Big data might equal bigger profits

It sounds like the opening line of a lame joke: three economists walk into an agricultural trade show and …

It isn’t a joke. It’s something that happened to Keith Coble, agricultural economist at Mississippi State University, when he attended the Commodity Classic, an annual event for American corn and soybean growers.

Coble and two other ag economists walked up to a booth of a “major agri-business” company and began talking to a sales rep.

The conversation turned to precision agriculture and then turned into a heated discussion.

“We ended up in a huge argument about whether yield maximization was the same as profit maximization,” said Coble, who told the story at the Canadian Agri-Food Policy Conference, held in late January in Ottawa.

The economists, despite their best efforts, couldn’t sway the sales rep.

He was steadfast — yield maximization and profit maximization are the same thing.

Coble said that might be true in rare circumstances, when corn is at $7 per bushel, but most of the time they’re not the same.

“The idea that you would try to maximize yield to make you more money isn’t consistent with economics,” said Coble, who spoke about the role of Big Data in agriculture at the Ottawa event.

The encounter with the stubborn sales rep made an impact on Coble. He realized that ag economists should speak up and denounce this sort of misinformation, particularly when it comes to precision agriculture.

“I think one of the (issues) on variable rate technology, that we as economists should be pounding on, is telling producers, ‘look, your input supplier may have an incentive to convince you that yield maximization equals profit maximization,’ ” Coble said.

“(But) farmers, especially when commodity prices are not as high, they’ve got to make some tough choices about where are they going to cut back…. Farmers need to be figuring out, are there portions of the field that (are) just not worth farming … or put the fertilizer on the valuable part of the field and leave the marginal portion.”

In fairness, most advocates of precision agriculture and Big Data say the technology can help growers boost yields and cut input costs, thus increasing profitability.

One of the key questions for growers is how to sort through the avalanche of data, which sensors on tractors and combines now generate, to find an information tool that actually does boost profitability.

Coble said noise from all the data collected on farms is only going to get louder.

He provided estimates on the amount of data the average farm will produce in the near future:

  • In 2016 the average (U.S.) farm generated about 100,000 data points, per day.
  • By 2036, that could reach four million data points, per day.

Clarence Swanton, a University of Guelph professor of plant agriculture, said something already exists to distil an Olympic swimming pool of data into something useful.

“A simple, basic starting point, in my opinion, is a profitability map,” he said.

“Precision ag has to do two things: it has to show profitability and it has to show a positive environmental impact…. Otherwise, it’s marginally useful. What’s wrong with precision ag at the moment, in my opinion, is (that) nobody is making money using it. And secondly, is data overload.”

That’s why a profitability map, showing which parts of a field generate the most profit or lose money for a grower, is an easy way to compress the benefits of data into a clean platform, he added.

“Every combine today tracks the variability in yield across a field. Every farmer knows where the good parts of their field are and where the poor parts (are),” Swanton said.

“Putting a dollar value to it brings everything to a common denominator that everyone clearly understands.”

The idea of a profitability map for a farm field is not new.

Alberta Agriculture has information on its website about Money Map, which shows profit and losses within a field. The website dates from 2001 and tells readers that the Money Map software can be used on Windows 95 or Windows 98.

Money Map may have never caught on, but the time may have arrived for profitability maps. Swanton said they make sense for growers and members of the public, especially people worried about the sustainability of farming.

“Now, for the very first time, the link can be made that you can actually farm profitably and (connect) that to environmental stewardship,” he said, by using less fertilizer, water and pesticides or choosing to forgo land that isn’t profitable. “There are certain parts of a field that may not be profitable, no matter what you do.

“(Maybe) you put that land aside and put a cover crop (in) or some bee habitat in there or some trees in there. You make it support some ecosystem services.”

About the author

explore

Stories from our other publications