Economist: To be site-specific, ag tools good for three years

Nearly 100 years later, farmers still question technology purchases. But today the equipment is electronic and tied to Global Positioning System (GPS) satellites, said Jess Lowenberg-DeBoer, a Purdue University agricultural economist and director of Purdue's Site-Specific Management Center.

While most farmers recognize the benefits of such GPS-related tools as lightbars, yield monitors and auto guidance, many are hesitant to sink thousands of dollars into the equipment without knowing if they'll recoup their investment, Lowenberg-DeBoer said.

As a general rule, farmers should not expect their site-specific tools to remain viable any longer than their home computers, Lowenberg-DeBoer said.

"For the kinds of electronic technology that we see being used for site-specific management, we usually think of about a three-year lifespan," he said. "This comes from the computer world. A three-year-old computer is almost worthless, so you have to figure out how you can make that computer pay off in those three years. If you can make it pay off in three years then it's probably a good investment. If you use it longer than that or you can sell it for something at the end of that three years, that's a bonus."

Site-specific technology does not come cheap. Lightbars, which help guide equipment in straight rows without skip or overlap, usually run from $2,000 to $4,000. Yield monitor units that track bushels per acre during harvest, range from $6,000 to $10,000. A GPS auto guidance system, a kind of autopilot for tractors, can cost as much as $60,000.

"The faster the payoff, the better off you are purchasing this technology," Lowenberg-DeBoer said. "That is one of the reasons that GPS lightbars sold quite well when they were first introduced. The cost was relatively low and many farmers did a little calculating and decided that they could pay that off in a year.

"In 1999, about 5 percent of agricultural custom operators with ground-based equipment used lightbars. In the Midwest this year, about 75 percent will use them. This is an enormously rapid adoption, and one of the key reasons was the very quick payoff."

Not all site-specific equipment is obsolete in a few years but, like computers, farmers will need to update their older systems, Lowenberg-DeBoer said.

"Sometimes it's possible to take advantage of improvements by software upgrades or by putting in a new chip," he said. "The classic example of this is the yield monitor. Some of the first yield monitors that were introduced in 1992-93 are still being used. The company simply put in the new chip with the new algorithms, and the monitors are essentially as good as the most recent product."

Other issues farmers should keep in mind when considering site-specific purchases include:

• Problems the equipment solves — Auto guidance, for example, is popular with older farmers with physical limitations, Lowenberg-DeBoer said. The technology has allowed producers to extend their farming careers when they might have been forced to retire.

• Compatibility between equipment and farm machinery — "Compatibility is better than it was," he said. "When this equipment first came out on the market, every company wanted to have their proprietary advantage and guard their clients. Many companies have now moved to an open architecture-type arrangement, where it is much easier to share or mix and match equipment and software. But we're not at total compatibility yet. There are some companies that still like to keep their proprietary software and hardware, and they can get away with it, in part, because of brand loyalty."

• Tech support — Original equipment manufacturers are often less qualified or able to provide service on factory-installed site-specific equipment than after-market companies who sell the products. "Farm equipment manufacturers are mainly in the business of selling iron, not electronics, whereas many of the precision agriculture after-market companies are in the business of selling electronics," Lowenberg-DeBoer said.

Farmers also are advised to keep up with the latest changes in site-specific technology through their own research and information obtained from trusted sources.

"What works for your neighbor may not work for you," Lowenberg-DeBoer said. "That means doing your own analysis of what will work on your farm.

"There are a number of sources of information about what will work. Other farmers are always a good source. There are some manufacturers that offer information about what you can do with a particular kind of equipment. There also are universities that have come out with studies looking at what real people do with this equipment when they take it out to the field, how well it works and how likely it is to pay off."

Purdue's Site-Specific Management Center offers additional information on agricultural technology at its Web site.

Writer: Steve Leer, (765) 494-8415, sleer@purdue.edu

Source: Jess Lowenberg-DeBoer, (765) 494-4230, lowenbej@purdue.edu

Ag Communications: (765) 494-2722;
Beth Forbes, forbes@purdue.edu
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