Precision Agriculture Systems and Services in the US Industry Market Research Report Now Available from IBISWorld

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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. In turn, reduced revenue at the farm level limited the ability for crop producers to invest in this industry’s systems and services, and concurrent gains in government subsidies for each crop failed to offset losses in price and volume. Otherwise, growth has been positive during the past five years, including a 3.7% gain expected in 2012 on the back of larger economic recovery and growing acceptance of precision agriculture’s technology.

IBISWorld Market Research

IBISWorld Market Research

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

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.

For more information visit IBISWorld’s Precision Agriculture Systems & Services report

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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

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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