Most farmers in America don’t currently use farm management software (FMS) – but that could change, fast.
Working from data collected from a survey of 1,490 farmers in January 2018, a new report estimates the US market for farm management software could grow to $1.62 billion. According to the report from Alpha Brown, the Israeli agtech market research company, the farm management software (FMS) market holds enormous potential, especially for farms under 50 acres.
Despite the first farm management software platforms’ introduction to the market more than a decade ago, not to mention Microsoft’s debut of Excel in 1985, most farmers, according to the study, still rely on pen, paper, and non-computerized tools (69%). Many add standard software like Excel or general accounting software to the mix as well (56%). Just 16.5% of the farmers surveyed currently use any kind of FMS.
Taken as representative of the US farming population, that means about 350,000 farmers currently use FMS systems, spending about $420 million annually. Small farms predominate those who use FMS systems. Farmers managing 50 acres and under account for more than 25% of farmers using tailored software. Additionally, operations focused on field vegetables, field fruits, and beef currently take most advantage of FMS systems.
FMS systems, however, don’t come cheap, and many farmers don’t spend big on technology. The report cites an average annual cost of $1200 – a significant number for farmers who tend to spend less than $5000 annually on technology.
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Moreover, in much of America rural broadband connectivity lags, posing a potential challenge to FMS systems.
Despite a tendency towards low-tech or non-specific tools, the potential for farm management software is high. Most farmers are interested in the potential for software to increase profitability, provide decision-making tools and metrics, and decrease their costs of business, though many expressed interest in more specific functions like herd and animal management.
Despite interest among farmers, there also appears to be a lack of awareness that farm management software exists, according to the report. Roughly 70% of the farmers surveyed were not familiar with existing FMS systems, which tend to offer farm operation services, financial support, weather data, analytics, and consulting services.
A lack of education and awareness of what FMS systems do in effect limits the reach of the platforms. Without enough knowledge to make informed decisions about whether or not to use FMS systems, not to mention which one to pick, many farmers have yet to explore the possibility.
Nevertheless, interest remains high. Alpha Brown estimates potential growth in the market at an additional one million farms in the United States alone. And farmers are more excited about the prospect of investing in FMS and the associated data analytics than in either farm robotics, IoT, or ag biotechnology.
With effective, targeted marketing, the opportunity for growth remains substantial, concludes the report.