Recent commercial developments also support the notion that interest in precision agriculture is likely to be greater on higher value crops. For example, sugar beet quality is sensitive to nutrient application and can suffer from both nutrient deficiencies and excesses. American Crystal Sugar Company, the largest sugarbeet producer in the United States, is owned by more than 2,000 North Dakota and Minnesota sugarbeet growers. This cooperative has increased its grid soil sampling in Minnesota's Red River Valley from 13,000 acres in 1995 to 130,000 acres (about 35% of the company's sugar beet acreage) in 1996 (Lilleboe, 1996).

Precision agriculture technologies may have important ancillary uses. For example, the purchase of remote sensing information on crop growth may permit closer marketing ties between producers and grain elevators by improving yield forecasts. As a result, even producers who experience relatively little within-field yield variability may find their share of the increased returns from improved marketing sufficient to make the use of such information profitable.

Evolution of Precision Agriculture

Precision agriculture services may be provided directly (i.e., for custom hire) or may be purchased in the form of hardware and software products embodying those services, or as combination of products and services. In all likelihood, both forms of obtaining precision agriculture services will coexist, with the exact combination depending on such factors as the size of the operation, the technical expertise of the operator, and the density of the local market for services.

Provision of Precision Agriculture Services

New services related to precision agriculture could arise independently but are more likely to evolve from services now offered by crop consultants and input suppliers. Nowlin (1993) estimates that crop consultants provide knowledge-based services on 16 percent of U.S. crop acreage, including 53 percent of cotton and vegetable acreage, 21 percent of corn acreage, and 13 percent of soybean acreage. A study of service offerings by 228 Wisconsin agricultural chemical dealers showed that although precision agriculture services accounted for only a small portion of total gross revenues, the percentage of firms offering these services was increasing (Wolf and Nowak, 1995).

A Purdue University survey of agricultural chemical dealers showed that between 39 and 47 percent of firms offering site-specific services were charging no fee for the service, folding costs into product prices instead. Input suppliers perceive impediments to providing precision agriculture services to include the cost of equipment (61 percent), mismatches with the kind of farming practiced in the area (18 percent), difficulty demonstrating value to producers (11 percent), and the need to train personnel (6 percent) (Akridge and Whipker, 1996).



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