Farmer Jim Walter prepares to plant in a corn field near DeKalb, Ill. Tony C. Dreibus/The Wall Street Journal
Jim Walter’s tractor steered itself as he sat in the cab, scanning a computer screen showing corn seeds pumping into his soil. By the time his 16-hour work day was over, he’d planted 310 acres—the rough equivalent of 250 football fields.
Such planting feats weren’t possible even a decade ago, let alone when the 66-year-old began farming in 1970. Today they are being repeated across the Midwest, as growers invest in more-sophisticated machinery to rapidly sow crops in narrow windows of favorable weather.
Mr. Walter spent $15,000 to retrofit his John Deere
300 tractor with a Global Positioning System that uses satellites to steer automatically, monitor seed rates and gather and store planting data. His is one of the new high-tech tools that helped corn farmers sow 30% of this year’s U.S. crop in a single week, covering an area roughly the size of New York, according to the U.S. Department of Agriculture.
“This does just about everything but suck eggs,” Mr. Walter said as he rode across his northern Illinois farm on a pitch-black night.
Heavy rains and unusually chilly temperatures in April and May delayed the planting season in much of the Farm Belt this year and last, narrowing the window further and making new technology especially critical. Growers last year seeded 43%, or 41 million acres, of the crop in one week, easily the most since the government started keeping records.
On average, farmers have planted about 12% of the crop each week since record-keeping started in 1980, according to the government.
A yearslong boom in the agricultural sector driven by gains in farm income due to rising crop prices, which jumped on increased global consumption and weather-related production problems, made planting technology offered by Deere & Co. and rivals such as Agco Corp. a big draw for farmers.
Equipment manufacturers sold 44,183 new large tractors in the U.S. in 2013, the fifth straight year of increases for machines that can cost as much as $400,000 each, according to the Association of Equipment Manufacturers, a Milwaukee, Wis.-based trade group. U.S. tractor and self-propelled combine sales totaled a record $19.1 billion last year, according to USDA data.
But now, farmers and equipment-makers alike risk becoming victims of the new technologies’ successes.
Last year’s record U.S. corn crop, which resulted in part from the advanced machinery, triggered a 40% decline in prices for the grain. Now, farm incomes are cooling and Deere and other farm-equipment makers say demand is softening for new tractors.
Net U.S. farm income will decline 27% this year to $95.8 billion, the lowest level since 2010, the USDA projected in February. The income drop may lead to the first decline in U.S. tractor purchases since 2009, analysts said.
Deere said in an earnings report last week that worldwide sales of its farm and landscaping equipment will decline 7% in the year ending Oct. 31 from $29.1 billion the prior year. U.S. sales are expected to fall between 5% and 10%, the company said.
Lower farm income “is putting pressure on demand for farm equipment, especially for larger models,” the Moline, Ill., company said.
The same trend holds true for farmers in South America. Equipment manufacturers sold 65,089 tractors to Brazilian farmers in 2013, up from 28,577 a decade earlier, according to data from Vertical Research Partners and Brazil trade group Associação Nacional dos Fabricantes de Veículos Automotores.
But this year, South American sales will decline about 10%, Deere said in its earnings report this month. That’s down from an estimate made in February of as little as a 5% decline.
Growers are still buying new equipment, including retrofits for existing tractors, just not at such a rapid pace, said Jeff Sloan, who works in management and sales at Sloan Implement Co., which has 17 John Deere dealerships in Illinois and Wisconsin.
“Farmers can only replenish their fleet so often,” he said, though they typically “like to trade up every three to five years,” regardless of economic conditions.
Deere began with auto-steer about 15 years ago. Farmers were skeptical at first, but eventually realized the benefits of a tractor that could drive itself, Mr. Sloan said. Now, farmers can upgrade to software that steers equipment to within an inch of its desired route, tell planters how much seed to put in the ground and broadcast all the information using cloud technology.
When Mr. Walter, the DeKalb grower, began farming 44 years ago, he had a four-row planter that would do its best to plant seed every few feet. Now he plants 24 rows with seed falling into the ground at exact intervals set and monitored by a computerized planter—intervals determined by soil type, quality and moisture.
Clad in dusty blue jeans and a Trout Unlimited cap, Mr. Walter was in a hurry to sow his crop earlier this month. Like many farmers, he had faced delays after a soggy, chilly spring.
“There’s a real sense of urgency to get this field done,” he said over the din of his green-and-yellow tractor. “If it starts raining tomorrow and doesn’t dry up for 10 days, I’ll have to plant in the mud, and that’s no fun.”
Along with the Deere system he bought to steer and monitor seed rates, he outfitted his tractor last year with a computer made by Precision Planting, a division of seed maker Monsanto Co., that ensures the seed is dropped in the right place and spaced evenly. The computer runs about $4,000; adding software and components to retrofit it to older farm equipment can double that cost.
New software, also from Precision Planting, enabled him to connect an iPad that broadcasts planting progress using cloud technology and then maps how much of the field has been seeded. That data is available in real time to Mr. Walter’s business partners.
GPS not only lets farmers plant at night—helping them get the job done faster—but it also ensures they’re not sowing two seeds where only one is needed. Conversely, it prevents them from leaving narrow swaths of valuable land unseeded.
While equipment sales have slowed recently, farmers will continue to upgrade technology because they “find value in the added precision,” said Jeff Kaprelian, a broker at commodities brokerage The Hueber Report in Sycamore, Ill.
Jamie Walter, Jim’s son and co-owner of his farm, said they pay from time to time to take advantage of new software updates that will improve productivity and profits. On average, the Walters spend from $2,000 to $4,000 annually on software and subscription-based services each year. Jamie Walter, who tracked his father’s planting progress on his iPad all day during the recent planting spree, said it took them the better part of two weeks to seed the 2,000 acres the family farms prior to having the precision-planting technology.
“The goal used to be 10 days,” Jamie Walter said. “Now we can plant all our corn in five days.”
(Source – http://online.wsj.com/news/articles/SB1000142405270230490830457956604390402250)