Mystery Surrounds Spending Habits of Ag Retailers in 2024
The results of the 2023 CropLife Precision Agtech Buying Intentions Survey have presented a mystery for analysts trying to interpret the data. On one hand, a slight majority of ag retailers in 2024 foresee spending more on precision agtech products this year compared to last year. However, when looking at the breakdown for the individual products that are included in the precision agtech category, the percentage of respondents planning to spend more than $1 million to make these purchases is down across the board compared to 2023. This discrepancy has left experts wondering about the factors behind this trend.
The 2023 Precision Agtech Survey: A Look Back at Motivations
CropLife magazine has been conducting surveys on ag retailers’ spending in crop input categories for the past 10 years. However, with the recent influx of new developments and products in the agricultural industry, CropLife decided to delve deeper into how ag retailers were coping with these potential new or improved product segments. Thus, in January 2023, CropLife released the findings from its 1st annual Precision AgTech Buying Intentions Survey. The goal was to assess the ag retailers’ buying plans in the field of precision agtech.
2023 Saw an Increase in Spending for Precision Agtech Products
According to the survey, 2023 was a better year in terms of overall spending for precision agtech products compared to 2022. In the 2024 survey, 47% of respondents reported that their spending levels for precision agtech products had increased, down 1% from the previous year. However, the percentage of respondents reporting flat sales dropped by 5%, while 8% reported a drop in spending levels, representing a 6% increase compared to the previous year. These findings mirror the results of another survey conducted by CropLife called the CropLife 100, which showed a slight increase in overall precision agtech revenues for 2023.
Where Ag Retailers Plan to Invest in Precision Agtech in 2024
Among the different precision agtech segments, ag retailers are primarily planning to spend their money on autonomous vehicles in the 2024 growing season, according to the survey. The survey asked respondents how much they planned to spend on each of the 11 product segments, with options ranging from less than $100,000 to more than $1 million. Autonomous vehicles emerged as the segment with the highest percentage of respondents (20%) planning to spend over $1 million. Autosteer, guidance systems, imagery products, and boom/nozzle controls also ranked among the top five segments with more than $1 million in planned spending for 2024.
Surprising Findings: Low Investment in New Precision Agtech Segments
Despite the increasing buzz and industry interest surrounding precision spraying systems, drones/UAVs, and artificial intelligence (AI) in the 2023 growing season, the survey revealed that only 6% of ag retailers plan to spend more than $1 million on these segments in 2024. This finding came as a surprise, as many expected at least one of these newer precision agtech segments to have a higher percentage of ag retailers investing in them. The data suggests that while these segments may be generating interest, ag retailers are not yet ready to commit significant financial resources to them in the upcoming year.
In conclusion, the 2023 CropLife Precision Agtech Buying Intentions Survey presents a mixed picture for analysts. While ag retailers overall predict increased spending on precision agtech products in 2024, the breakdown of specific product segments reveals a decrease in the percentage of respondents planning to spend more than $1 million. The survey highlights the dominance of autonomous vehicles in terms of planned investments, while also highlighting the relatively low investment in newer segments such as precision spraying systems, drones/UAVs, and artificial intelligence. These findings provide valuable insights into the evolving landscape of precision agtech and ag retailers’ buying habits.
Analyst comment
This news can be evaluated as neutral. The market for precision agtech products in 2024 is predicted to see increased spending overall. However, there is a discrepancy in the breakdown of specific product segments, with a decrease in the percentage of respondents planning to spend more than $1 million. Autonomous vehicles are expected to be the primary focus for investment, while newer segments like precision spraying systems, drones/UAVs, and artificial intelligence have relatively low investment. This suggests cautiousness from ag retailers in committing significant financial resources to these newer segments in the upcoming year.
