The search for a ‘win-win’ solution to unprofitable acres

Precision agriculture meets precision conservation in ongoing profitability mapping research

There’s no shortage of data on today’s farms but the most important number — profit per acre — is not easy to determine.

Farming and farmland conservation sometimes seem at odds with each other — a win for one is seen as a loss for the other.

After all, taking land out of production for conservation purposes is seen as a loss of productive farmland, while the ecological community sometimes views intensive ag production as a threat to long-term sustainability.

But an ongoing study is asking, ‘Why can’t we have both?’

In other words, why can’t we have a win-win scenario where unprofitable cropland is refocused on ecosystem services so producers can concentrate on their profitable acres?

Think of it as a combination of precision agriculture and precision conservation, said Clarence Swanton, a weed scientist with the University of Guelph.

Over the past three years, Swanton and fellow professors, Madhur Anand and Aaron Berg have led a team researching profitability mapping systems. Using up to 10 years of yield data from three farms in southern Ontario, they cross-referenced it with provincial market and input price data. Depending on the year, the team’s research found that 14 per cent of the land on these three farms would have lost money under ag production (with more than 50 per cent of the land under research failing to meet minimum revenue expectations).

“A farmer can look at a yield map and think, ‘Yeah, I know this is a low-yielding part of the field,’” said Swanton. “But if you think of it in terms of profitability and you actually see you might be losing money every time you touch down in that part of the field, that resonates much, much more than yield.”

Profitability mapping is nothing new. In fact, a lot of farm equipment now has GIS (geographic information system) technology that can — in theory — tell a farmer how to adjust seeding rates, fertilizer and chemical applications to maximize profits.

But the information is often hard to access, harder to interpret, undersold by equipment dealers (many farmers don’t even know it’s there), and sometimes even proprietary.

So the ultimate goal of the Guelph research is to change that by developing a simple, free, plug-and-play solution that producers could use on their own, said researcher Virginia Capmourteres, a post-doctoral fellow at the university’s School of Environmental Sciences.

“The idea is that farmers can eventually do this by themselves so they don’t have to spend thousands of dollars to hire consulting companies that for the most part keep their data to themselves,” she said.

“We want to provide something that is free, easy enough and simple enough for farmers to use by themselves so they can interpret the data and make decisions themselves.”

Profitability missing

The biggest flaw in precision ag today is that it does not easily factor for profitability, said Swanton.

Rather, the focus tends to be on yield per acre when it should be on profit per acre, he said.

“There’s a lot of hype around precision agriculture — a lot of talk, a lot of cost — but it’s questionable in terms of profitability,” said Swanton. “Precision ag tools gather more information than farmers really know what to do with. The real fundamental question is whether they pay their way.”

The Guelph research on the data from the three southern Ontario farms found that some of the land would have probably been better served if converted to an ecological service (a payment for taking it out of crop production), said Capmourteres.

“There were areas within the farms that — probably because of soil conditions — were just not profitable and we kept seeing that unprofitability year after year,” she said. “So maybe that provides compelling evidence to say these areas really cannot improve in terms of profitability; it doesn’t matter how much management we put into them.

“Investing in environmental benefits — even minimally — can oftentimes be inexpensive when compared with economic losses due to failed harvests.”

The research team determined profitability by using yield maps going back to 2006 and then factoring in input costs and market price data for each year.

Calculating profits by deducting costs from revenue sounds like a simple process, but farmers often run into challenges when they try to do it themselves. Developing profitability maps can be a time-consuming process, and often requires hiring crop consultants. It can also be difficult to extract and interpret data stored in equipment.

If a producer wants to develop or interpret a profitability map, Swanton has two recommendations — start small and hire a crop consultant.

“Take a portion of the acreage and see how that works for you,” he said. “Ask yourself what equipment you need or can modify, and identify anything you may need to make it profitable.

“If you have yield maps for the last three to five years, you’ll want to get someone to help purge the data — make sure there are no extreme outliers in the data — and then convert that to profitability based on the current crop price and the cost of operations.”

Interested farmers may also want to ask their dealership if a certain piece of equipment includes profitability mapping and how to retrieve it.

“They’ll probably say, ‘Yeah, it’s buried in there somewhere in the programming,’” said Swanton. “But it is there. If producers have difficulty, we can link them with our people here at the University of Guelph.”

Goal is to simplify

The ultimate goal of the research, however, is to eliminate the need for third parties in the process altogether.

By the end of the next five years of research, the U of G team hopes to develop a piece of precision software that will enable farmers to punch in some data and find the information they’re looking for in a matter of seconds.

However, this is going to take time, said Capmourteres.

“We just started three years ago and will have at least five more years of research,” she said. “The idea is that we eventually develop some kind of software farmers can use for free to play around with in the winter and find estimates of how much money they think they will make, what areas of their farms they think they should farm, what areas may not be worth farming — some kind of tool to help them optimize their land so they can make their own decisions.”

From there, it would be a matter of scaling to the provincial level with the hope that other provinces will adopt the technology and adapt it to their own circumstances.

“We want to eventually scale this up to a provincial level because for now we’re just working with some individual farms,” said Capmourteres. “We eventually want to find out what proportion of Ontario’s agricultural land is actually unprofitable.”

That raises the question of what to do with land that isn’t generating profits.

One option would be to put those acres into an ‘ecological services’ program, such as Alternative Land Use Services (a.k.a. ALUS), which pays farmers to set land aside to protect riparian areas or create wildlife habitat. Another option might be to seed cropland back to pasture or native grasslands.

But knowing if land is capable of generating a profit or not is the key starting point, said Capmourteres.

“Right now farmers are just adding all of these inputs and putting money into areas which may be better left for conservation. We could increase conservation opportunities on agricultural lands without farmers having to incur economic loss.”

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