Make every dollar count with precision sales

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As I’ve noted in recent months, some dealers and manufacturers are predicting flat to slightly lower sales of precision farming products in 2014, due in part to the drop in corn prices along with the fact that more equipment is coming factory-equipped with technology.

As one representative from a precision manufacturer says, dealers will be challenged to replicate the success they’ve had in recent years, and will have to be better salespeople to convert those sales that may have come easier in the past.

Results from the 6th Annual No-Till Farmer No-Till Practices Survey seem to support this line of thinking, as respondents indicated a significant drop in the amount of money they plan to spend on precision technology this year.

According to the results — featured in the May 2014 issue of Conservation Tillage Guide, a sister publication of Precision Farming Dealer — respondents plan to spend an average of $3,140 on precision technology per farming operation, less than half the amount they expected to spend in 2013.

In reality, respondents didn’t even come close to the projected $6,974 per farm expenditure last year, instead spending only an average of $4,180 on precision technology in 2013. Survey results show that spending on precision products has declined since 2011, when respondents estimated spending an average of $8,864, followed by $6,839 in 2012.

But the 2013 spending drop and 2014 projection are perhaps more alarming as the precision hardware market becomes increasingly saturated. Dealers are not only competing for less disposable income from farmers, but also have to convince customers that the brand they sell is better than the competitor’s.

No easy task, which is why some are shifting focus from hardware sales toward precision service as a perpetual revenue source.

Still, there is increasing adoption of precision technology, even if farmers are spending less on it. According to the survey, the percentage of respondents using GPS tractor auto-steer, variable-rate fertilizing, variable-rate seeding and implement guidance are on the rise in the last year.

Although many view auto-steer as a standard precision tool, the technology saw the biggest jump, with 41.5% of respondents using it in 2013 and 49.3% planning to use it in 2014. The last 3 years of survey results reveal an overall 12% increase in auto-steer usage.

Several dealers I’ve chatted with in recent months note untapped opportunities to sell auto-steer systems, especially to smaller farms with older operators.

That said, it will be interesting to see what the next year holds in terms of precision sales. Has use of GPS lightbars and remote sensing plateaued? What about adoption of ag drones? (which were not yet included in this year’s No-Till Practices Survey).

One precision specialist told me that he tries to project sales two years out, because that’s typically when lower farm incomes tend to start impacting his customer’s spending habits.

“There’s always that lag time,” he says. “But I also can’t wait until it’s too late or my business is going to suffer.”

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