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Technology in the Ag world

Your Farm Business

December 10, 2010
From Wayne Schoper and Rich Baumann, South Central College

Technology has been on a steep upwards trajectory in agriculture for many years. Take a look at where machinery has gone in the last 50 years or so. Tractors in 1960 were very functional and many are still in use today. However, they did not have any of the technology available today. You can get tractors with automatic steering, GPS capability and the list goes on. To be sure, there is a very high price tag for this technology, but some investment is needed to keep up with modern farm production. The tractors of 1960 served their purpose to be a portable power unit. High tech at that time might involve a radio or some sort of sun shade. But they were definitely a step up from previous years as many of them had new technology such as live power takeoff and live hydraulics. I remember when power steering came onto the market. I learned how to cultivate with a front-mounted cultivator on a John Deere Model A with no power steering. It was a muscle building exercise just to turn the machine around at the end of the row.

Dr. David Kohl is a professor emeritus at Virginia Tech. He recently put together some observations about farmers and technology adoption that I found rather interesting. When we look at adoption of technology by farmers we can divide them into five categories. First are the innovators. This group is comprised of less than five percent of producers. They are often the first in the neighborhood to attempt a practice or idea. The risk here is that they can be so far ahead of the curve that they are on the leading or bleeding edge, which can be risky.

Following this group are the early adopters which represents 20 to 30 percent of the marketplace. They watch the innovators and will move forward with new technology only when proven. This is not the biggest segment, but they are adept at being profitable and are generally ahead of the curve.

Next, we see the majority group, which includes 60 to 70 percent of producers. The majority follows the leaders and is slow to adapt to change. Finally, the laggards, which are less than five percent of producers, are frequently so far behind the curve that they are out in front of ideas and practices that are recycled through the technology train.

So, does technology pay? This seems like an obvious question. But to get to the real answer, we need to do a little research. This research was conducted on farmers and ranchers in Minnesota and the four northwestern states. According to the findings, the early adaptors scored the best results with an average return on assets of just over 8 percent. Contrast this to the group that perceived themselves to be the majority, laggards and innovators and the return on assets was 6.5 percent. An interesting side note the innovators had the lowest return at 4.9 percent. Some of those new ideas were expensive and just did not work out.

Whether it is robotic milking machines or GMO crops how does one evaluate if they have the right stuff to adopt technology and turn a profit?

First of all, you must have the resources necessary including labor, land and capital to make it succeed. Also, does the technology align with your management strengths and weaknesses? Does it fit with the vision, mission and overall passion that drive your farm business? Do you have a system established to implement and evaluate the success of the change and are you willing and able to endure an adoption curve? If the answer to all of these questions is yes, then you can proceed to consider the multitude of technological advances that are available to your farming operation.

 
 

 

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