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Shifts spur investments in precision ag technology

The recent shift in the ag economy has caused some farmers to re-evaluate investment decisions including technology.

Nathan Thompson, assistant ag economics professor with Purdue University, says there are several things farmers should consider when investing in precision ag technologies.  

“Do these technologies actually benefit my farm—do they make me more profitable and more efficient,” he says.

He says several recent studies show adoption of technologies has small but positive impacts on farm outcomes.

“So for example, David Schimmelpfennig in 2016 reported that precision ag technologies increase farm net returns by somewhere between 1-2 percent,” he says. “Another study we’ve done at Purdue has suggested that as you add tools to the bundle of precision ag technologies on your farm, that increase efficiency somewhere between 3-10 percent meaning you’re able to produce more yield relative to the inputs you use.”

Thompson says even small outcomes could have big implications for farm structure and future consolidation.  

“There is no recipe for success—the key is to think of a strategy that best fits you and your farm,” he says. “What resources do you have and how can you develop a digital ag strategy that best fits your farm.”

Thompson spoke during the special edition of Commodity Classic.