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ROI with UAVs: Defining the Precision Agriculture Marketplace for Drones

We’ve all heard the predictions about how much money drones could generate for the US economy, and the FAA itself quoted that number as being over 80 billion in the press release that announced Part 107. Of course, that number is just one of many that are floating around out there, and Colin Snow mentioned on Twitter that he keeps an on-going list of UAS drone forecasts. Regardless of the number you want to run with, you can probably find some prediction out there to back it up.

It’s easy to see why these predictions are what they are, and why so many are bullish around how this technology can impact specific markets, especially precision agriculture. Drones allow growers to quickly get a powerful aerial view of their fields. Nutrient management and water drainage are two key areas where drones can make an impact, and sensors are able to gather and display data that can impact decisions instantaneously.

Discussing how drones can have that kind of literal and economic impact on the farm is something I’ve detailed before, but one thing I’ve quickly learned is that talking about “data” and “decision-making” isn’t enough for most ag professionals. Figuring out the specific approach growers can and should be taking to find value with UAV technology is something I wanted to discover by connecting with people who are working to ensure growers discover and take advantage of that value for themselves.

Defining the Precision Ag Marketplace

Young Kim, CEO of Digital Harvest

Young Kim, CEO of Digital Harvest

Young Kim is the CEO of Digital Harvest, a company that is working to develop new solutions founded on technical insights to help food growers make real-time decisions with agronomic precision. Digital Harvest is currently focused on growers who farm potatoes, wheat, sugarcane, wine grapes, apples, and blueberries, and that kind of crop specificity is something that I wanted to explore.

“Many of my technology colleagues, the unmanned systems providers, look at agriculture as a homogeneous marketplace,” Kim said. “By that I mean that they treat soy, corn and cotton, which are these wide acre crops, the same as farmers who do vineyard grapes, wine grapes, or tree fruits. The reality is they’re very different. You take a grower who grows apples, and they don’t really care nor do their practices really matter to those people who grow soy. Technology providers, sensor guys as well the unmanned systems community would do well to pick a crop and drive some depth to provide more value to that particular grower. The economic model a grower is using has to be incorporated into the kind of technology they want and need to use.”

Crop specificity is really just where it begins though, because just as important are issues of scale. Someone who has 100 acres of a certain crop won’t necessarily be able to use a drone in the same way as someone who has 1,000 acres, even if we’re talking about the exact same crop in the exact same climate. Being able to efficiently and effectively utilize a drone depends on a number of factors, the least of which are related to whether or not a grower is more concerned with how their crops are using their energy to produce fruit or leaves or if they’re trying to gather info that will allow the grower to measure NDVI.

Finding out if major technology providers have the expertise and/or interest in offering products and services that are specifically related to a particular crop is a separate issue, and one that many are currently working through right now. It can be a difficult needle to thread though, as these services and tools can’t become so specific that they’ll end up being completely unique for every single grower.

“As long as UAV technology remains a customized solution it will not get mass adoption,” Kim mentioned. “It has to be general. So there’s some work to be done. But I’m optimistic because everybody’s basically cooking with the same sauce here. We’re all working with multirotors or small fixed wings, and your choices around cameras and sensors are numerous, but relatively set. With those tools someone can take the initiative and put together something that really makes sense from the growers’ perspective.”

Trying to appeal to wide-acre crop or specialty crops farmers, as opposed to something even more specific like a potato farmer, is a matter of choice for manufactures and service providers, but these distinctions are important to recognize. Talking about how drones can and will impact “precision ag” farmers is an ongoing development, but defining how farmers can see a real-world difference with these tools while also ensuring that the conversation doesn’t become too general or too specific is essential.

FAA Regulation with 333, Part 107 and Beyond

It’s no stretch to say that Part 107 has redefined what it will mean to operate a drone for commercial purposes. Until Part 107 goes into effect, farmers that don’t have a Section 333 exemption cannot legally use info they gather from a drone for anything related to their commercial farm operation. Part 107 will change all of that.

Regulation has long been cited as the primary reason professionals in various industries were unwilling to fully explore how UAV technology could impact their business. With uncertainty around how to obtain a Section 333 as well as little desire to have or maintain a pilot’s license to operate the drone, many people elected to sit back and wait until regulation cleared up before fully getting involved.

For farmers though, regulation might have presented a legislative hurdle, but the logistics associated with flying over a farm are for the most part simpler than they are in various other industries.

“Not too long ago I would have said regulation was the biggest hurdle for growers,” Kim said. “By its nature though, agriculture is rural, not around much traffic, and in class G airspace so it has a very low risk environment. Therefore, the 333 is sufficient to address the near term market needs of the grower and the technology provider. The 333 has a higher operator skill requirement which is actually good because it weeds out people who aren’t safety conscious, so we’ll have to see how Part 107 impacts that. Nonetheless, I no longer think regulation is the crutch for adoption.”

With the barrier to entry significantly lower once Part 107 goes into effect, growers of all types and sizes will be able to explore the logistics of how this technology can impact their operations. The specifics of how that will work is something they’ll need to work through, but regulation should no longer hinder that process.

ROI on the Farm

Being able to see a financial return on an investment in drone technology is a major consideration for many growers, and with regulation clearer than ever under Part 107, ROI will undoubtedly shift to being the prime concern for many operators. When the technology first came on the scene early adopters might not have been so concerned about such logistics, but in order to compel wide scale adoption there absolutely will need to be a compelling case for ROI. Creating that case presents us with a bit of a paradox though.

“ROI really doesn’t become attractive unless you start thinking about the unmanned systems as just a part of a solution, not the solution in and of itself,” Kim mentioned. “It takes an investment of time and money from the growers and from the vendors to see how the info gathered from a drone can connect to other things that are happening on their farm. Growers need that info to provide context and create a correlation, and then you get to cause and effect. That’s when the ROI becomes significant.”

This conundrum is particularly challenging since it means the primary concern for most growers is only going to be eased and solved by working through those concerns in a literal way, which is a risk that can be difficult for many to take. It has led to many growers just scratching the surface around how the technology can be used as they try and come up with value propositions that make financial sense.

As Kim mentioned though, the essential thing to note here is that ROI can be realized with drones as part of a solution, and not a solution in and of itself. Anyone who wants to or plans to solely rely on drones to make decisions is likely going to be disappointed, but as part of an ecosystem, UAVs can provide key pieces of information which will directly influence the bottom line.

“Satellite is ubiquitous, but it has coarse resolution, and it doesn’t revisit the space as often,” Kim continued. “Still, it has significant advantages because you can get fairly good sensory information about your crop, just not as high of a resolution. So if you take that satellite as a monitoring tool, the UAV as a detection tool, and combine it with your proximal data for soil and moisture you can get some very precise information. When we start connecting those three things the value proposition of the unmanned system gets much more enhanced.”

That kind of specific value proposition is what we should be focused on enabling, as farmers face harsh economic realities in terms of declining subscription rates from one season to the next. Various pieces of info can be connected in different ways to potentially help ease and relieve some of those economic woes. Linking data that is gathered via a drone with other types of info can make a real difference that directly impacts the bottom line for farmers.

 

Adoption and Utilization

Questions and concerns around ROI are a primary concern for most growers, but such things are directly related to how UAVs are being integrated. As all of the variables are being considered, does it make sense for a grower to seek out a service provider to help sort through the details or try to sort out these logistics for themselves?

Understandably, many growers don’t want to take on the risk of buying something and either breaking it or not utilizing it correctly, regardless of how cheap that initial investment might be. By utilizing service providers, growers can more easily see the ROI associated with that service, if it’s going to be an essential tool, and even if it will be easier for them to buy it themselves.

“Initially, the easiest and lowest risk for the grower and provider themselves is to enter through a service, because the platforms will crash,” Kim went on to say. “They’re not as reliable as they could be. They’re not as intelligent as they will be. Most importantly though, the quality of the deliverable needs to be tightly controlled. You do that when all your assets, the aircraft, time of flight, skill level of the operator etc. are under control, and that’s something very few growers would be able to do, at least at first. Growers that want to jump right in with a UAV are going to have a difficult time having a successful experience because they’re not going to invest the time to train, go through the software processing, etc. I have a very strong opinion that growers and even large companies are best served when they get started by utilizing a service provider.”

As ever, these sorts of guidelines are not universal, meaning that there are undoubtedly countless growers who have bought a drone and are using it to full advantage without the assistance of a service provider. Nonetheless, this is one of the few areas where we can talk about the “precision ag” marketplace as a whole in terms of the pain points that so many farmers are dealing with. Service providers can offer growers real and succinct solutions which will solve those issues while also creating opportunities.

The Future of Drones on the Farm

Talking about how and when UAV technology will be more fully integrated and realized in a specific market can be a foolish notion to entertain, but such guesswork isn’t what’s happening at the field trials Digital Harvest is currently conducting at the Pendleton, Oregon UAS Test Range. Their FutureFarm is connected and integrated in a way that shows growers of all types how the data gathered by drones can be properly utilized.

Rather than just having a sentiment about what’s on the horizon, we’re trying to do something about it,” Kim concluded. “The state of Oregon contracted us to demonstrate an interconnected farm where we can tie together info from a satellite and a drone with soil moistures data to create this real, interconnected farm. We’ve been able to test these things in this real-world environment that isn’t a research plot but instead has growers whose livelihood depends on being successful. Once growers see the benefits, the entire community is going to be able to take advantage of them, and that’s really exciting.”

Enabling these kinds of benefits is top-of-mind for farmers, but I know many growers are thinking beyond the short-term. By the year 2050, the number of people living will swell to almost 10 billion by some accounts, but the ag space is not set to see a similar surge in their ranks. What’s more, farmers might be put under even more pressure to produce, and the interconnectivity of the FutureFarm showcases how the yields and bottom lines can be improved to help ensure the world does not run out of food.

Figuring out they ways in which UAVs will impact an operation is an answer growers need to work through, but asking questions around how they can and should approach doing so is more important and relevant than ever.

Jeremiah Karpowicz
Executive Editor – Commercial UAV News
www.expouav.com/news

(Source – http://www.expouav.com/news/latest/roi-uavs-defining-precision-ag-marketplace-drones/)

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