The trifecta of COVID, climate and politics has altered the landscape in which agriculture has to operate. We are experiencing everything from supply chain disruptions to labor shortages to rising energy costs. It’s a combination no one wants regardless of the industry.
According to Fortune magazine, steel prices are up 215% since March 2020. In a machine-heavy, capital-intensive business like agricultural retail, the impact only multiplies significantly.
The labor shortage is real. In the depths of the COVID-19 pandemic, the truck transportation industry lost 6% of its pre-pandemic labor force of 1.52 million workers, according to data from the Bureau of Labor Statistics. Ask any input supplier how hard it is to get qualified truck drivers to haul grain, fertilizer and propane. It is next to impossible. Meanwhile, entry-level employees at McDonald’s, Walmart and Amazon receive starting pay between $15 per hour and $18 per hour—double the minimum wage.
And finally, to add insult to injury in this whole brewing economic mess, oil prices hit $86 per barrel as of October of this year. That is a seven-year high. For farmers and ag retail, the oil price trend disproportionately manifests itself in the form of skyrocketing fertilizer prices.
Enter The Game Changers
In September, Frenchman Valley Coop based in Nebraska, took possession of the first OMNiPOWER autonomous fertilizer application rig sold by Raven Industries (now part of CNH Industrial.) OMNiPower is a driverless, self-propelled platform that originated from Raven’s purchase of DOT Technology Corp. in 2020.
At the time, I said ag retail would be the first place true autonomous vehicles would get a toehold. The frightening reality is nearly two-thirds of all operating hours put on ag retail machines are non-working hours.
As an ag retailer you: have a fleet of half-million-dollar machines; can’t find enough souls to even sit in the seats; and it costs a third more in fuel to run than a year ago. Using autonomous fertilizer spreaders may seem like putting a true freshman rookie quarterback on the field, but an accumulation of events has accelerated the need to see whether autonomous technologies are worth the hype.
Current economics are driving the second coming of drone technology heading in a different direction than the imagery route taken initially by many. For example, Rantizo offers ag retailers and farmers the ability to use “swarms” of drones to strategically spray or even seed the toughest acres.
Again, it is all about efficiency. Sending a sprayer with 120' booms into a 25-acre field with boundaries that look like a bad Rorschach ink blot test doesn’t make economic sense for ag retailers. Drones could be a much more logical and profitable answer. In fact, a hybrid model is already evolving where drones and traditional applicators work in tandem in the same fields.
Finally, the technology that will make or break these and most others is the internet. You cannot build a high-tech, data-rich, artificially intelligent ecosystem without internet. Pandemic-related lockdowns exposed the reality of rural areas’ lack of broadband access.
Entrepreneur and billionaire Elon Musk may deliver the solution. Through SpaceX, his hugely successful private space company, he and his team built and deployed a massive low-earth orbit satellite internet service called Starlink. More than 1,700 Starlink satellites are in orbit right now, and the company announced the rollout of nationwide service in the U.S.
The FCC designated SpaceX’s Starlink to receive $886 million to improve rural broadband. Starlink boasts internet speeds that top 100 Mbps. The company already has more than 100,000 customers. Could Starlink finally launch rural America into the 21st century? Let’s hope so.
There are still a lot of efficiencies to be harvested in production agriculture. Time will tell if these technologies make the difference for a brighter tomorrow. But their time has come–in some cases earlier than anyone could have predicted. Ironically it’s just in the nick of time.
