Countless articles have been written about the potential value of ag data. But the immediate question for farmers trying to decide whether to invest in an ag data product is what is the return on investment (ROI)? Listening to grower panels at precision ag events has convinced me that most farmers still don’t know what the ROI is for most ag data products on the market.

At least until now, companies that stored ag data have used 4 different pricing models:

Freemium entry-level products with premium paid-for products. Many companies offer 2 levels of ag data storage and analytics, a free basic plan that is designed to showcase some of their offerings, and a premium version that has more features. Others accomplish this same freemium/premium model with free trial periods.
A dollar per acre model. This is probably the easiest model for a farmer to pencil out to determine ROI.
Annual or monthly fee for services. Lawyers in the industry likes to call these “subscription agreements,” but perhaps farmers would rather call these arrangements “ag data leases,” since you are paying an annual or monthly rental fee to use storage and analytic tools for your data.
Ag data tools included with the purchase or lease of software, hardware, a product or service. Some companies offer ag data storage and tools as part of a hardware or software purchase. Others throw in “free” ag data storage when you use their services or buy their products. In each instance, the price for ag data storage is built into the program, product or service. Presumably the ROI is built-in as well.

I don't know of any 100% free, Gmail-type models, where farmers get free storage and analytics in exchange for using a web portal with targeted advertisements. I'm sure such model is coming. Its absence on today's market suggests to me that ag tech providers and advertisers still don't know the ROI on ag data either.

Today, the farmer pays for storage of their ag data in the cloud. When will see this model flip, and ag tech providers start to pay farmers for storage of their data on the condition that such data is shared with the provider? Recently, FARMOBILE made headlines by announcing that it will pay farmers in Minnesota $2 per acre for ag data generated using FARMOBILE's data collecting PUC. This is the first time that I am aware of that an ag tech provider has promised a specific ROI for using its technology.

Is this the start of a trend? Let's hope so.

JANZEN AG TECH BLOG