Quantifying the Economic Value of Agriculture Drones
When Measure 32 approached us to support the formation of an ROI Calculator™ as a tool for farmers to quantify the economic value of drones, our team was excited to jump on board. Working in the communications world, I am constantly asked, “How do you quantify the benefit of this technology?” The answer has been speculated but, until now, not explicitly proven. With the support of the American Farm Bureau, a group of technology leaders, including Measure 32 and Informa Economics, set out to collect and explore the data.
The market leadership that PrecisionHawk has established in agriculture made us a clear fit to partner on data collection and analysis in support of this project. We believe, as we explained to Informa on-site at our headquarters, that drones no matter the industry have two primary functions: change detection and anomaly identification. With unexpected and frequent changes that growers experience, drones play an important role in providing real-time information that impacts a farmer’s decision making. The economic outcome from that decision demonstrates the value of the drone.
To find that value, Informa identified three areas of focus in the creation of the ROI Calculator™: crop scouting, 3D terrain mapping and crop insurance. Crop scouting is one of the most natural fits for drones, providing prescriptions to help farmers appropriately manage inputs. 3D terrain mapping allows for quick assessment of field elevation and has been identified as creating positive returns for farmers in Canada. (A country that has been flying drones commercially for years.) Lastly, crop insurance is an opportunity that the group could not ignore as we consider that nearly 50% of a farmer’s yield gap is due to weather conditions. There are a number of ways that drones are predicted to enhance efficiency of initial insurance surveys, from basic visual damage assessment to increased operational tempo.
After the study concluded, the group presented two main findings:
1. Drones provide estimated yield increase
Assumption: Current crop yields are not achieving their maximum potential. Yield is, on average, about 20% less than it could be under optimal circumstance.
Finding: Study estimates that drones can reduce the management yield gap by up to 25%
2. Drones provide input savings
Assumption: Farmers tend to over-apply resources
Finding: Drones provide information that enhances variable rate technology, reducing input cost. Study estimates there is a 5% additional input saving by using the information collected by a drone.
So, where is this industry going? There are many potential applications for drones in agriculture, and the three applications explored in this study are achievable today using current technologies. However, this is just the beginning. As technology and data analytics tools develop, we will work to collect and provide the industry with more information and education that will assist in the adoption of these tools worldwide.
Note: The data provided to the study by PrecisionHawk and analyzed in our DataMapper software estimated factors including plant height, weed detection, plant emergence and field topography to name a few.