If the ag industry has taught precision farming dealers anything during the last few years, it’s that no longer can they rely on singular sales of hardware and expect to grow business.
For some, this has been a hard lesson learned. But the evolving market has allowed adaptable dealers to capitalize on changing technology priorities among their farm customers.
The results of this year’s sixth annual Precision Farming Dealer benchmark study — with contributions from nearly 100 farm equipment dealers, input retailers and independent precision companies — continue the generally positive financial outlook and results dealers had in 2017.
Based on the responses gathered during the first quarter of 2018 from 29 different states and Canada, about 31% of dealers reported precision revenue growth of 8% or more in 2017, more than double the 15% forecast in last year’s report.
This marks the second consecutive year dealers exceeded their higher-end revenue expectations by more than double. Last year, 23% of dealers reported 2016 precision revenue growth of 8% or more, more than doubling the 10% forecast from the 2015 report.
However, dealers fell short of more modest revenue projections in 2017. Some 44% forecasted growth of 2-7% in last year’s report, but 2018 data shows that only 25% achieved that goal.
Still, revenue declines are less significant than in 2016, when 23% reported a dip of at least 2%, including about 8% that saw a decline of 8% or more.
Further analysis of 2017 revenues shows that 30% of farm equipment dealers — which account for nearly three-quarters of survey respondents — reported precision growth of 8% or more, doubling projections. However, only 23% reported revenue growth of 2-7%, well below the 2017 forecast of 45%.
So what are dealers expecting this year? Overall, about two-thirds forecast revenue growth of at least 2% over 2017, with about one-quarter projecting growth of at least 8% — the highest total since the study began tracking revenue outlooks 4 years ago.
Only about 4% of respondents project revenue declines of at least 2%, a record low. Some 29% expect precision revenues to remain flat in 2018, consistent with the 2017 forecast.
Optimism for 2018 is highest among farm equipment dealers, with nearly 70% projecting precision growth of at least 2% and only 3% project a measurable decline in precision revenue.