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How much will that new farm technology really pay?

New tech can work wonders, but is your economic analysis a bankable guide to how it will perform on your farm?

Like everything else in farming, it’s getting more complicated to decide which technologies to invest in for the farm. Actually, make that “much more complicated.”

An effective technology strategy is a key success factor, says Purdue University professor Michael Langemeier, “Early adopters of technology often reap above-average profits.”

Plus, says Langemeier, it can keep them from going backwards, which is what happens to farms that don’t invest in appropriate technologies and face a growing efficiency gap compared to the rest of the industry.

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And both of those — the good and bad — are likely to get swell as we head into the 2020s and start to see more advanced tech, including robots and artificial intelligence systems.

Langemeier, associate director of Purdue’s Center for Commercial Agriculture, says it all means that today is the right time to ask whether your technology strategy is based on forecasts you can trust.

But first, let’s get an important question out of the way. How realistic is it to assess the savings for every new tool or practice on the farm?

Every little detail

To Steph Kowalski, agronomy lead at the Agromart Group in Thorndale, Ont., it’s not just realistic, but absolutely worth the effort. “Farms are getting bigger, and every little detail must be measured,” Kowalski says. “Everything on the farm needs to have a dollar value to it, especially technology.”

That dollar value must also include your time, Kowalski says. She points to an example of a precision ag system that, while it costs farmers nothing this year, has required several farmers she knows to recently spend a whole week entering field boundaries and so on to get the system up and running for themselves. (Some farmers may also have had to purchase tablets as well.)

“Don’t forget to figure in your time in evaluating the worth of technology,” she says. “It has a cost.”

Another important question in how farmers go about evaluating new tech is whether equipment/tech companies should be doing more to quantify savings for farmers before farmers decide whether to purchase. In Kowalski’s view, that’s not always easy. “These firms can’t go claiming ‘this will save you $10 an acre’ because farmers will question it and say, ‘you can’t know that because you don’t know what my production costs are,’” she explains.

Insist on cost-benefit analyses from relevant farms, she recommends. “I guess all these firms can do is launch the product with as much information as they can… Case studies are helpful to farmers, even if the case study isn’t exactly like their farms.”

Farmers must also recognize that besides cost of production, the financial benefits — or lack thereof — of a particular piece of technology depend on the upfront costs, operational costs, how often it’s used, and how much of an initial difference it might make versus how much it might contribute on an ongoing basis.

In addition, farmers should keep in mind that in order to get an accurate idea of savings and benefits, the technology must be working properly and be properly calibrated. “You must validate the benefits, and make sure what you are being ‘told’ by the precision ag system, for example, is true,” says Kowalski. “Precision planting can now provide you with instant feedback about performance of the planter, so you can go look at it right away to check for a blocked tube or what-have-you, but for many things, there is no instant feedback. You have to go get the information and do validation on your own.”

Trust the numbers?

One piece of tech that might not provide accurate readings is a combine yield monitor, says J.D. McFarlane, Eastern Canada district leader at Corteva Agriscience, which owns the Pioneer brand. These monitors are supposed to be accurate no matter the conditions, he says, but they can be affected by humidity, hybrid, speed and other factors.

Yet another hurdle in assessing the economics is a lack of baseline data. “How can they do this when they don’t have a solid knowledge of what the costs of their current technology are?” asks Ian McDonald, crop innovations specialist at the Ontario Ministry of Agriculture, Food and Rural Affairs. “As an example, with all the work we are doing on reducing soil compaction, farmers say that the cost of an automated tire inflation/deflation system is too steep, but they don’t have a clue what the current impact of their high pressure tires is, so how do they know whether the new technology is too expensive?”

Yes, farmers could do a test strip to get a baseline against which to measure the difference, but that plan comes with two problems. First, they’d have to take the plunge and buy the technology without knowing how long the payback will take, or whether it will ever be achieved. The other problem, notes McDonald, is that analyzing the difference this technology makes in the field is not as easy at it appears at first glance. That is, a test strip very well may not do the trick.

“On a whole-field or whole-farm level, there’s equipment like a forage harvester and baler that have basically a steady weight continuously across the field,” he explains. “With things like seeding and manure spreading, combines and grain buggies, however, the weight of the equipment changes and as you are moving it around the field, it might be lighter and therefore result in less compaction, but that might be at a place in the field that’s more sensitive to compaction, maybe with a different soil type or difference in moisture level. We don’t have the systems yet to figure that out. They are working at it at places like Niagara College or Conestoga College and University of Guelph and in industry, but we are not there yet.”

McDonald also believes that changing the way research on the economic benefits of ag tech or practices is presented would be very helpful for farmers. “Comparisons that show no difference between the present technology and a new version are sometimes not published, but knowing that there is no difference is valuable knowledge that farmers need,” he says. “In addition, since other scientists have no way of knowing about these results, they will test the same idea, with the same result, and again, don’t publish, so we have collectively invested in the same research more than once but the end user still doesn’t have access to the data to use in decision-making.”

At the same time, though, McDonald notes that the amount of information thrown at farmers is staggering.

“The science and art of producing something in an ever-changing environment is not easy, and the old information and the new information have to be integrated properly,” he observes. “Farmers can’t count on a particular study on something like whether changing seed on various parts of the land is worthwhile. There are those who swear by it and others who think it’s pointless.”

McDonald adds that it’s hard for people in positions like his to take a piece of research and make a recommendation to farmers across a region about it. “But I think the future is very bright in that the technology being built into equipment today like tractors, sprayers, planters, combines will enable every farmer and field to be a mini-research site,” he says. “This equipment will gather in-field real data at such high volumes compared to what has been previously possible. With so much data across various treatments that you design and have the equipment deliver, the possibilities for knowledge are tremendous. The other benefit is that the data is coming from within the entire system, not from small plots where lots of variables are isolated from each other. Especially if we can get buy-in from producers to aggregate data across farms, with good meta-data like soil type, topography, field history, etc., the opportunity to enhance our knowledge collectively is tremendous.

“It’s extremely exciting. But farmers can’t do it alone… You have to surround yourself with employees, suppliers and consultants who can help meet your needs.”

Finding expert help

With precision ag, McFarlane notes that “finding the time to do the analysis is the limiting factor in seeing full benefits. We know that growers need support with this, and we provide help. And I think the fact that farmers don’t have a great deal of time is why precision ag is being sold as a service, not just a product. It’s a package deal.”

Attaining full benefits is an important point. You can’t evaluate the worth of a technology or practice if it isn’t providing the results it can and should provide.

Aaron Breimer, general manager at Veritas Farm Management in Chatham, Ont., agrees with McDonald and McFarlane that farmers can’t usually get the most out of their precision ag systems on their own. Veritas provides data analysis for private companies (e.g. seed) and for farmers.

Breimer notes that while some farmers are naturally inclined towards analysis (and even like it), and others are not, managing complex analysis with several variables is beyond the scope of most farmers. In addition, he thinks the training to become proficient would involve at least 40 hours and he’s not sure where this sort of training would be available.

“A comparison of one variable is a fairly easy thing for anyone to do,” Breimer says. “You can plant two hybrids in a field and compare their performance. However, if the conditions aren’t similar for both hybrids in every way (planting date, fertility level, soil type, field history and so on), then these variables must be factored in, correctly. This is known as multi-variable analysis. Can some farmers do this, can they make sure they have configured these variables correctly in the system so that the analysis will be correct and complete? Yes, but I’d say that’s about five per cent of farmers. And again, they would need training.”

Another difficulty for even capable farmers, says Breimer, is that while the software that comes with today’s precision ag systems provides some analysis, it doesn’t always have the capabilities to provide the analysis that’s actually needed. “Beyond the basics, these systems can’t give you the information that’s needed to save you money or make you more money,” he says. “You often have to go a step beyond in many scenarios.”

In addition, having worked with lots of farmers, Breimer has also observed a fairly strong “confirmation bias.” This means farmers will look at the results of data analysis and if it’s what they expected, they will say “those results make sense” and move on. And if it’s not what they expect, they will assume there is something defective about the analysis and are unlikely to pursue it further. “What scientists do is try to disprove their ideas, and farmers don’t tend to want to do that,” Breimer notes. “But an open mind and a determination to get to the truth, whatever it is, is what’s needed.”

In Saskatchewan and Alberta

Three programs to help evaluate new practices and technologies for farmers are operated by the Saskatchewan Agriculture Research Branch (ARB). These include ADOPT (Agriculture Demonstration of Practices and Technologies), Agri-ARM (Agriculture-Applied Research Management), and the Strategic Field Program.

One project being funded by ADOPT is underway at the Prairie Swine Centre in Saskatoon this year. Staff are studying how infrared technology can be used to identify compromised pigs and potentially reduce antibiotic use and mortality. Bernardo Predicala, research scientist at the centre says if the technology proves effective in this trial, a future study may focus on its cost-effectiveness.

Perhaps the hottest spot in Canada, however, for ag tech evaluation is the Olds College Smart Farm in Olds, Alta., launched in 2018.

Expect to hear more from this exciting research centre in future, which includes “a living lab” for “innovation, validation, demonstration and scaling of ‘smart’ connected agriculture technology through industry partnerships.” Examples of this technology includes software platforms, soil monitors, digital weather stations, wireless grain bin sensors and much more.

An open mind

How do you know if downforce pays?

Aaron Breimer at Veritas Farm Management has an example of where an open mind was important in doing an economic analysis of technology, in this case a planter with hydraulic downforce (HD). This client (with a large farm and the resources to do a detailed tech benefit comparison) has two planters, one with HD and one with a traditional spring mechanism. He told Breimer how it made sense in his view to use the HD planter on the farm’s sandy and variable soil-type fields, and asked Breimer to help him quantify the benefits.

Two years ago, they chose a field with a lot of soil variability and used both planters in a side-by-side pattern throughout the field and compared yields (corn). Unexpectedly, planter type produced no yield difference in sandy parts of the field — but in areas with clay soil, the HD planter provided an eight-bushel increase over the other planter.

In the second year (2018), Breimer and the farmer got more detailed. Breimer came up with an analysis that would match degree of sandy soil with yield. “That clearly showed a large yield loss of up to 10 bushels in some areas of sandy soil where the HD planter was used,” he says. “This was not expected. Our theory is that in sandy soil, the HD planter, which applies downforce depending on how much resistance it senses, didn’t plant the corn seed deep enough and so the seeds dried out too much and the germination and early growth was therefore poor. We had to dig up a lot of corn plants to determine that and it took a lot of time.”

Based on this, this farmer will use his traditional planter on the sandy areas of the farm this year and his HD planter on areas with clay and in variable fields, and Breimer adds that he’s tried to calibrate the HD planter so that it plants more deeply in sandy soil. “I’ve spoken about this at various meetings and had about 40 farmers ask about it,” he says. “I’ve been able to say ‘I wouldn’t recommend you buy an HD planter if you have mostly sandy soils.’”

Breimer provides another example of economic analysis of technology (variable rate N application) where again, an open mind was critical in getting the test results straight. “Initially, I thought that we’d need to apply more N to the lower-lying areas of the field because plant performance is higher there and N was probably being stripped from those areas,” he says. “But with analyzing the soil test and yield results, we saw that with the higher level of organic matter in these low areas (due to water and top soil migrating there), a lot of N is released when the organic matter decomposes. So, not as much N needed to be applied as we had thought.”

Depending on the level of analysis, Veritas currently charges $1 to $5/ac. Breimer says the typical farmer would find that that analysis of soil test results would cost about $2/ac. (the grid sampling and soil tests are done by another firm) is most worthwhile. “For that, the software we’ve created will overlay the soil test data with yield results and we will identify yield-limiting factors,” he says. “Next to that, there’s often the most value in having us do validation for variable rate prescriptions for fertilizing, planting or something else, to find out if they’re accurate/profitable.”

McDonald notes that validation is a critical step that many farmers are currently avoiding. Validation means that in each zone with a prescription, there are strips or blocks of multiple rates of the input so the optimal rate can be determined and examined against the prescription. Only with that, he says, can you determine if you benefited from the implementation of the technology.

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