If you’re following along in the series about consolidation in the row crop industry, last week we posted about farmer age as the first factor contributing to consolidation. Moving on to the second factor, I believe consolidation taking place in the row crop industry today is being fueled, at least partially, by resistance to adopting technology. Missing out on efficiencies, knowledge and strategic decisions made possible through effective use of technology results in many producers falling farther and farther behind.
I see several factors that contribute to the ineffective use of technology among some farmers:
- Farmer age
- Uneven rate of adoption
- Lack of standards
- Failure to make good use of data collected
1. Farmer Age
First, let’s look at farmer age. The last blog in this series reviewed the inevitability of time - all people age. Most older folks are neither effective nor enthusiastic users of technology. Technology adoption seems easy for younger people who have grown up with it as a normal part of their daily lives; we older people tend to have to make a concerted effort. Keeping up with the latest innovations, choosing what fits our needs and learning to use those tools and programs are harder for the older generation.
The next barrier to technology adoption among farmers is cost. The expense involved in choosing, purchasing, implementing, on-going maintenance and updating technology is significant. For smaller operations, cost can be a barrier to adoption and, because it tends to change so quickly, to the necessary updating of tools and programs as technology improves. A future article in this series will deal with capital access.
3. Uneven Rate of Adoption
The third barrier to the use of technology in crop ag has to do with the uneven rate of adoption. Because of farmer age and high cost of tools and programs, and also the lack of benefits farmers experience when simply collecting data (and failing to analyze and use it), the rate of adoption of new technology across crop farming varies greatly.
4. Lack of Uniformity and Standardization of the Data
The fourth barrier is a lack of uniformity and standardization of the data. This makes it much more difficult, when farmers collect data, to analyze it in a way that provides the most useful data in its most useful form. Without uniformity or standardization, most farmers have not discovered a profitable way to use big data, and most do not have the people in place nor the time dedicated to utilization of the data. We gather it, most of the time not bothering to clean it up… so we end up with lots of raw data that cannot be analyzed unless it’s cleaned up - and therefore it does not provide much value.
5. Analysis and Profitable Use of Data in Strategic Managerial Decision-Making
For many farm owners, “using technology” stops with collection of data via VRT on planters and sprayers, auto-steer, yield monitors, GIS data-gathering systems (field mapping and as-applied data), etc. However, data collection is not the ultimate objective. Analysis and profitable use of that data in strategic managerial decision-making by farm owners is the critical success component. Few farm owners go beyond collection to analysis, strategic decision-making and implementation.
An obvious reason farm owners fail to effectively use data is lack of a dedicated person to oversee data collection, analysis and use. To achieve maximum value from data, collection and analysis must be standardized, year over year. Then, you need a group of other similarly focused producers with whom to aggregate the data for benchmarking. This works best if each farm business has an individual assigned to data analytics. In the business world, where they have learned the value of not just gathering data but using it, a new position has been created called CTO or CIO (Chief Technology Officer or Chief Information Officer).
Using technology helps producers compete more successfully by farming more acres with less cost, better results, and therefore more profit. Whatever their reason(s), producers who do not adopt and use technology miss out on benefits that could help them manage their farming operation more efficiently and effectively. Those are the producers who soon will fall victim to consolidation sweeping across row crop agriculture.
The next article in this series will deal with a specific technology factor in consolidation – autonomous equipment, which will change crop agriculture forever. FamilyFarms Group has been investigating autonomous equipment since 2009 and has watched this phenomenon develop. If you would like to know more about FamilyFarms Group and how our system can help you and your operation deal with consolidation, please give us a call at 618-372-7400.