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How to evaluate farm tech opportunities

iStock/Getty Images Hand holding tablet with AR maintenance application and predictive alert for part of machine.
Ask these three questions to make smart decisions.

There’s no question that technology has helped bring about huge gains in productivity and efficiency in agriculture over the past couple hundreds of years. Today’s farming operations use a great deal of advanced technology, such as precision agriculture, that fuel improvements in the operation.

There are so many opportunities these days to invest in new technology on the farm, in a variety of different areas. But if a farm leader purchased every single one, they’d likely be spending far too much per acre – and likely seeing not nearly enough return to cover the costs.

Selection process

Here’s what I’ve seen some of the best farm leaders use as a strategy when it comes to selecting technology for their operations: They first take a very analytical look into the potential application of the technology to their farm, and they make decisions based on what they uncover.

They don’t discard new ideas and practices just because they’re new, but take time to carefully consider what might work for their farm. They take the middle ground and don’t waste their time with each and every new farm tech idea or product that comes out but evaluate it through the lens of the needs of their operation.

This means not letting themselves be distracted by new technology that might be great for some farms but doesn’t translate to real improvements in efficiency in your operation. Some farm leaders might find that to be difficult, while for others, taking the time to really consider the worth of a new technology might prove tougher.

Three questions to ask

Here are three questions to consider when evaluating potential technology for your farm.

  1. Will it bring greater efficiency (and how much)? The key thing that farm operations growing commodity crops must do is to become the lowest cost per unit producer. What drives that process? In one word: Efficiency. Working for gains in efficiency in all aspects of the operation can add up big time. Sometimes, a technology can help bring that efficiency or make it possible. As you consider if and how the tech will make your farm more efficient in some way, try to pinpoint the gains as much as possible rather than looking at it in a general or abstract way.
  2. Can we quantify the return on investment (ROI)? For any technology or program that you must invest in through a purchase of some sort, work to see if you can quantify how much time, money or, ideally, both time and money that the new tech will save your farm. If the technology will achieve results that help drive dollars to the bottom line, that’s important information to know in your decision-making process.
  3. How smoothly can we implement it? It can be helpful to have some idea of the level of current comfort or familiarity that you and others in your operation have with the particular type of technology. For example, will you need to bring in someone from outside of the operation to help with the initial installation or implementation of the technology? Or to do troubleshooting or ongoing support? Bringing in outside expertise isn’t necessarily a deal-breaker; it’s just another element to be aware of.

Another area of the farm where farmers often have questions is around marketing plans and decision-making. To get in touch with our group of market advisors or get a free trial of our marketing information service, visit www.waterstreetconsulting.com

The opinions of the author are not necessarily those of Farm Futures or Farm Progress. 
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