American Ways
11 December 2008 This issue’s USA Report comes at a remarkable time for American agriculture. Thanks to several factors, growers of corn, soybeans, wheat and other crops are in prime position to take advantage of strong prices, and the agricultural community is seizing the opportunity every way that it can. This means one of the biggest topics in the US for the past two years has been improving yield to get as much crop out of the ground as possible.
That isn’t always the case. Of course, growers always want a bumper crop. But in times of low prices, many US farmers face an economic balancing act. Since certain costs in the US — most notably, labor — are higher than the country’s competitors, US growers work closely with crop input retailers and consultants to formulate plans for their crops that provide optimal returns. When prices are down, that can mean cutting their spending on inputs that the growers feel are not vital — in other words, if the expense for certain fertility treatments, agrochemicals, or machinery upgrades are likely to be higher than the return in terms of added yield, growers will eliminate those expenses for that season.
In this sense, US growers have a certain business-mindedness that is not present everywhere in the world. It should be noted that not all world markets have the advantages that US growers do in terms of the options available to them, such as availability of inputs and financing. But the fact is that US farming has developed into a knowledge-based enterprise, with techniques worth studying elsewhere in the world.
Even now, as prices are high for crops, American agriculture is using these lessons to achieve the maximum yield potential of their crops while preventing their costs from becoming excessive. Even with the improvements in crop prices helping to raise growers’ confidence that their investments in their fields will pay off, fertilizer, seed and agrochemical prices have risen in the US just as they have in other world markets.
However, over the past several years, US agriculture has literally been revolutionized by a number of high-tech practices known collectively as Precision Ag.
For those unfamiliar with the term, it encompasses a number of different farming methodologies often enabled by technological advances that allow growers to collect and analyze data and farm their fields in the most efficient ways possible. It is not unique to the US — Australia, the EU, and to a lesser degree, South America — have all adopted various levels of precision ag.
The tools used come in many forms: there are prescription maps of fields generated by soil testing that help growers decide exactly where to apply nutrients; there are software programs that tie field scouts into field histories and help to develop product application plans; there are automated steering systems that actually control the paths of sprayers in the fields to deliver agrochemicals with amazing precision, which means less wasted product, and very little, if any, overlap in chemical applications.
The US crop input retailer is positioned right in the thick of this large and growing technology. As the advisors to growers, retailers — who sometimes also apply product for the farmer — have become experts in these technologies, whether they wanted to or not. In doing so, the retailers have also cemented their roles as more than a seller of products. They are providers of service and knowledge centers, and while it will take some time, this model is poised to expand to other world markets.
Knowledge is power. If discovering more about precision ag can improve the value you provide to customers, it will ensure that your relationship will remain strong and serve you for years to come.
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