Year of Publication

2006

Document Type

Thesis

College

Agriculture

Department

Agricultural Economics

First Advisor

David L. Debertin

Abstract

In the recent past precision farming has become increasingly popular amongfarmers. However, little has been done to study the business aspect of precision farming,with most research focusing on the production side. This purpose of this thesis is tostudy the feasibility of successfully opening and operating a precision farming firm inKentucky. To determine the feasibility of such a venture a computer model was createdand a producer survey was designed and distributed to farmers in Western and CentralKentucky.The purpose of the computer model was to determine the factors that wouldinfluence the successful operation of a precision farming firm including number of acresserviced per year, pricing of services, the cost of capital to borrow money, and manyother factors. A break-even analysis was performed to determine what kind of annualincreases in business would be required, what price range services should be in, and atwhat interest rate money could be borrowed and a simulated precision farming firm couldstill operate successfully.The producer survey was mailed to 336 farmers in Western and Central Kentuckybecause of their geographical locations and the type of crops that are grown there. Thesurvey response rate was 20 percent and of the 66 surveys that were returned 59 wereappropriate and useful for research. After compiling the results of the surveys,regressions were run to determine any correlation between dependent and independentvariables that affect the adoption rate of precision farming techniques. The results foundthat a negative correlation exists between age adoption rates of precision farming and thata positive correlation exists between farm size and adoption rates of precision farming.After conducting the research, it is believed that given the right economicconditions and management a precision farming firm is very capable of thriving inKentucky. However, the workforce must be very motivated and capable of constantlyrecruiting new clients to adopt precision farming.

Share

COinS