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Precision Ag Practices Boost Operating Profits, USDA Says

If you’re running a large corn or soybean operation, you’re a lot more likely to be using precision agriculture practices and seeing results like increased operating profits — at least that’s what research by the USDA says. The study, Farm Profits and Adoption of  Precision Agriculture, focused on three precision agriculture practices: guidance or auto-steer systems, variable-rate technology (VRT), and GPS-based mapping systems.

How Popular Is Precision Ag?

In the past 10 years, tractor guidance systems have gotten popular more quickly than variable-rate input application. Guidance is utilized on a whole 50% of U.S. corn and soybean acres, while only 28% to 34% of those acres take advantage of VRT. Yield mapping is used on 40% of U.S. corn and soybean acres, while GPS soil maps are utilized on 30% of U.S. corn and bean farmland. 

Corn farms over 2,900 acres are twice as likely to adopt precision agriculture than smaller farms. A whole 80% use guidance systems, 70% to 80% are using mapping, and 30% to 40% use VRT.

Let’s Talk Money

GPS mapping is most effective at helping growers make more money — using it increases operating profit by nearly 3% on corn farms. As for net returns, GPS mapping increases those by almost 2%. 

If using a guidance system, corn farmers see an estimated 2.5% higher operating profit, while net returns are 1.5% higher. VRT can bump up operating profit and net returns on corn farms by 1.1%, the USDA report said.

Smaller corn operations – just 140 to 400 acres in size – have 60% to 70% lower hired labor costs if precision agriculture technology is being used. 

Interestingly enough, hired labor costs on corn farms larger than 400 acres that are using precision mapping and guidance are higher. While it’s not confirmed, higher costs are likely due to the use of information management and field operation specialists. Big farms have big input costs to pay, but precision agriculture technology can help specialists control those input costs.

Operations with higher levels of unpaid labor are less likely to adopt precision agriculture technologies. Researchers think this could be due to the overhead expense of unpaid labor that reduces spending flexibility.

Interesting Factors That Affect Precision Ag Use

If a farm operation growing corn has a larger stock of machinery on hand, it’s less likely that the farmer will adopt VRT. The study believes this could be because the operators have less flexibility when it comes to taking on new capital outlay and also due to higher overhead costs.

Non-GPS-based soil testing increases the likelihood that an operation will adopt auto-steer systems, VRT, and GPS-based mapping systems. 

Farmers with higher yield goals are less likely to adopt precision ag practices as they’re likely nearing the production potential for their soils without implementing other technology. 

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