respondents were from the South, 9 percent were from the West, and 7percent were from the Northeast.
Figure 1. States Represented
11.0%
10.1%
9.7%
8.4%
7.6%7.2%
14.3%
3.4%
3%
3%
4.2%
3.0%
2.1%
6.3%
2.1%
4.6%
0% 10% 20% 30% 40%
Illinois
Indiana
Iowa
Minnesota
Ohio
Nebraska
Other States
Washington
Montana
Other States
Texas
North Carolina
Oklahoma
Other States
Pennsylvania
Other States
% of respondents
Midwest (68.4%)
West (9.3%)
South (15.6%)
Northeast (6.8%)
2009 Base: 241 (33 states represented)
Responding dealerships represented a variety of organizational types with 4 out of 10 ofthe sample respondents being cooperatives (39 percent), 42 percent representing localindependents, and 14 percent being part of a national or regional chain of dealerships.
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Figure 2 shows the organizational types for the Midwest and non-Midwesternrespondents. Cooperatives accounted for approximately half of the Midwest sample while localindependents accounted for approximately a third of the Midwest sample. In non-Midwesternstates, local independents accounted for 61 percent of the sample this year.
Figure 2. Organization Types by Region
48.8%
32.7%
12.3%
17.3%
61.3%
18.7%
0% 20% 40% 60% 80%
Cooperative
Local independent
Regional/national
% of respondents
Midwest
Other states
2009 Base: Midwest: 162; Other states: 75
Statistically different between regions at p
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Figure 3. Number of Retail Outlets Owned or Managed
27.4%
29.9%
18.3%
5.4%
19.1%
0% 10% 20% 30% 40% 50% 60%
One
2-5
6-15
16-25
More than 25
% of respondents2009 Base: 241
Figure 4. Number of Retail Outlets Owned or Managed by Region
22.8%
31.5%
22.2%
5.6%
17.9%
37.3%
25.3%
9.3%
5.3%
22.7%
0% 20% 40% 60%
One
2-5
6-15
16-25
More than 25
% of respondents
MidwestOther states
2009 Base: Midwest: 162; Other states: 75
Statistically different between regions at p
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in agronomy sales in 2008 compared to only 40 percent of the respondents from non-Midwesternstates (Figure 6).
Figure 5. 2008 Annual Agronomy Sales at Location
11.2%
12.1%
11.7%
15.0%
50.0%
0% 10% 20% 30% 40% 50%
Under $1 million
$1 million to under$2 million
$2 million to under$3 million
$3 million to under$5 million
$5 million and
over
% of respondents2009 Base: 240
Figure 6. 2008 Annual Agronomy Sales at Location by Region
6.8%
12.4%
14.3%
11.8%
54.7%
20.0%
12.0%
5.3%
22.7%
40.0%
0% 20% 40% 60%
Under $1 million
$1 million to under$2 million
$2 million to under$3 million
$3 million to under$5 million
$5 million and over
% of respondents
Midwest
Other states
2009 Base: Midwest: 161Other states: 75 Statistically different between regions at p
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Within the Midwest, there were significant differences in annual crop input sales byorganizational type. Local independents were not only smaller in terms of the number of outletsin their businesses, but their outlets were also significantly smaller in terms of crop input salesdollars per outlet (Figure 7). Only a third of the local independents had outlet sales of over $5million, compared to almost two-thirds of both the cooperatives and regional/national
dealerships.
Figure 7. 2008 Annual Agronomy Sales at Location by Organizational Type in the Midwest
5.1%
10.1%
10.1%
8.9%
65.8%
13.5%
21.2%
21.2%
11.5%
32.7%
0.0%
0.0%
10.0%
25.0%
65.0%
0% 20% 40% 60%
Under $1 million
$1 million tounder $2 million
$2 million tounder $3 million
$3 million tounder $5 million
$5 million andover
% of respondents
Cooperative
Local Independent
Regional/National
2009 Base:Cooperative: 79Local Independent: 52Regional/National: 20
Statistically different between org. types at p
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Figure 8. Responsibility of Survey Respondent
Owner/Location Mgr63.0%
Department mgr11.3%
Sales/sales mgr12.2%
Technical consultant5.9%
Precision mgr3.8%
Other positions3.8%
2009 Base: 238
Custom Application
Custom application was offered by 86 percent of the respondents. (Custom applicationhere is defined as dealership application of fertilizer, pesticides, and/or custom seeding.) Overhalf of the respondents custom applied more than 25,000 acres per year (63 percent) (Figure 9).
Across the U.S., however, custom application was most common in the Midwest where 89percent of the respondents offered custom application services compared to 81 percent of therespondents from other states (Figure 10).
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Figure 9. Acres Custom Applied
13.9%
11.8%
11.0%
26.2%
37.1%
0% 20% 40% 60% 80% 100%
No customapplication
Under 10,000 acres
10,001 to 25,000acres
25,001 to 50,000acres
Over 50,000 acres
% of respondents2009 Base: 237
Figure 10. Acres Custom Applied by Region
10.7%
5.0%
10.7%
28.3%
45.3%
18.9%
25.7%
12.2%
23.0%
20.3%
0% 20% 40% 60% 80% 100%
No customapplication
Under 10,000acres
10,001 to 25,000
acres
25,001 to 50,000acres
Over 50,000 acres
% of respondents
Midwest
Other states
2009 Base: Midwest: 159;Other states: 74
Statistically different between regions at p
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Similar to other years, local independents in the Midwest were less likely to offer customapplication than were other organizations, with 14 percent of the local independents not offeringcustom application compared to only 8 percent of the cooperatives and none of theregional/nationals (Figure 11).
Figure 11. Acres Custom Applied by Organizational Type in the Midwest
7.6%
5.1%
10.1%
24.1%
53.2%
13.5%
7.7%
15.4%
26.9%
36.5%
0.0%
0.0%
5.0%
50.0%
45.0%
0% 20% 40% 60% 80% 100%
No customapplication
Under 10,000 acres
10,001 to 25,000acres
25,001 to 50,000acres
Over 50,000 acres
% of respondents
Cooperative
Local Independent
Regional/ National
2009 Base: Cooperatives: 79;Local Independents: 52;Regional/Nationals: 20
Not statistically different between org. types at p
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When asked specifically about custom application of fertilizer versus pesticides,respondents custom applied a slightly greater proportion of the fertilizer they sold relative topesticides. On average, respondents who indicated their outlet offered custom applicationapplied 63 percent of the fertilizer they sold and 56 percent of the pesticides they sold (Figure12). A quarter of the respondents (23 percent) said their dealership custom applied over 75
percent of the pesticides sold. Over a third of the respondents (41 percent) said they customapplied over 75 percent of the fertilizer they sold.
Figure 12. Custom Application of Fertilizer and Pesticides
4.0%
14.6%
27.1%
31.2%
23.1%
1.5%
15.3%
20.3%
21.8%
41.1%
0% 20% 40% 60% 80% 100%
None
1 to 25%
26 to 50%
51 to 75%
Over 75%
% of respondents offering custom application
%o
fmaterialscustoma
pplied
Pesticides
Fertilizer
2009 Base: 202
Average fertilizer custom applied: 62.6%Average pesticides custom applied: 55.5%
Those dealerships from the Midwest who offered custom application typically applied agreater proportion of the fertilizer and pesticides they sold. Midwestern respondents said theycustom applied an average of 68 percent of the fertilizer they sold and 61 percent of thepesticides they sold while those from non-Midwestern states applied an average of 49 percent ofthe fertilizer sold and 42 percent of the pesticides sold (Figure 13). In the Midwest, there wereno differences in the average amount of fertilizer or pesticides custom applied by organizationaltype.
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Figure 13. Custom Application of Fertilizer and Pesticides by Region
68.3%
60.8%
48.6%42.0%
0%
20%
40%
60%
80%
100%
Fertilizer Pesticides
Average%o
fmaterialscus
toma
pplied Midwest
Other states
2009 Base: Midwest: 140;Other states: 60
Statistically different between regions at p
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The use of GPS guidance systems with manual control/lightbars varied by region (Figure15), with heavier use in the Midwest than in non-Midwestern states. Almost all the respondentsfrom the Midwest used some form of GPS guidance system with manual control (98 percent),compared to 74 percent of the respondents from non-Midwestern states. On average, 66 percentof the materials being custom applied in the Midwest were applied with manual control GPS
guidance systems (down from 69 percent last year), compared to 41 percent of the material innon-Midwestern states (down from 49 percent).
Figure 15. Use of GPS Guidance Systems for Custom Application by Region: Manual Control
2.0%
8.0%
28.0%
21.0%
41.0%
25.7%
17.1%
22.9%
17.1%
17.1%
0% 20% 40% 60% 80% 100%
None
1 to 25%
26 to 50%
51 to 75%
Over 75%
% of respondents
%o
fmaterialscustoma
pplied
Midwest
Other states
2009 Base: Midwest: 100;Other states: 35 Average % of materials custom applied Midwest: 66.1%
Average % of materials custom applied Other states : 41.0%
* Statistically different between regions at p
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Figure 16. Use of GPS Guidance Systems for Custom Application by Region: Auto Control
38.0%
26.0%
20.0%
11.0%
5.0%
60.0%
11.4%
20.0%
2.9%
5.7%
0% 20% 40% 60% 80% 100%
None
1 to 25%
26 to 50%
51 to 75%
Over 75%
% of respondents
%o
fmaterialscustoma
pplied
Midwest
Other states
2009 Base: Midwest: 100;
Other states: 35 Average % of materials custom applied Midwest: 23.9%
Average % of materials custom applied Other states : 26.1%
Not statistically different between regions at p
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Figure 18. Use of GPS Guidance Systems for Custom Application by Organizational Type in theMidwest: Auto Control
36.5%
34.6%
19.2%
7.7%
1.9%
39.3%
17.9%
21.4%
17.9%
3.6%
35.3%
17.6%
23.5%
5.9%
17.6%
0% 20% 40% 60% 80% 100%
None
1 to 25%
26 to 50%
51 to 75%
Over 75%
% of respondents
%o
fmaterialscustom
applied
Cooperative
LocalIndependent
Regional/ National
2009 Base: Cooperatives: 52;Local Independents: 28;Regional/Nationals: 17
Avg % materials applied by cooperatives: 20.2%
Avg % materials applied by local independents : 27.3%Avg % materials applied by regional/nationals: 29.9%
Not statistically different between org. types at p
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Figure 19. Use of Precision Technology
78.6%
65.1%
52.5%
34.5%
30.3%
13.4%
10.9%
3.4%
4.6%
2.5%
0% 20% 40% 60% 80% 100%
GPS guidance w manual control/lightbar
Precision services offered
GPS guidance w auto control/autosteer
Satellite/aerial imagery for internal use
Field mapping (GIS) -- legal/billing/insurance
Soil electrical conductivity mapping
GPS for logistics
Telemetry for field to home office information
Soil sensors mounted on equip.
On-the-go sensors
% of respondents
2009 Base: 238
Over time, some uses of precision technology have grown while others have remainedfairly stable (Figure 20). The biggest growth seen from 2008 to 2009 was in the use of GPSguidance systems with autocontrol/autosteer, growing from 37 percent of the dealerships in 2008to 53 percent in 2009. However, all the other uses of precision technology also increased fromlast year. GPS guidance with manual control, GPS guidance with auto control/auto steer,satellite/aerial imagery, field mapping with GIS for legal/billing/insurance purposes, GPS forlogistics and soil electrical conductivity mapping were all being used at a historically high levels.Only precision service offerings (any precision service) did not reach a historical high.
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Figure 20. Use of Precision Technology over Time
As in other years, precision technologies were being used by significantly moredealerships in the Midwest than in non-Midwestern states (Figure 21). Nine out of 10 of therespondents in the Midwest (91 percent) said their dealership used precision technologies insome way, compared to 7 out of 10 of the respondents from other states (72 percent). Thiscompared to 81 percent of the Midwestern respondents in 2008 and 67 percent of the non-Midwestern respondents. GPS was used as a guidance system with manual control/lightbar by87 percent of the Midwestern dealerships compared to 61 percent of the non-Midwesternrespondents. Over three-quarters (78 percent) of the Midwestern respondents said theirdealership offered precision services compared to only 36 percent of the non-Midwesternrespondents. GPS guidance systems with auto control/autosteer were used by 58 percent of theMidwestern respondents but only 39 percent of the respondents from other states.
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Figure 21. Use of Precision Technology by Region
87.0%
78.0%
58.0%
36.0%
39.0%
12.0%
12.0%
61.0%
36.0%
39.0%
18.0%
24.0%
15.0%
7.0%
0% 20% 40% 60% 80% 100%
GPS guidance w manual control/lightbar *
Precision services offered *
GPS guidance w auto control/autosteer *
Field mapping (GIS) -- legal/billing/insurance *
Satellite/aerial imagery for internal use *
Soil electrical conductivity (Veris) mapping
GPS for logistics
% of respondents
Midwest
Other states
2009 Base: Midwest: 161;
Other states: 74Statistically different between regions at p
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Figure 22. Use of Precision Technology by Organizational Type in the Midwest
90.0%
87.0%
63.0%
42.0%
42.0%
15.0%
83.0%
64.0%
53.0%
36.0%
25.0%
6.0%
100.0%
90.0%
60.0%
35.0%
40.0%
20.0%
0% 20% 40% 60% 80% 100%
GPS guidance w manual control/lightbar
Precision services offered *
GPS guidance w auto control/autosteer
Satellite/aerial imagery for internal use
Field mapping (GIS) -- legal/billing/insurance
Soil electrical conductivity (Veris) mapping
% of respondents
Cooperative
Local Independent
Regional/ National
2009 Base: Cooperatives: 79;Local independents: 53;Regional/nationals: 20
* Statistically different at p
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Figure 23. Precision Ag Services Offered Over Time
33.0%
44.9%
37.8%36.2%
44.2%
51.7%
47.1%45.4% 45.3%
39.7%
53.0%
51.5%
56.1%
29.4%
38.3%37.2%
33.7%
40.9%
49.7%
41.8%
33.0%
39.4%
35.3%
47.1% 44.4%
54.0%
28.9%
23.0%
17.7%
24.2%
29.8%27.9%
28.9%26.8% 25.6%
34.1%
39.3%
43.5%
14.6%
19.6%
14.9%
11.0%
16.1%
22.8%21.7%
23.5% 22.6%18.7%
24.1%
28.9%
35.6%
11.7%12.7%
14.9%
19.1%
15.1%
26.1%
23.0%
32.6%
0%
10%
20%
30%
40%
50%
60%
70%
1997 1999 2001 2003 2005 2007 2009 2011
%o
frespondents
Soilsamplingwith GPS
Fieldmappingwith GIS
Yieldmonitordataanalysis
Yieldmonitorsales/support
Satelliteimagery
2009 Base: 239 Note: 2011 is predicted use
With the exception of satellite/aerial imagery, all of these precision service offeringswere statistically more common in the Midwest than in other states (Figure 24). For example, 62percent of the responding dealerships from the Midwest indicated they would be offering soilsampling with GPS by the fall of 2009. In non-Midwestern states, soil sampling with GPS wasexpected to be offered by only 31 percent of the respondents. Likewise, for field mapping withGIS, over half of the Midwestern respondents (53 percent) expected to be offering the service by
the fall 2009 compared to 17 percent of the non-Midwestern respondents. Similar differenceswere apparent for yield monitor sales/support and data analysis.
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Figure 24. Precision Ag Services Offered by Region
61.5%
53.4%
48.4%
33.5%
25.5%
30.7%
24.0%
18.7%
17.3%
17.3%
0% 20% 40% 60% 80% 100%
Soil sampling with GPS *
Field mapping with GIS *
Yield monitor data analysis *
Yield monitor sales/support *
Satellite imagery
% of respondents
Midwest
Other states
2009 Base: Midwest: 161;
Other states: 75 * Statistically different between regions at p
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As in previous years, precision service offerings were more extensive in national/regionalorganizations and cooperatives in the Midwest compared to local independents (Figure 26). Inthe Midwest, local independents were generally not as likely to offer these services relative toother organizational types. In 2009, only offerings of satellite imagery were not statisticallydifferent across organizational types in the Midwest, with approximately a quarter of the
dealerships from each type of organizational type offering the service.
Figure 26. Precision Ag Services Offered by Organizational Type in the Midwest
72.2%
60.8%
53.2%
36.7%
27.8%
45.3%
37.7%
34.0%
26.4%
22.6%
70.0%
75.0%
70.0%
40.0%
25.0%
0% 20% 40% 60% 80% 100%
Soil sampling withGPS *
Field mapping withGIS *
Yield monitor dataanalysis *
Yield monitorsales/support *
Satellite imagery
% of respondents
Cooperative
Local Independent
Regional/National
2009 Base: Cooperatives: 79Local Independents: 53Regional/Nationals: 20
* Statistically different between org. types at p
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Figure 27. Types of Soil Sampling Offered
76.0%
59.1%
26.1%
34.1%
5.8%
0% 20% 40% 60% 80%
Traditional
By grid
By soil type
By zone
Don't offer soilsampling
% of respondents
2009 Base: 226
Figure 28. Types of Soil Sampling Offered Over Time
Soil sampling is slightly more common in the Midwest than in other states (Figure 29)with 95 percent of the respondents in the Midwest saying their dealership offered some type ofsoil sampling, compared to 93 percent of the respondents from non-Midwestern states. The onlyspecific type of soil sampling that varied statistically by region was grid samplingoffered byalmost three times as many dealerships in the Midwest compared to other states (74 percentcompared to 28 percent).
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Figure 29. Types of Soil Sampling Offered by Region
73.0%
74.0%
24.0%
34.0%
5.0%
84.0%
28.0%
29.0%
35.0%
7.0%
0% 20% 40% 60% 80% 100%
Traditional
Grid *
Soil type
Zone
No soil sampling
% of respondents
Midwest
Other states
2009 Base: Midwest: 153
Other states: 68* Statistically different between regions at p
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The distribution of grid sizes has remained fairly constant over time with the mostcommon grid size continuing to be 2.5 acres, followed by 2.5 to 5.0 acres (Figure 31). Therewas no variation in grid size by region or by organizational type within the Midwest.
Figure 31. Grid Sizes Used in Grid Sampling
2.3%
11.4%
61.4%
24.2%
0.8%
0% 20% 40% 60% 80%
Under 1 acre
1 to 2.5 acre
2.5 acre
2.5 to 5 acre
Other grid size
% of respondents offering grid sampling
2009 Base: 132
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Variable Rate Application
Variable rate custom application of fertilizer, lime and pesticides, as well as variable rateseeding with GPS have typically been provided along with traditional custom applicationservices. Figure 32 shows the trends in variable rate application and seeding services over time.
In general, all areas have continued to show growth each year, with each area showing a surveyhigh this year in terms of the proportion of dealerships offering the services.
Figure 32. Variable Rate Application Offered Over Time
31.7%32.1%
29.0%
49.9%
45.1%
40.6%43.0%
46.8%
42.6%
55.7%56.1% 61.1%
15.0% 13.6%15.8%
19.6%
26.2%
22.6%22.4%24.7%
25.4%
33.0%38.9%
44.8%
3.4% 3.8% 2.7% 2.4%6.1%5.1%
6.4%8.8%
6.4%
15.3% 18.0%
25.5%
0%
10%
20%
30%
40%
50%
60%
70%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
%o
frespond
ents
Controller-driven single-nutrient
Controller-
driven multi-nutrient
Variable rateseeding, GPS
2009 Base: 239 Note: 2011 is predicted use
Figure 33 shows the offerings of specific controller-driven variable rate applicationservices in 2009. Over half of the respondents (58 percent) offered some form of controller-driven application of fertilizer, lime and/or chemicalseither single nutrient or multi-nutrientapplication. This is similar to 2008 levels. Single nutrient controller-driven application offertilizer was the most common controller-driven variable rate application service offered, with52 percent of the respondents expecting to offer the service by the fall of 2009 (the same as in2008). Forty-four percent of the respondents offered single-nutrient controller-driven variablerate application of lime in 2008, and another quarter (23 percent) offered controller-drivenapplication of chemicals.
Multi-nutrient controller-driven application of fertilizer was up this year, with 39 percentof the responding dealerships offering the service in the fall of 2009, compared to 32 percent infall of 2008. Almost a fifth of the responding dealerships (19 percent) offered lime incombination with other materials in multi-nutrient controller-driven application and 11 percentoffered multi-nutrient controller-driven application of pesticides.
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Figure 33. Precision Application Offered for Each Input Type
51.5%
38.5%
44.4%
19.7%
23.0%
10.5%
0% 20% 40% 60% 80%
Controller-driven/GPS
(single)
Controller-driven/GPS
(multi)
% of respondents
Fertilizer
Lime
Chemicals
2009 Base: 239
Figure 34 shows the regional and organizational breakout for variable seeding.Respondents in the Midwest were almost four times as likely to be offering variable seeding withGPS than were respondents from non-Midwestern states (23 percent of Midwestern respondentscompared to 5 percent of the non-Midwestern dealerships).
In the Midwest, a quarter of cooperatives and regional/national dealerships offered
variable seeding rates with GPS while 15 percent of the local independents offer the service.These differences were not statistically different.
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Figure 34. Variable Rate Seeding by Regions and Organizational Types within the Midwest
23.0%
5.3%
27.8%
15.1%
25.0%
0% 20% 40% 60%
Midwest *
Other States
Cooperative
Local Independent
Regional/National
% of respondents
* Statistically different between regions andorganizational types at p
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Figure 35. Precision Application of FertilizerOffered by Region
60.2%
47.8%
33.3%
17.3%
0% 20% 40% 60% 80%
Controller-driven/GPS (single) *
Controller-driven/GPS (multi) *
% of respondents
Midwest
Other states
2009 Base: Midwest: 161;Other states: 75
* Statistically different between regions at p
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Figure 37. Precision Application of ChemicalsOffered by Region
25.5%
11.2%
17.3%
6.7%
0% 20% 40% 60% 80%
Controller-driven/GPS (single)
Controller-driven/GPS (multi)
% of respondents
Midwest
Other states
* Statistically different between regions at p
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Figure 39 to Figure 41 show the precision application offerings by organizational type inthe Midwest. In general, the patterns are similar to those seen for other services, withregional/national outlets and cooperatives being more likely to offer precision application thanlocal independents. For fertilizer, 85 percent of the regional/nationals offered single-nutrientcontroller-driven variable rate application compared to two-thirds of the cooperatives (66
percent) and just over half of the local independents (47 percent). Multi-nutrient controller-driven application of fertilizer was much more common among cooperatives in the Midwest with61 percent of the respondents offering the service, compared to 45 percent of theregional/national respondents and 32 percent of the local independents.
Figure 39. Precision Application of FertilizerOffered by Organizational Type in the Midwest
65.8%
60.8%
47.2%
32.1%
85.0%
45.0%
0% 20% 40% 60% 80% 100%
Controller-driven/GPS(single) *
Controller-driven/GPS(multi) *
% of respondents
Cooperative
Local Independent
Regional/National
* Statistically different between org. types at p
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Figure 40. Precision Application of LimeOffered by Organizational Type in the Midwest
60.8%
34.2%
43.4%
11.3%
75.0%
15.3%
0% 20% 40% 60% 80% 100%
Controller-driven/GPS (single)
Controller-driven/GPS (multi) *
% of respondents
Cooperative
Local Independent
Regional/National
* Statistically different between org. types at p
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Profitability of Precision Service Offerings
Dealerships were asked how profitable they felt their precision offerings were. Overall,results were similar to those of last year.
Each bar in Figure 42 and Figure 43 shows the proportion of respondents who indicatedthat a particular service was: not covering fixed or variable costs; covering variable costs; covering both variable and fixed costs; or generating a profit.
Using soil sampling with GPS in Figure 42 as an example, four out of ten of therespondents said the service generated a profit for their dealership (44.1 percent). Over a quarter(29.6 percent) said that it just covered fixed and variable costs. One in ten respondents (12.5percent) felt that they were covering variable costs but not fixed costs for soil sampling with
GPS and 6.6 percent said they were covering neither variable nor fixed costs. Only 7.2 percentof the respondents did not know how profitable soil sampling with GPS was for their dealership.
In looking at the precision services in both charts, the most profitable precision serviceofferings appeared to be single-nutrient and multi-nutrient controller-driven application, with 50percent of the respondents reporting that each service was generating a profit. Traditional, non-precision custom application was actually the most profitable service this year; with 54 percentof the respondents indicating they were making a profit on custom application. Soil samplingwith GPS generated a profit for 44 percent of the respondents.
Similar to previous years, the least profitable of the precision services were variable
seeding with GPS and yield monitor data analysis, with fewer than one in five respondentsreporting they made a profit on those services. For yield monitor data analysis, only 43 percentof the respondents thought it did more than cover variable costs. Respondents were mostuncertain about the profitability of variable seeding with GPS and satellite/aerial imagery, with25percent indicating they didnt know whether or not they were covering costs on these twoservices.
Overall, respondents were confident about the profitability of their total precision serviceofferings. Four out of ten of the respondents (43 percent) indicated their precision packagegenerated a profit while another 31 percent said they were covering both the fixed and variablecosts of providing the services. Both numbers were almost identical to 2008 results.
There were no significant differences in reported profitability between regions.
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Figure 42. Profitability of Precision Service Offerings
7.2%
25.0%
17.0%
9.8%
6.6%
13.2%
16.0%
5.7%
12.5%
17.1%
23.6%
10.6%
29.6%
22.4%
24.5%
30.9%
44.1%
22.4%
18.9%
43.1%
0% 20% 40% 60% 80% 100%
Soil sampling withGPS
Satellite/aerialimagery
Yield monitor dataanalysis
TOTAL PRECISIONPACKAGE
% of respondents
Don't know
Doesn't covercosts
Covers variablecosts
Covers fixed andvar. costs
Makes a profit
2009 Base: 76 to 152
Figure 43. Profitability of Precision Application Offerings
4.0%
6.9%
10.2%
24.6%
2.0%
6.2%
5.6%
14.0%
11.4%
12.5%
11.1%
22.8%
28.4%
24.3%
22.2%
22.8%
54.2%
50.0%
50.9%
15.8%
0% 20% 40% 60% 80% 100%
Custom application(not prec.)
Single var rate appl.
Multi var rate appl.
Variable seeding wGPS
% of respondents
Don't know
Doesn't covercosts
Covers variablecosts
Covers fixed andvar. costs
Makes a profit
2009 Base: 92 to 225
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Figure 44 shows the profitability of the services across time, indicating the percentage ofrespondents generating a profit on the service. This year showed very few changes inprofitability for any of the precision services over 2008.
Figure 45 shows the same trends broken out just for the respondents from the Midwest.
Like the overall sample, there were very few changes from 2008 to 2009, with the exception ofsatellite imagery which showed a decline in profitability from 28 percent of respondents to 17percent. Profitability of the total precision package was stable from 2008 to 2009, with just over40 percent of Midwestern respondents generating a profit.
Figure 44. Respondents Generating a Profit from Precision Services
33.5%
41.7% 41.6%
39.7%
35.5%
43.7%44.1%
34.5%
33.1%38.5%
42.2%
35.8%
46.9% 50.0%
41.1%
32.7%
42.9% 44.4% 45.1%
48.9% 50.9%
26.3%26.9%
20.3%
30.3%
25.3% 25.0% 22.4%
18.3%22.2%
13.3%
21.4%18.6%
15.0%
18.9%
30.7%
37.2%39.2%
37.5%
43.5%42.5%
43.1%
0%
10%
20%
30%
40%
50%
60%
2003 2004 2005 2006 2007 2008 2009
%o
frespondentsoffering
prec.service
whomakeapro
fit
Soil samplingwith GPS
Single varrate appl.
Multi var rateappl.
Satelliteimagery
Yield monitordata anlaysis
TOTAL PRECPKG
2009 Base 76 to 142
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Figure 45. Respondents Generating a Profit from Precision Services in the Midwest
35.2%
37.0%
42.0%
43.8%42.9%
38.4%
43.9% 47.5%
35.2%35.6%
34.8%
39.1%
44.6%
39.9%
48.3% 51.7%48.8%
45.6%
32.5%
46.5%
44.3%
48.6% 51.3% 53.6%
16.0%
25.6%
20.0%
31.6%
23.1%
28.3%
17.0%
38.8%
32.1%
41.4%
39.7%37.5%
47.2%
42.0%
43.0%
0%
10%
20%
30%
40%
50%
60%
2002 2003 2004 2005 2006 2007 2008 2009
%
ofrespondentsoff
eringprec.
servicewhomake
aprofit
Soil samplingwith GPS
Single varrate appl.
Multi var rateappl.
Satelliteimagery
TOTAL PRECPKG
2009 Base: 53 to 161
Customer Use of Precision Services
To get a better understanding of how quickly growers are adopting precision services,survey participants were asked what percentage of the total acreage in their market area (allgrowers, not just current customers) were currently using various site-specific managementservices; and, in their opinion, what proportion of the local market acres would be using these
services in 3 years. Figure 46 to Figure 49 show the trends over time in the estimated market useof specific precision agriculture management services.
Overall the average market acreage using the specific precision technologies increasedthis year with the largest percentage change being in GPS guidance systems with autocontrol/auto steer (a almost 50 percent increase in average market area from 14.6 percentaverage market area to 21.3 percent as shown in Figure 47). Expectations continue to beoptimistic for growth over the next 3 years.
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Figure 46. Estimated Market Area Using Precision Services
11.9%13.0%
15.2%
18.9%20.5%
16.8%18.4%
21.5%
27.4%30.3%
46.6%
9.9%9.1%
12.1%15.1%
18.1%17.8%18.4%
21.9%
27.3%
30.9%
49.1%
2.0%2.4%3.6% 2.6%2.7%4.4%
5.4%7.0%
20.6%
3.3% 3.9%5.5% 6.1%
7.4%8.9%
9.3%
22.1%
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Average%
ofm
arketarea
Soilsamplingwith GPS
Fieldmappingwith GIS
Variableseedingwith GPS
Satelliteimagery
2009 Base: 158 Note: 2012 is predicted use
Figure 47 shows the use of yield monitors with and without GPS as well as use of thedifferent types of guidance systems in each market area. The use of each precision technologyreached an all-time high for this survey in 2009. On average, 31 percent ofeach respondentsmarket area was using yield monitors without GPS while 26 percent was using yield monitorswith GPS. The use of GPS guidance systems with light bars grew from an average of 35 percentin 2008 to 41 percent of the local market in 2009 while autosteer GPS guidance systems grewfrom an average of 15 percent to 21 percent of the market acres.
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Figure 47. Estimated Market Area Using Yield Monitors and Guidance Systems
23.5%23.7%
29.7%26.0%
31.0%36.7%
14.4%16.2%
20.3%
21.9%
25.8%
42.9%
21.9%25.9%
30.6%
35.1%
40.5%
53.1%
3.7%
5.8%
10.7%
14.6%
21.3%
40.6%
0%
10%
20%
30%
40%
50%
60%
2004 2005 2006 2007 2008 2009 2010 2011 2012
Average%
ofma
rketarea
Yield monitorw/o GPS
Yield monitorsw GPS
GPS guidancesystem manual(light bar)
GPS guidancesystem auto
2009 Base: 251 Note: 2012 is predicted use
The use of variable rate application increased from 2008 to 2009 (Figure 48 and Figure49), with continued growth expected into 2012. By 2012, respondents estimated that, onaverage, almost half of their market acreage would be having lime applied using single-nutrientcontroller-driven application (45 percent of the market acreage), up from 33 percent in 2008.Controller-driven application of fertilizer showed a similar pattern, increasing from 27 percent of
the market area in 2009 to 44 percent in 2012. Expected growth rates in the use of multi-nutrientcontroller-driven application were greater, with multi-nutrient controller-driven application offertilizer expected to double in use in the next 3 years from 17 percent of the market area in 2009to 34 percent in 2012.
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Figure 48. Estimated Market Area Using Single Nutrient Controller-Driven Application
7.8% 6.5%8.7%
11.4%13.3%
15.0%15.0%18.6%
21.7%
27.4%
44.0%
7.8%9.4% 10.9%
14.6%16.4%
18.1%15.6%
22.0%
24.2%
32.5%
45.4%
2.2% 2.8% 3.7%
4.8% 6.4%8.4% 6.7%
9.9%8.6%
9.8%
22.1%
55.2% 54.7%57.9% 57.9% 57.5% 57.7%
64.5%
0%
10%
20%
30%
40%
50%
60%
70%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Average%of
marketarea
Fertilizer
Lime
Pesticides
TRAD'LCUSTOMAPP.
Note: 2012 is predicted use2009 Base: 171
Figure 49. Estimated Market Area Using Multi-Nutrient Controller-Driven Application
4.7%2.8%
6.0%7.1%
8.0%9.6%9.6%
13.4%15.7%
17.1%
34.4%
4.7%2.8%5.2%5.6% 6.4%
7.0% 5.0%
8.5%9.3%
12.3%
19.5%
3.3% 2.1% 2.3%3.7%3.8% 4.8% 6.3%
6.0%
15.4%
55.2%54.7%
57.9% 57.9% 57.5% 57.5%64.6%
0%
10%
20%
30%
40%
50%
60%
70%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Average%
ofmarketarea
Fertilizer
Lime
Pesticides
TRAD'LCUSTOMAPP.
Note: 2012 is predicted use2009 Base: 155
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Figure 50 to Figure 57 break out estimated market usage of precision services by region.Some market use estimates were significantly higher in the Midwest than in other states. Currentusage was significantly higher in the Midwest for soil sampling with GPS, field mapping withGIS, yield monitors with GPS, and controller-driven application of fertilizer (both single andmulti- nutrient). There were no significant differences between regions for manual GPS
guidance systems (lightbars), auto-drive guidance systems, or single and multi-nutrientcontroller-driven application of lime and pesticides.
Figure 50. Estimated Market Area Using Precision Services in the Midwest
13.9%
16.1%19.0%
22.0%23.7%
21.1%22.3%
26.8%33.0%
36.9%
53.4%
11.9%10.8%14.2%
16.2%19.5%
21.1%19.8%
25.3%
30.7%
34.9%
49.2%
3.1%3.6%
5.4% 6.9% 6.3%9.4%
10.0%
23.2%
2.2% 2.6%3.4%2.7% 3.0%4.6% 5.1%
7.4%
21.8%
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Average
%
ofmarketarea
Soil samplingwith GPS *+
Field mapping
with GIS *+
Satelliteimagery
Variableseeding withGPS
2009 Base: Midwest: 112Note: 2012 is predicted use
*/+ Significantly different between regions at p
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Figure 51. Estimated Market Area Using Precision Services in the Other States
6.0%3.9%
6.1%9.6%
12.7% 6.6%9.0% 9.5%
9.7%
13.6%
29.7%
11.9%10.8%
14.2%
11.9%
15.2%
10.6%
14.7% 14.0%
16.3%
22.1%
39.8%
3.7% 4.6% 5.7%4.3% 9.7%
7.3%7.4%
19.3%
1.6% 1.8%4.1% 2.3% 1.7%3.8%
6.9%5.2%
16.8%
0%
10%
20%
30%
40%
50%
60%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Average%
ofm
arketarea
Soil
samplingwith GPS *+
Fieldmappingwith GIS *+
Satelliteimagery
Variableseeding withGPS
2009 Base: Other States: 45
Note: 2012 is predicted use*/+ Significantly different between regions at p
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Figure 53. Estimated Market Area Using Yield Monitors and Guidance Systems in Other States
13.8%
9.4%
21.9%16.4%
24.7%33.4%
9.7% 7.5%
14.1%15.5%
16.9%
33.6%
13.5%
18.9%
25.5%
29.7%
38.0%
52.8%
2.8%
4.8%
11.0%13.7%
18.1%
35.9%
0%
10%
20%
30%
40%
50%
60%
2004 2005 2006 2007 2008 2009 2010 2011 2012
Average%
ofma
rketarea
Yield monitorw/o GPS
Yield monitorsw GPS *+
GPS guidancesystem manual(light bar)
GPS guidancesystem auto
2009 Base: Other states: 43 Note: 2012 is predicted use*/+ Significantly different between regions at p
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Figure 55. Estimated Market Area Using Single Nutrient Controller-Driven Application in OtherStates
54.7%50.3%
54.2%
41.8%51.1%
3.4%2.2%
6.8% 8.8%10.1%
7.0%10.0% 10.5%
17.5% 17.4%
33.2%
3.4% 3.4% 3.2% 7.1%8.7%
7.3% 5.9% 5.1%9.2%
11.6%
21.8%
5.5% 6.8%8.4% 4.2%
6.4% 6.5% 13.7%11.3%
25.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Average%o
fma
rketarea
Customapplication*+
Singlenutrient:Fertilizer *+
Singlenutrient:Lime
Single
nutrient:Pesticides
2009 Base: Other states: 50 Note: 2012 is predicted use*/+ Significantly different between regions at p
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Figure 57. Estimated Market Area Using Multi Nutrient Controller-Driven Application in OtherStates
54.7%50.3%
59.4%
41.8%
51.1%
2.9% 1.9% 2.7% 4.3% 6.1% 3.8% 4.3% 3.5% 12.9% 10.2%24.8%
2.9%2.9% 1.5% 3.5% 2.9% 2.7% 2.0% 1.9% 3.5%9.6% 16.6%
3.8% 2.6% 4.3% 1.7% 3.4% 0.9%10.3%
7.2%
19.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Average%o
fmarketare
a
Customapplication*+
Multi-nutrient:Fertilizer *+
Multi-nutrient:Lime
Multi-nutrient:Pesticide
2009 Base: Other states: 50Note: 2012 is predicted use
*/+ Significantly different between regions at p
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Whats Expected of Precision Technology in the Future?
In 2008, participants were asked what they saw for Precision 2.0. This year, we asked asimilar question to find out how answers would change as a result of the economic downtown inthe general economy. The question asked was:
As you look at the current and future precision situation in your local market,what emerging precision technologies have the potential to impact your business
most substantially?
The responses to the open-ended question are summarized in Figure 58. The mostcommon answer about what emerging technology would have the most impact on dealershipswas more precise application with GPS (56 percent of respondents), followed by more precisemapping technologies (27 percent of respondents). Respondents were also expecting an impactfrom increased autosteer technologies (19 percent) and integrated data analysis (for example,harvest data that would be collected and integrated with application programs) (12 percent).
Figure 58. Emerging Precision Technologies That Will Have an Impact on Business
55.8%
27.1%
18.6%
11.6%
10.1%
11.6%
0% 10% 20% 30% 40% 50% 60%
More precise applicationwith GPS
More precise mapping
Increased autosteertechnologies
Integrated data analysis
Improved soils analysis
Other
% of respondents answering question2009 Base: 129
NOTE: Respondents could have more than one answer.
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Plans for investing in precision technology were greater in 2009 than in 2008. Whenasked how much they expected to invest in precision technology in 2009, 81 percent of theresponding dealerships expected to invest some money in precision technology (Figure 59), upfrom 76 percent in 2008. One in ten responding dealerships expected to invest $100,000 or morein 2009, with another 20 percent expecting to invest $25,000 up to $100,000. Considering this
survey was completed in January 2009 when the general economy was not looking very strong,this suggests that precision technology has become such an integral part of the agriculturaldealers business that investment in this area is a priority, even in highly uncertain economictimes.
Figure 59. Expected Investment in Precision Technology in 2009
24.4%
36.5%
16.6%
9.6%
4.8%8.1%
19.0%
28.9%
20.3%
15.1%
6.5%
10.3%
0%
10%
20%
30%
40%
50%
None $10,000 orless
$10,001 to$24, 999
$25,000 to$49,999
$50,000 to$99,999
$100,000 ormore
%o
fresponde
nts
2008
2009
2009 Base: 232
As might be expected, the investment in precision technology was much different byregion. Though 88 percent of the agricultural dealers in the Midwest expected to invest inprecision technology in 2009, only 67 percent of those in other states expected to invest anythingin precision technology this year (Figure 60).
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Figure 60. Expected Investment in Precision Technology by Region
12.2%
29.5%
24.4%
16.0%
7.1%
10.9%
32.9%
28.8%
12.3% 12.3%
5.5%8.2%
0%
10%
20%
30%
40%
50%
None $10,000 orless
$10,001 to$24, 999
$25,000 to$49,999
$50,000 to$99,999
$100,000 ormore
%o
fresponden
ts
Midwest
Other states
2009 Base: 232 * Statistically different between regions at p
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Compared to farm income and costs vs. benefits, there was less agreement about theother barriers to growth in precision technology adoption. Half of the dealers responding feltthat precision technology was not limited in their area by soil type or topography and 55 percentdisagreed that all their customers who could benefit from precision technology were using it.
Figure 61. Customer Issues that Create a Barrier to Expansion/Growth in Precision Agriculture
-80% -60% -40% -20% 0% 20% 40% 60% 80%% of respondents
Agree orStrongly agree*
30.0%
51.3%
42.2%
19.6%
25.5%
26.8%
26.8%
31.4%
50.4%
55.3%
36.8%
26.0%
48.7%
Cost of precision svces to customersgreater than benefits
Farm income pressure limits use ofprecision services
Interpreting/decisions too time consuming
for my customers
Customers lack confidence in site-specificrecommendations
Soil types in my area limits profitability ofprecision
Topography in my area limits use byfarmers
All customers who could benefit fromprecision are using
Disagree orStrongly disagree*
22.3%
* NOTE: Not represented in this chart were the responden tswho were n eutral (neither agreed nor disagreed).
2009 Base: 220
Figure 62. Percent of Respondents who Agree/Strongly Agree that Customer Issues Create a
Barrier to Expansion/Growth in Precision Agriculture
50.4%
31.4%
26.0%
25.5%
26.8%
26.8%
19.6%
34.0%
33.0%
27.0%
26.0%
22.0%
20.0%
18.0%
72.1%
53.3%
17.1%
24.7%
28.4%
26.2%
0.0% 20.0% 40.0% 60.0% 80.0%% of respondents
2009
20082004
Cost of precision svces to customersgreater than benefits
Farm income pressure limits use ofprecision services
Interpreting/decisions too timeconsuming for my customers
Customers lack confidence in site-specific recommendations
Soil types in my area limits profitabilityof precision
Topography in my area limits use byfarmers
All customers who could benefit fromprecision are using
2009 Base: 224
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Most of the customer issues were rated a greater barrier in non-Midwestern states than inthe Midwest (Figure 63). This reflects the higher use of precision technologies in general in theMidwest. Within the Midwest, there were no significant differences in responses from differentorganizational types.
Figure 63. Customer Issues Creating a Barrier to Growth in Precision Agriculture by Region
3.43
2.80
2.62
2.43
2.33
2.31
2.27
3.81
3.56
3.15
3.20
2.12
3.12
3.03
1 2 3 4 5Average agreement (1=Strongly Disagree; 5=Strongly Agree
Midwest
Other states
2009 Base:Midwest: 151Other states: 70 * Statistically different between regions at p
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Figure 64. Dealer Issues that Create a Barrier to Expansion/Growth in Precision Agriculture
-80% -60% -40% -20% 0% 20% 40% 60% 80%
% of respondents
Disagree orStrongly disagree*
Agree orStrongly agree*
24.3%
24.7%
24.3%
26.9%
28.1%
35.7%
37.2%
45.5%
46.9%
50.5%
30.3%
33.3% 36.5%
28.6%
35.7%
44.7%
48.9%
22.8%
Fees we can charge aren't high enough
Cost of equipment limits our precisionofferings
Can't find employees who can deliver prec
svces
Cost of employees is too high
Competitors price prec. at unprofitable levels
Hard to create signif. better program thantrad'l
Not many growers in my area are interested
Hard to demonstrate value of prec.togrowers
Lack of manufacturer support for prec svces
* NOTE: Not represented in this chart were the respondentswho were neu tral (neither agreed nor disagreed).
2009 Base: 220
Compared to 2008, several of these issues have declined in perceived importance (Figure65). In 2008, 57 percent of the respondents agreed or strongly agreed that the fees they couldcharge for precision services werent high enough to be profitable compared to only 50 percent
of the respondents in 2009. Cost of equipment was thought to be a limitation for 51 percent ofrespondents in 2008 but it dropped to 47 percent of respondents in 2009. Another big drop wasin the opinion that the cost of employees to provide precision services was too high, from 45percent of respondents agreeing that it was a limitation in 2008 to 37 percent in 2009. And,
along similar cost-associated topics, in 2008 over a third of the respondents (37 percent) agreedor strongly agreed that it was difficult to create a program that added significantly more than atraditional program but only 28 percent agreed or strongly agreed with that in 2009. Opinions onmost of the other issues were similar both years as precision technology becomes moreintegrated into the business.
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Figure 65. Percent of Respondents who Agree/Strongly Agree that Dealer Issues Create a Barrierto Expansion/Growth in Precision Agriculture
50.5%
46.9%
45.5%
37.2%
36.5%
35.7%
28.1%
22.8%
57.0%
51.0%
44.0%
45.0%
35.0%
38.0%
37.0%
19.0%
61.30%
71.50%
63.40%
42.60%
65.10%
42.70%
46.30%
21.50%
0.0% 20.0% 40.0% 60.0% 80.0%% of respondents
2009
2008
2004
The fees we can charge for precisionarent high enough
Cost of equipment limits our precisionofferings
Demonstrating value of precision to ourgrowers is a problem
Cost of employees to provide prec.svcesis too high
Number of growers in my area who areinterested is low
Our competitors price precision atunprofitable levels
Difficult to create a program that addssignificantly more than traditional
2009 Base: 224
Lack of manufacturer support for precsvces
Almost all of the dealer issues explored were perceived to be more significant barriers innon-Midwestern states than in Midwestern states (Figure 66). Only competitive pricing was notsignificantly different between the 2 regions. The top 3 barriers for each area, though, were thesame: fees werent high enough, finding employees was a problem, and demonstrating value of
precision services to growers was a problem.
Figure 66. Dealer Issues that Create a Barrier to Expansion/Growth in Precision Agriculture by
Region
3.34
3.26
3.18
3.16
3.09
3.04
2.88
2.56
2.32
3.99
4.00
3.96
3.81
3.15
3.59
3.52
3.45
3.09
1 2 3 4 5Average agreement (1=Strongly Disagree; 5=Strongly Agree
Midwest
Other states
The fees we can charge for precision arent high
enough *
Cost of equipment limits precision offerings *
Demonstrating value of precision to ourgrowers is a problem *
Cost of employees to provide prec. svces is toohigh *
Number of growers in my area who areinterested is low *
Our competitors price precision at unprofitablelevels
Difficult to create a program that adds
significantly more than traditional *
Can't find employees who can deliver prec
svces *
Lack of manufacturer support for prec svces *
2009 Base:Midwest: 151Other states: 70 * Statistically different between regions at p
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Technology Barriers
The biggest technology issue that was perceived to be preventing expansion of precisionagriculture is a common characteristic of technology overall. Over half of the respondents (54percent) agreed that precision equipment changes too quickly and increases the costs of offering
precision services (Figure 67). Almost half of the respondents (49 percent) said thatincompatibility across precision equipment and technology was a problem. Respondents werefairly split about the complexity of the equipment with 37 percent who did not believe thatprecision equipment was too complex for employees, 30 percent believing that it was toocomplex, and the remaining 33 percent were neutral on the issue. Overall, there was not a lot ofagreement that accuracy was a problem (in either the data collection technologies or theprecision application technologies).
Figure 67. Technology Issues that Create a Barrier to Expansion/Growth in Precision Agriculture
-80% -60% -40% -20% 0% 20% 40% 60% 80%% of respondents
Agree or
Strongly agree*
18.6%
36.7%
16.8%
29.9%
49.1%
53.6%
21.2%
Prec. equipment changes too quickly and
increases costs
Incompatibility across prec. equip and
technology is a problem
Prec. equipment is too complex for my
employees
Existing prec. application techs are not accurate
enough
52.0%
53.8%
15.4%Prec. data collection techs not accurate enough
Disagree orStrongly disagree*
* NOTE: Not represented in this chart were the respondentswho were neutral (neither agreed nor disagreed).
2009 Base: 221
In comparing 2008 to 2009, the overall rankings of the technology issues were about thesame (Figure 68), though some of the percentages were different. In both years, the biggesttechnology barrier was thought to be rapid equipment changes which increased cost. However,62 percent of the respondents agreed with this in 2008, compared to only 54 percent in 2009.
Incompatibilities between precision equipment and other technologies increased in importance asa perceived barrier with 45 percent of respondents agreeing or strongly agreeing it was a barrierin 2008 compared to 49 percent in 2009. The other potential barriers were rated approximatelythe same in 2004, 2008, and 2009.
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Figure 68. Percent of Respondents who Agree/Strongly Agree that Technology Issues Create aBarrier to Expansion/Growth in Precision Agriculture
54.0%
49.0%
30.0%
17.0%
15.0%
62.0%
45.0%
33.0%
13.0%
15.0%
64.50%
34.60%
29.40%
14.10%
19.60%
0.0% 20.0% 40.0% 60.0% 80.0%% of respondents agreeing or strongly agreeing
2009
2008
2004
Prec. equipment changes too quicklyand increases costs
Incompatibility across prec. equip andtechnology is a problem
Prec. equipment is too complex for myemployees
Existing prec. application techs are notaccurate enough
Prec. data collection techs not accurateenough
2009 Base: 221
In comparing technology barriers, overall there were fewer differences between theMidwest responses and the non-Midwestern responses than for customer and dealer barriers(Figure 69). Midwestern respondents believed less strongly than non-Midwestern respondentsthat complex precision equipment and the accuracy of data collection and precision applicationtechnologies were barriers to the growth of precision technology in their areas. There were nosignificant differences between organizational types within the Midwest.
Figure 69. Technology Issues that Create a Barrier to Precision Technology by Region
3.65
3.49
2.60
1.99
1.95
3.87
3.72
3.48
2.88
2.97
1 2 3 4 5Average agreement (1=Strongly Disagree; 5=Strongly Agree
Midwest
Other states
Prec. equipment changes too quicklyand increases costs
Incompatibility across prec. equip andtechnology is a problem
Prec. equipment is too complex for myemployees *
Existing prec. application techs are notaccurate enough *
Prec. data collection techs not accurateenough *
2009 Base:Midwest: 151Other states: 70 * Statistically different between regions at p
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Retailer-Manufacturer Roles
One other issue explored again in this years precision survey was the role retailers playin the relationship with manufacturers and producers of fertilizer, crop protection chemicals andseed. Given a list of roles, respondents were asked to rate how important they currently saw thatrole and then indicate whether they thought it would become more or less important in the next 2to 3 years. This is the same list as was provided in the 2008 survey, and there were not a lot ofchanges from 2008 to 2009.
Of the roles reviewed, the one rated highest in importance was to providehandling/storage for the manufacturers in compliance with government regulations (rated anaverage of 4.25 out of 5 where 5 was a very important role and 1 was not important)(Figure70). Introducing new products to the market on behalf of the manufacturer/producer was thesecond highest rated role, followed closely by educating farmers on products and product usage(rated 4.17 and 4.08, respectively).
Respondents saw their role of handling product complaints as being important (4.00 outof 5) as well as holding inventory for the manufacturer/producer (both 3.93 out of 5).
Lower on the list were being a voice of the customer back to the manufacturer, managingcustomer relationships to give the manufacturer broad market access, tracking crop input use forregulatory purposes and providing product sales/inventory data to manufacturers. Lowest on thelist (though still rated 3.62 out of 5) was the importance of the role of the retailer in articulatingthe manufacturers value proposition to farmers.
Figure 70. Importance of Different Aspects of the Retailer-Manufacturer Role
4.25
4.17
4.08
4
3.93
3.87
3.71
3.63
3.63
3.62
4.07
3.97
3.98
3.88
3.88
3.89
3.63
3.6
3.58
3.48
1 2 3 4 5
Provide handling/storage by govt regs
Introduce new products
Educate farmers on product use
Product complaint handling
Hold inventory of crop inputs
Voice of customer to the mfr
Manage cust relationships for mfr's marketaccess
Track crop input use for regs
Provide product sales/inventory data to mfrs
Articulate mfr's value proposition to farmers
2009
2008
2009 Base: 225
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Unlike 2008, the importance of different retailer-manufacturer roles did not vary much byregion in 2009. Providing handling/storage to be compliant with government regulations was theonly role significantly different between the Midwest and other states (Figure 71) whererespondents in the Midwest rated the role significantly more important than did respondents inother states. These ratings did not vary by organizational type within the Midwest.
Figure 71. Importance of Different Aspects of the Retailer-Manufacturer Role by Region
4.32
4.13
4.04
4.01
3.97
3.82
3.74
3.61
3.58
3.57
4.06
4.24
4.13
3.96
3.8
3.94
3.61
3.64
3.7
3.69
1 2 3 4 5
Provide handling/storage by govt regs *
Introduce new products
Educate farmers on product use
Product complaint handling
Hold inventory of crop inputs
Voice of customer to the mfr
Manage cust relationships for mfr's marketaccess
Provide product sales/inventory data to mfrs
Track crop input use for regs
Articulate mfr's value proposition to farmers
Mean Rating (5=very important, 1=not important)2009 Base:Midwest: 151Other states: 70
* Statistically different between regions at p
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Figure 72. Change Expected in the Next 2 to 3 Years with Dealers' Relationship withManufacturers
1.0%
4.3%
3.4%
4.7%
4.8%
5.8%
7.1%
11.5%
9.1%
12.4%
41.3%
43.1%
44.2%
48.3%
54.3%
55.6%
55.7%
51.7%
55.5%
57.4%
57.7%
52.6%
52.4%
46.9%
41.0%
38.6%
37.1%
36.8%
35.4%
30.1%
0% 20% 40% 60% 80% 100%
Provide handling/storage by govt regs
Introduce new products
Track crop input use for regs
Educate farmers on product use
Product complaint handling
Provide product sales/inventory data tomfrs
Voice of customer to the mfr
Hold inventory of crop inputs
Manage cust relationships for mfr's
market access
Articulate mfr's value proposition tofarmers
Less important
Stay the Same
More important
2009 Base: 207
Summary
Though the economic downturn in the general economy has dominated media attentionover the past year, the effects do not seem to be impacting agricultural farm dealerships current
use and future plans for precision technology. Demand for precision services is expected tocontinue to grow slowly, with the most growth continuing to be in the GPS guidance with autocontrol/auto steer. As the technology improves, dealerships appear willing to invest more intotechnologies to improve accuracy and data collection/use in their businesses, and to use thetechnology to enhance the service they provide growers
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APPENDIX I: Questionnaire
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