The ag retail industry is in a state of transition as farm operations continue to consolidate. Ron Farrell, a consultant with nearly 50 years of experience working with leading agricultural companies, says that as consolidation continues, it is likely that about 20 percent of U.S. crop acres will be farmed by growers who will prefer to buy direct and apply their own fertilizer and crop protection products; another 20 percent of the acres will be smaller farms where the operator is also employed off-farm and will require additional support services from their farm supplier; and the remaining 60 percent will be farmed by growers looking for more sophisticated risk management and precision agriculture services from their ag retailers.
Recent surveys have found that more than 80 percent of ag retailers see their farm customers doing more precision agriculture in the next five years. “As commodity prices drop to more sustainable levels, growers will focus on maximizing their return per dollar invested. Precision ag provides the best opportunity to do that,” says Farrell, whose company, Farrell Growth Group, LLC, provides consulting to ag companies and facilitates peer groups of top-level ag retailers.
Retailers who help growers determine the most viable practices through precision ag data analysis, on-farm research and custom precision services will gain business, according to Farrell. “The ag retail industry is segmenting as quickly as farmers are consolidating. Those retailers that build up their team to be knowledgeable on all components of precision ag and on maximizing return on investment will thrive. Those that don’t will struggle to maintain business in this sector,” he says.
Evaluating Agronomic Practices
Besides investing in data analysis, retailers are helping growers evaluate new agronomic practices that build on precision capabilities. Custom strip tillage and fertilizer placement is a new precision offering by some ag retailers. These retailers have invested in strip tillage equipment because it fits well with their variable rate fertilizer programs, it provides agronomic advantages and it shows their leadership in helping growers experience and evaluate new technologies.
For example, two years ago United Farmers Cooperative (UFC) in York, Neb., leased a SoilWarrior strip tillage machine with a real time kinematic (RTK) steerable fertilizer cart for research and custom application purposes. The yield advantage for strip tillage compared to no-till and conventional tillage ranged from 10 to 15 bu./A in the on-farm trials it conducted for customers in 2012.
Strip Tillage Builds on Precision Capabilities
“As we help our growers increase yields, we are focused on getting nutrients placed in the right location. We aren’t just applying nutrients, but placing them where they will have the greatest impact to yield and greatest economic benefit,” says Mike Zwingman, lead analyst of agronomy research for UFC’s 32 locations in southeastern Nebraska and north central Kansas. “The advancements that the SoilWarrior brings in nutrient placement can help growers advance their yields, lower their nutrient use and manage their environment better than ever before.”
This doesn’t surprise Farrell, who believes custom strip tillage is a real opportunity for retailers to provide unique leadership. “We are marching into more controlled environment farming where crop systems are managed by the inch. In my estimation, strip tillage will be a major component of precision agriculture,” he says. “Prescription and precision placement of nutrients and other inputs will be critically important for improved profitability and conservation of resources. Strip tillage, where you plant the exact same area, year after year, allows you to place nutrients right where the plants need them and keep high levels of crop residue between the strips for soil and moisture conservation.”
Timeliness is another reason to offer custom strip tillage fertilizer application, according to Matt Richmond, Midwest regional field technology specialist with Wilbur-Ellis, Onida, S.D. “Farmers are covering more acres and with the planting window so short, they don’t want to be slowed down by applying fertilizer with the planter,” he says. “It also allows us to hit higher rates of fertilizer for increased corn yield goals.”
Kevin Born, CEO of Environmental Tillage Systems (ETS) says, “We are seeing more interest by ag retailers to add strip tillage with precision fertilizer application to their custom services. It dovetails with retailers’ precision ag services and it provides another revenue source. Most importantly, they are introducing growers to an innovative technology that improves yields and nutrient efficiency.”
Interest by ag retailers and large growers alike has caused ETS to build its largest SoilWarrior machine yet. The new 60-foot, 24-row SoilWarrior N simultaneously delivers anhydrous and liquid or dry fertilizer at a speed of up to eight miles per hour. Equipped with three variable rate dry fertilizer tanks, the SoilWarrior N easily adapts to fertilizer formulation changes based on soil conditions, the calendar and comparative prices of various nutrients.