Farm customers are holding onto precision technology to avoid costly guidance updates, but they risk warranty expiration and service charges.

Precision farming dealers routinely work with customers to update or upgrade hardware to ensure peak performance of equipment in the field.

But as the frequency of manufacturer modifications to displays and GPS receivers increases, so too is the willingness of some farm customers to hold onto their precision guidance systems when trading in a tractor or combine to avoid costly fees for accessing higher levels of accuracy.

These pricey “unlocks” — costing $2,500-$10,000 — are often required to upgrade guidance correction services or application controls and cannot be transferred from one piece of precision hardware to another.

“What we’re seeing a lot more of is customers, especially those who are trading in equipment every year or two, keeping their old precision guidance systems, because they don’t want to spend the money on unlocks with the new technology,” says Tyler Klumb, precision farming specialist with Scott Supply Co., a single-store Case IH dealership in Mitchell, S.D. “Unlocks are essentially being used for anything new that is rolling out of the factory and they stay with the hardware.”

While dealerships like Scott Supply are capitalizing on customers who want new machinery every couple of years, the inability to rollover existing unlocks is a point of pain for precision specialists and their customers.

The biggest issue Klumb sees is with warranties on precision hardware expiring because customers are keeping products longer to avoid unlock fees. Warranties on precision farming equipment tend to last 2-5 years, he says.

This is leading to situations where a customer purchases a brand new combine or tractor, but ends up having to pay for precision service because their guidance equipment is out of warranty.

“Now we have to explain to the customer with a new $500,000 combine he just bought why we have to send him a bill for service,” Klumb says. “That’s something every dealer in America is dealing with, and it’s a challenge. Obviously, if a customer is spending that amount of money on new equipment, we don’t want to upset them, so we’re stuck between a rock and hard place.”

Klumb says in some cases, dealers are likely forgoing service charges to keep customers happy. But that’s not a long-term solution, he says.

One precision farming specialist at a farm equipment dealership in Ohio says they’ve “trained” customers to roll their precision guidance equipment with their machinery.

“But unlocks are ruining that cycle,” the Ohio specialist says. “We may be able to order machinery from the manufacturer that’s not fully equipped with technology, but then we’d have to take our rates down accordingly.”

One possible solution would be if manufacturers made unlocks transferrable, at least for a certain time period, Klumb says.

“Maybe a 2 or 3 year window if a customer’s precision system is under warranty would help,” he says. “For customers who are rolling equipment every couple years and not getting their money’s worth, it’s hard for them to justify buying new GPS systems with every new tractor or combine.”

Another option, Klumb says, could be for dealers to charge an annual unlock fee, which would give customers the option to renew a yearly subscription for as long as they keep the precision equipment.

But Klumb says there may also be value in keeping single unlock options available as well, especially since some farm customers are already inundated with other annual precision costs.

“Some would probably rather pay per unlock,” he says. “But if it’s a big farm and the customer is rolling 5-6 units each year, an annual unlock charge would be ideal because otherwise, he’s just throwing money away every year.”