Price Challenges Are Blocking Adoption of Sensors in Agriculture
In Massachusetts, Lux Research is reporting that innovative pricing and service models will be key to the success of sensor applications in agriculture.
“With farmers facing price variability and other uncertainties,” said Lux, “ few are able or willing to risk significant capital on sensing technologies, which can help make more efficient use of soil, water, pesticides, and equipment. Developers need to target the crops best suited for their technologies and create attractive financing or leasing options, or adopt service models that resonate with the growers. Among the Lux findings:
• Only the largest corn farmers can afford most sensors. With many growers operating near a break-even point of $4 per bushel, only farms over 2,500 acres will find it attractive to purchase new sensor hardware. A services model with creative pricing options could be appealing for a broader range of row crop growers.
• Potato farms are less dependent on scale for affordability. Increasing yields with soil moisture sensing and analytics technologies will appeal to potato growers, who can afford a technology cost of $100 per acre, with little difference in affordability across farm sizes from 50 acres to 500 acres.
•Wine grape growers are open to quality-increasing technologies. Sensors that help growers produce premium quality grapes that fetch ultra-high prices, and can help cut production costs will be most appealing to wine grape growers. Again here, larger vineyards of 50 acres and larger have the greatest tolerance for hardware purchases, while smaller vineyards will gravitate to services.
Category: Research
