Farm Management Minute: Smarter versus bigger
July 8, 2013
Four instructors from the South Dakota Center for Farm/Ranch Management recently attended the National Farm Business Management Conference in Overland Park, Kan. We had speakers on the topics of succession/estate planning, future of farm policy, risk management, macro ag outlook and the current state of credit quality in agriculture. But the topic that I found he most interesting was Recent Developments in Technology, presented by Don Borgman, Director of Industry Relations for John Deere, North America.
Borgman is an economist for John Deere in Olathe, Kan., as well as a grain farmer in west-central Missouri. The topic of his discussion was how farm equipment and practices has evolved over the years. He showed trends that show that farm equipment has progressively gotten bigger and wider over the past 150 years. Examples included 1800's single bottom plows pulled by livestock compared to today's equipment which includes 500 plus horsepower tractors and planters up to 90 feet wide. He concluded that though the bigger and wider trend has been good for the producer, it can't continue at the same rate. Current equipment is to the point where it cannot get much larger and still be able to be transported and operated safely and efficiently. For example, the newer, larger combines now require not one but two semis to deliver from the factory to the dealership.
This trend with growing equipment has been good and has allowed farmers to grow as well. But if the industry is not going to continue to make equipment bigger and wider, what is the next step? Borgman says the next step is to make the equipment smarter and better. This trend has been evident the past decade with the wide-spread evolution of GPS technology. The GPS technology has allowed farmers to operate the large equipment safely and efficiently. It is hard to believe that this evolution can continue at the current rates, but companies like John Deere are finding any area that they can improve to save time and create efficiency.
An example he gave on creating efficiency was creating a high speed hose and pump to fill water on a sprayer. They said a new one-touch hookup that would fill a 1,200 gallon tank in 2 minutes, versus the traditional method which took 12 – 15 minutes. Once attached and filling, the farmer could get back into the cab and simply pull away once full. They estimated that the time savings would allow the farmer to spray an additional 24-25 acres per hour.
So what John Deere and the machinery industry is doing is a good example of what farmers can also be doing, focus on being smarter and better rather than putting all efforts into just getting bigger.