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Finding The ROI In Your Ag Data

There seems to be little question that there is potential value in the data farmers are collecting on their fields. Yet, investing in an ag data platform has left many farmers scratching their heads. Why? Because most still struggle with what the return on investment is if they invest in an ag data platform.

"Listening to grower panels at precision ag events has convinced me that most farmers still don’t know what the ROI is for most ag data products on the market," says Todd Janzen, Founder and Attorney at Janzen Agricultural Law LLC. "To determine the ROI, first you have to look at the cost. Until now, companies that have stored and analyzed ag data for farmers have used four different pricing models."

1. Entry-level products free, premium products paid. "Many companies offer two levels of ag data storage and analytics, a free basic plan that is designed to showcase some of their offerings and a premium version that has more features. Others accomplish this same freemium/premium model with free trial periods," he says.

2. Dollar per acre. "This is probably the easiest model for a farmer to pencil out to determine ROI," notes Janzen.

3. Annual or monthly fee. "Lawyers in the industry like to call these subscription agreements, but perhaps farmers would rather call these arrangements ag data leases, since you are paying an annual or monthly rental fee to use storage and analytic tools for your data," he explains.

4. Tools part of purchase or lease. "Some companies offer ag data storage and tools as part of a hardware or software purchase.  Others throw in free ag data storage when you use their services or buy their products," Janzen says. "In each instance, the price for ag data storage is built into the program, product or service. Presumably the ROI is built-in as well."

Janzen adds that he doesn't know of any 100% free, Gmail-type models where farmers get free storage and analytics in exchange for using a web portal with targeted advertisements. "I'm sure such model is coming. Its absence on today's market suggests to me that ag tech providers and advertisers still don't know the ROI on ag data any more than farmers do," he says.

If you currently store your data in the cloud, you pay for that service. 

"When will we see this model flip, and ag tech providers start to pay farmers for storage of their data on the condition that such data is shared with the provider? Recently, Farmobile made headlines by announcing it will pay farmers in Minnesota $2 per acre for ag data generated using Farmobile's data collecting PUC. This is the first time that I am aware of that an ag tech provider has promised a specific ROI for using its technology. Is this the start of a trend? Let's hope so."

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