An informal review of over 150 Agri-Trend’s farm clients covering 500,000 acres of VR over the past 7 years revealed an average net return of $35 per acre. Of that $35 – $7 were savings from reduced or eliminated inputs to low producing areas and $28 were earnings from improved yields in higher producing areas in the field.
It’s the combination of these two streams — the savings and the earnings — that make VR truly pay off. If you decide to adopt a precision management strategy, proper execution is key. Each step in the process brings you closer to maximum results and solid return on investment (ROI).
So you think you might want to get started?
First, keep in mind…Variable Rate is NOT Precision Ag… This subtle distinction requires that I define Precision Ag. I have two definitions; my most simple is the right management in the right place, and my most complex…Precision Ag is the management of variable yield potential. The management can be very coarse, eg. changing your cropping intentions and planting a salt tolerant grass in a saline area or grassing over a waterway rather than trying to seed through or around it, or it could be spreading of lime or sulfur using a spinner spreader across the area in need. Or the management can be fine eg. using variable rating seed and/or fertilizer rates by management zone.
Secondly, I cringe every time I hear VRT will save you money…it may…but using that as a hook is misguided. I’m actually asking my grower to spend more money…no, scratch that…I’m asking him to make a strategic investment. Zone creation, ground truthing, intensified sampling, additional services, VRT application, etc all require an investment beyond what my grower is currently doing. Properly deployed Precision Ag (note I used Precision Ag and not VRT) should increase a farmer’s profitability; it doesn’t, we should be fired.
In my opinion, Precision Ag should be positioned as a strategic investment that allows strategic resource reallocation to drive additional revenue to the bottom line by reducing average cost per unit of production. This requires we know and understand our yield potential; even if it’s just relative, FIRST. And then we implement the appropriate management strategy, which might be VRT fertility or seed.
In an effort to ease growers into the Precision Ag arena, we have come up with 5 steps that we believe will reduce confusion and facilitate a smooth transition.
Step 1: Determine the level and causes of variability across your fields.
There are numerous tools to help you do this; we like yield maps, PowerZone 2.0™ maps, elevation maps and soil conductivity maps. PowerZone 2.0 management zones start with up to15 years of satellite imagery that is processed with the PurePixel Vegetation Index to estimate crop productivity by year. These annual inputs are then combined and management zones are created. The result is an accurate summary of past crop productivity patterns that can be used to make management decisions for a field going forward. These powerful maps are an investment whose value as a decision-making tool will last for many years.
Step 2: Reduce over-application in underperforming areas
Once you have your fields ranked based on variability, look for fields with an opportunity to save money by reducing inputs in the low productivity areas. Typically about 10-20% of a field under-performs. In the review, savings from the reduction in inputs across these high-risk zones generally accounted for $7 of the $35/acre average net return attributed to variable rate fertilizer. In some cases, the causes for the underperformance can be addressed over time, ie water management but for now, reduce your investment in these areas.
Step 3: Investigate and correct the yield-limiting factors in the higher producing zones within your fields.
In North America, we know there are about five challenges per field on average. These could include pH, soluble salts, sodium, texture, compaction, soil profile depth, water table, weed patches, nutrient deficiencies, nutrient imbalances. Tools useful here are soils maps, plant counts, soil and tissue sampling and scouting.
Step 4: Adjust your yield goals and adjust VR rates
Now you are ready to take advantage of your fields’ new yield potential. Set yield targets in the high productivity zones more aggressively than you’ve set whole field yield targets in the past. Next, adjust your fertilizer rates to meet nutritional needs of crop at this new yield target. In the review, this step typically resulted in $28 of the $35/ac average return on investment for variable rate.
Use your yield maps and perform a yield-by-zone analysis to determine how close you came to hitting these new more aggressive yield targets. With a couple years of data, you will begin to determine your upper limit of yield potential by crop type with this data. Sometimes it’s helpful to think of yield targets in zones as a percentage above or below the field average. This may make it easier to set these targets on a farm level basis.
Step 5: Measure results and returns
Bill Gates has this to say on the importance of measuring results, “Measurement empowers decision-makers to determine best practice. Above all, measurement allows implementers to demonstrate effectiveness by making a clear link between money and results”. Again, there are a number of tools to help you do this but we like Profit Maps to show areas of financial loss and gain. Profit Maps are available through your Trimble Ag Solution subscription. Once yield data is in you can also compare VR against a constant fertilizer rate.
At a single glance, you are able to see where your fields are making you money, and where the cost of inputs and amendments is not paying off. Keep in mind, Precision Ag is a farm management strategy, not a one-year experiment. It is a farm management style that is best evaluated using profit maps over the long-term.
Back to the informal review of VR results coming up with an ROI $35/ac – this number should increase over time as your yield environment changes and your ability to match input with output goals improves.
Got more questions? Reach out to your Agri-Coach.