Local co-ops embrace high-tech agronomy systems
E. Eldon Eversull
Agricultural Economist
USDA Rural Business-Cooperative Service
Local cooperatives are rapidly adapting to the technological revolution in agronomy practices. How fast? In just three years, local cooperatives more than doubled their adoption of high-tech agronomy systems, according to a USDA study.
In 1996, only about 24 percent of the local cooperatives reported having fertilizer application equipment that used global positioning system (GPS) and global information system (GIS) technology. Three years later, that percentage more than doubled --to 57 percent-- among the same respondents. Sixty-eight percent of local co-ops are now able to prepare field maps with the aid of GPS and almost half can combine the maps with crop protectant application for record-keeping purposes. And an additional 16 percent want to add GPS services.
This information is from a recent survey of local co-ops conducted by USDA's Rural Business-Cooperative Service. Cooperatives were asked about their crop protectant sales, supply sources, competitors, type of competition and what services they offer. Almost 400 local farm supply and marketing cooperatives responded. These co-ops have combined crop protectant sales of $830 million, or 40 percent of local agricultural cooperatives' crop protectant sales. The results of this survey are discussed in a pending study, Crop Protectant Operations of Local Farm Supply and Marketing Cooperatives.1
The crop protection industry has undergone many changes during the past two decades. Increased input costs, environmental concerns and low crop prices in the 1980s placed more emphasis on sustainable agriculture, using less fertilizers and crop protectants. Interest in technology increased during the 1990s. Technology permitted crop protectants to be applied in precise amounts and locations.
GPS technology pinpoints within several yards the location of crop protectant application equipment in a farmer's field. GIS maps can then be made that combine the location within the field with soil samples, scouting reports on pest and weed damage and yield monitor results.
More recently, genetically modified organisms (GM0s) have gained attention. Some GMOs allow the farmer to use less crop protectants by planting insect-resistant varieties, such as Bt corn and Bt cotton. Other GMOs are resistant to popular broad-spectrum herbicides so they need less crop protectant treatments and because of the reduction in weed pressure on the crop, promote no- or minimum-till practices.
Scientists, as well as farmers, have broadly embraced the benefits of GM0s and supported their use. Some suggest GMOs may provide the opportunity for farmers to produce enough food to overcome world hunger. Some consumers and/or consumer groups will continue to object to GMOs until they can be shown to be safe and directly benefit consumers, such as GMO crops that help fight disease.
Even with this new technology that uses field maps, scouting reports and aerial photos, farmers still have many decision and interpretation problems. Farmer-owned cooperatives, recognizing the need for better information and analysis, have been on the forefront in providing crop/agronomy specialists to interpret the technology and help with recommendations on crop protectant application, field mapping and record keeping.
Cooperatives leading the way
The 185 surveyed cooperatives that provide GPS/GIS field maps are larger than the average survey respondent. Their crop protectant sales average $3.1 million, compared with $1.3 million for the 198 survey cooperatives that do not provide GPS/GIS maps. The GPS/GIS cooperatives purchase about 73 percent of their herbicides and insecticides from regional cooperatives, the most common sources (in this study) being CHS Cooperatives (Cenex Harvest States)/Land O'Lakes, Farmland and Growmark. These same regionals are most likely supplying both crop protectants and promoting agronomy technology to many of these local cooperatives. The other 198 cooperatives have looser ties with regionals, purchasing only about 58 percent of their crop protectants from them.
Almost 100 percent of the GPS/GIS cooperatives employ crop/agronomy specialists to help farmers choose the correct crop protectant and scout fields for pests and weed damage (table 1). While all of the GPS/GIS cooperatives make field maps, half of the other cooperatives would like to do so in the future. Almost 80 percent of the GPS/GIS cooperatives have crop protection application equipment that can be guided by GPS units. Only 10 percent of the other cooperatives have GPS-guided application equipment, but 43 percent would like to. Keeping records of farmers' fields can be done by 69 percent of the GPS/GIS cooperatives while about 3 percent of the other cooperatives are capable of doing so. Again, about 43 percent of the other cooperatives would like to be able to do this.
Regional comparisons
There are large regional differences among cooperatives in their use of agronomy technology. Ten standard farm production regions2 are used to analyze responses in a regional format. Because of the small number of respondents in four regions, the Northeast and Appalachian, and Southeast and Delta States are combined into two regions. The Corn Belt, with 143, has the most respondents, followed by the Lake States and Northern Plains, both with 89. The Corn Belt also has some large respondents, resulting in crop protectant sales averaging almost $3.2 million.
Cooperatives in most regions have a high incidence of offering crop/agronomy specialists for recommendations and field scouting (table 2). The use of GPS/GIS technology is centered in the Corn Belt, where the cooperatives are some of the largest respondents and corn and soybeans are the predominant crops. Almost 69 percent of the Corn Belt cooperatives have application equipment with GPS units; field mapping can be made with GPS/GIS technology by 85 percent of the cooperatives, and record keeping with this technology by 66 percent. The use of GPS/GIS technology falls as cooperative size decreases and when the predominant crops are not corn and soybeans.
Crop protectants are applied based on pests and weed pressure, soil tests, infrared, satellite and aerial photography, and field scouting. Additional analysis of GPS/GIS information is only as good as its interpretation. Many farmers rely on outside help to scout their fields for crop protection. In the Corn Belt and Lake States, where 85 percent and 66 percent of the respondents, respectively, provide field mapping, cooperatives also employ crop/agronomy specialists more than 94 percent of the time.
Strong sales growth
Local cooperatives studied generally have experienced strong growth in crop protectant sales, with an average annual increase of about 11 percent from 1991 through 1999. These cooperatives support the cooperative agricultural inputs system, purchasing more than 68 percent of their herbicides and insecticides, 48 percent of their fungicides, and 50 percent of all other crop protectant products from regional cooperatives.
Their primary competitors for these sales to farmers are private suppliers, followed by other cooperatives. Crop protectant price is the strongest competitive tool, but advisory scouting and other services is also important.
Most cooperatives apply crop protectants for farmers. Crop/agronomy specialists are often employed by local cooperatives to assist the farmer in making crop protection decisions. Many cooperatives also provide a record service to track the farmers' use of crop protectants.
The use of GPS/GIS technology is being championed by local agricultural cooperatives. Field mapping is available to 68 percent of the crop protectant volume. The GPS/GIS technology is expensive, so larger cooperatives are more likely to offer it. Many of the respondents not offering it want to offer GPS/GIS technology in the future.
Compared with cooperative fertilizer operations in 1996, there are many similar responses. Local cooperatives are still strongly supported by the regional cooperative procurement and distribution system. Private suppliers and other cooperatives are strong competitors, especially on price.
Cooperative crop protectant application equipment with GPS/GIS technology, combined with the farmers' use of yield monitors on harvesting equipment, provides farmers with maps showing where crop protection works and where pest damage lowers yields.
Local cooperatives, with long experience in fertilizer and crop protectant application and employing crop/agronomy specialists, can help interpret or make field maps for farmers. Working with regional cooperative personnel, locals provide agronomy record-keeping programs and innovative ways to combine field maps, yield monitors, and fertilizer and crop protectant application equipment.
Use of GPS/GIS technology, crop/agronomy specialists and record keeping is expensive. Many of the respondents that do not offer some or all of these services want to offer them but may be unable to because of the high fixed costs and large volume of crop protectants required. Smaller cooperatives may be able to share a crop/agronomy specialist with a nearby cooperative or purchase GPS/GIS application units with another cooperative(s) and share the use and expenses. These cooperatives might also consider setting up an agronomy subsidiary or limited liability company to share the use and expenses of new technology, equipment and personnel. [end]
1 This study will soon be available for viewing at www.rurdev.usda.gov/rbs/ pub/newpub.htm.
2 Standard farm production regions used, Northeast: ME, NH, VT, NY, MA, RI, CT, PA, NJ, DE, MD, and DC. Lake States: MI, WI, and MN. Corn Belt: OH, IN, IL, IA, and MO. Northern Plains: ND, SD, NE, and KS. Appalachian: VA, WV, KY, TN, and NC. Southeast: SC, GA, AL, and FL. Delta States: MS, LA, and AR. Southern Plains: OK and TX. Mountain: MT, ID, WY, CO, UT, NV, AZ, and NM. Pacific: WA, OR, CA, HI, and AK.
