The reluctance or inability of some farmers to grasp the technologies of precision agriculture remains an obstacle. Nevertheless, as penetration of broadband and mobile technologies in rural areas grows farmers will increasingly adopt new ways of farming
Los Angeles, California (PRWEB) January 09, 2012
Revenue for the Precision Agriculture Systems and Services industry is expected to grow at an annualized rate of 1.3% during the five years to 2012. This rate hides solid growth during the earlier years as revenue grew every year except 2009. Recession-related dips in that year reduced the prices of the largest crops known to benefit from precision agriculture, including corn, soybeans and wheat.
According to IBISWorld industry analyst Josh McBee, “demand from agribusiness, government assistance and technological change are the main drivers of this industry’s revenue.” Demand from agribusiness represents the various downstream markets that precision agriculture developers seek to serve. These markets range from farm machinery manufacturers to family-owned farms and publicly funded research operations. At the same time, each individual market within the overarching agribusiness umbrella is driven by a unique set of factors. For downstream farm operations, technological change is also important for enticing purchases, but government assistance in the form of subsidies plays a crucial role in providing the funds to do so.
In the five years to 2017, steady growth is set to continue for the industry. Revenue is forecast to increase from an estimated $1.3 billion in 2012. McBee adds that “the 2012 Farm Bill will likely provide farm operators with incentives to adopt technology that increases efficiencies, while innovations within precision agriculture systems will make the technology more attractive regardless of outside persuasion. The reluctance or inability of some farmers to grasp the concepts behind precision agriculture and its technologies will remain an obstacle during the period. Nevertheless, farmers will increasingly accept precision agriculture, as penetration of broadband and mobile technologies in rural areas grows.”
IBISWorld believes that the Precision Agriculture Systems and Services industry exhibits medium barriers to entry. A rapid rate of technological change poses the most limiting factor for companies seeking to break into precision agriculture. In 2012, the four largest firms in the Precision Agriculture Systems and Services industry are expected to consume roughly 31.3% of revenue, indicating a low market share concentration. Despite operating in a growing, highly specialized industry and facing little competition from substitutes, the major firms are pressured by rapid technological change. Over the past five years, concentration has increased, as large corporations such as Trimble Navigation and Topcon have acquired specialized firms that produce relevant technologies. Over the next five years, rapid technological change will continue, and precision agriculture system technologies will become more widely available. As more firms tap into the industry, IBISWorld expects market share concentration to grow.
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Precision agriculture systems and services include software development, testing applications and consulting activities that gather, track and analyze agricultural data, usually in conjunction with other systems such as harvesting or field-input machinery. Software and related systems may be packaged as individual units for sale to downstream markets or integrated into third-party products such as farm machinery.
Precision Agriculture Systems & Services Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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