Film or Farm: Which is the Bigger Drone Market? – Part 2

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Film or Farm: Which is the Bigger Drone Market? – Part 2

This is Part 2 in a two-part series that summarizes my views on why video/film/cinema – not agriculture and farming — will be the largest driver of sUAS commercial businesses. In Part 1, I explore thoughts on the market for video/film/cinema, and below I outline why I believe agriculture will lag in market uptake.

The March 2013 market study produced by the Association of Unmanned Vehicle Systems International (AUVSI) titled “The Economic Impact of Unmanned Aircraft Systems Integration in the United States,” says precision agriculture and public safety will make up more than 90% of the market growth for unmanned aerial systems. The report confidently states, “…the commercial agriculture market is by far the largest segment, dwarfing all others.”

I don’t buy it, and here’s why:

Let’s start with the AUVSI forecast.  Read what one commenter said in my last post:

“There is a basic problem with the AUVSI study methodology – it took the total arable land area of Japan and divided it by the number of registered UAS performing agricultural roles in that country to provide a demand factor. It then divided the total amount of arable land in the United States by that same demand factor and used this to forecast its prospective future demand for the agricultural sector as a whole. The problem is, the Japanese agricultural land areas do not correlate in size, capacity, or type of agriculture as performed in the United States. In fact the Japanese usage is largely restricted to spraying of rice paddies on small allotments as a replacement for labor which has shifted to the cities. The only possible comparison that the Japanese land area to UAS numbers ratio that could have potential validity is to compare the Japanese ratio with the total amount of land used in rice cultivation in the United States. That is a very different equation than that used by the AUVSI study and can be predicted to give a very different set of economic figures as a result. AUVSI has used very bad modelling to build its argument on, and its figures should be used very, very, very cautiously.”

He’s right.  So how do we get a proper forecast?  That will take some time to work out and look for material from me on that later. For now let’s look how modern agriculture has historically adopted and used technology, because the devil’s in the detail.

The farmer and the satellite

With the launch of the Landsat 1 satellite in 1972, NASA funded a number of investigations, including one that  examined the spring vegetation green-up and subsequent summer and fall dry-down throughout the Great Plains region of the Central U.S. The researchers for this study found a way to quantify the biophysical characteristics of vegetation from the satellite images.  They were able to calculate the ratio of the difference between the red and infrared radiation being reflected back by plants on the ground as a means to determine the vigor of plant life. This led to a metric known as the Normalized Difference Vegetation Index, or NDVI.

NDVI attempts to simply and quickly identify vegetated areas and their condition, and it remains the most well-known and used index to detect the health of live green plants today.  Since early satellites acquired data in visible and near-infrared, it was natural to sell it packed up in maps to farmers.

NDVI allows agronomists and producers to identify problem areas and make timely decisions. Scouting maps can be requested at key dates as guidance for field visits. NDVI-based scout maps show variations in the field, so users know where to look in the field to determine where corrective or preventative measures are needed. Users can plan their field visit locations, take it to their GPS or a printable pdf report, and accurately evaluate the reasons for in-field variability.

Monitoring fields

NDVI maps are also used for monitoring fields, detecting anomalies, and for estimating crop yields. A strong correlation has been demonstrated between yields and NDVI at certain crop growth stages, as described in this research.  Besides satellite-generated images, farmers also have access to more resolute imagery taken from manned aircraft.  They can subscribe to a service like Terravion and GeoVantage to get NDVI maps every week if they like. The greater the frequency, the lower the cost per acre.

Here’s the rub: use of aerial imagery all sounds great until you start to look at the numbers. According to this report, only 21% of service providers (referred to as dealers in the report) who offer aerial imagery say it’s profitable, and it remains less profitable than other precision application services.

To spray or not to spray?

Here’s more interesting detail from examining how farmers are using technology today. Farmers know that plant growth regulators, insecticides, herbicides, fungicides, and mid-season fertilizers applied to selective locations can be effectively used to maximize farm output. Since NDVI maps from satellites or manned aircraft show variation of biomass within a field, farmers can divide those differences into management zones and address crop issues with variable rate spray applications (i.e. use more of this nutrient here, less of that pesticide there).  The idea is to minimize costs while increasing yields by using as little as possible of expensive inputs, applying them precisely where and when they are needed.

But here’s some breaking news. The vast majority of farmers do not use variable rate prescriptions, and the trend is currently in the wrong direction. This well-regarded survey says variable rate pesticide application usage decreased from 22% of all farmers in 2011 to 16% in 2013. And it seems there is low adoption of aerial imaging when it comes to providing guidance for targeted nitrogen application as well. Nitrogen fertilizers, which are expensive, are one way farmers are able to achieve the high yields we see today with modern agriculture. But a recent poll of Iowa farmers’ nitrogen management practices show only 25% of corn and soy farmers use aerial imagery to reduce nitrogen application.

The key takeaway is this: farmers already have data-driven tools available to them to make better crop management decisions, and the vast majority are not using them.

The farmer and the drone

Today, farmers have access to low-cost drones with cameras and image sensors on board.  These can be purchased for a few thousand dollars and flown by the farmer himself, or if they are lucky – and regulations aside – a local service provider.  Basically, the drones can produce the same NDVI images and maps that specialized satellite or manned aircraft image specialist do – only now with much higher resolution images.

You would think farmers would be thrilled with the combination of higher resolution images and more precise GPS coordinates, since it lets them identify problem areas within a few feet of accuracy.  In some cases, that is true, and others it is not. A higher resolution means you see more detail – detail that actually may detract from the usefulness of the image, like when it shows a shadow.  Is that a shadow or a bad crop area?  Hard to tell from the picture.  For that, you need to see it with your own eyes, as is done with crop scouting.

Crop scouting – the act of inspecting crops to look for problems such as pests, weeds, irrigation issues, and so forth — is generally done today via a simple drive-by in a pickup or an ATV.  Scouting is not a perfect science, and neither farmer nor service provider can assess every plant’s health and crop pressures. However, small drones are portable, and users can fly them over a field and see real-time images on a monitor. Since many farmers go out and scout their crops every couple of weeks manually, a drone crisscrossing the air could perform that work much more effectively. This helps cut down on the time identifying areas that need detail scouting and helps give the proper inputs on where to eventually spray weed control or pesticide, or even determine when it is time to harvest.

Beyond clarity of regulations, what’s missing for widespread adoption?

With the total value of our nation’s crop estimated at $140 billion per year, even a modest improvement in yield would have a substantial aggregate economic impact. However, it’s not yet clear how a UAS can deliver more usable data to a farmer or provides a cost benefit over the existing image solutions available to them today.

What seems to be missing from today’s solution is the expertise to interpret the data, correlate it with what is actually happening on the ground, and recommend a course of action.  Services that deliver aerial imaging can provide the data, but someone needs to invest the time, money, skills and software to get actionable insight from it. Right now, it appears that’s not being done well by the dealers who already offer imaging from satellites and manned aircraft. How’s that going to change when they start offering imagery from drones?

Here are few more questions:

  • What’s the incentive for a farmer to adopt a new imaging technology when 75% of farmers (at least in Iowa) don’t use what’s available to them now and dealers countrywide say it’s not profitable?
  • How will drones change that equation?  Why will farmers or crop consultants invest the money, time and expertise analyzing UAS-derived datasets if they aren’t doing the same with the manned aircraft or satellite derived data they can already purchase?
  • How will UAS service providers convince farmers that their data is more valuable, more actionable, and has a high ROI when so many farmers seem to be relatively uninterested in data in the first place?
  • Are farmers prepared to adjust their field operations and personnel to be data driven, and how will they make this happen?

I’m not saying that farmers won’t use UASs to improve their operations.  Some absolutely will, and in fact, some already are.  But given all of the underlying complexity, it does beg the question: Is agriculture really the biggest UAV market, “dwarfing all others” as AUVSI asserts?

My answer: I don’t think so.  To date, I’ve seen no research that really digs into the critical questions underlying the use of UAS in agriculture and shows the rationale supporting massive, rapid adoption; this despite the massive bets – in terms of time and capital investment – that are already being placed.  With so much at stake, I’m thinking that should be the subject of a considerable research study, one that I am currently formulating.  Stay tuned for details. Until then, my bet is that film – not agriculture — is the biggest sUAS market.

What do you think? I’m interested in your comments, reactions, and responses.

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30 Comments

  1. […] of industry observers has started to ask questions about the reliability of AUVSI’s findings. This post at Drone Analyst is a good example. These individuals, many of whom are among the true pioneers in […]

  2. […] of industry observers has started to ask questions about the reliability of AUVSI’s findings. This post is a good example. These individuals, many of whom are among the true pioneers in commercial UAS […]

  3. Jake Brune July 29, 2014 at 7:30 AM

    I agree that maybe film at this time might have the upper hand in the UAV market. However, if FAA proceeds with favorable commercial regulations, I think this would be a huge shift towards agriculture. A good point was made in this article about farmers not using the satellite imagery for NDVI maps, however I personally believe this is because so many producers are unaware this technology/service is out there. I would be willing to bet a good percentage of U.S producers have heard about crop scouting with UAV’s and the advantages ect.. over satellite based imagery. The other problem with satellite based imagery is that the producer whom is paying for the satellite imagery service’s cannot control when the images are taken. I have heard of different satellites taking images once a week, sometimes more or sometimes less. It could be a very cloudy or rainy day when the satellite’s are suppose to take the images therefore interfering with any important data. Also maybe a producer wants the images right before and or after a rain. Maybe the producer wants the images taken at a specific growing stage or right before or after any type of application. There are endless possibility’s of when a producer would want these timely very high resolution images. Needless to say, I think agriculture in regards to the FAA will “take the bull by the horns” for many different reasons. The biggest reason being that everybody seems to have some sort of interest in these flying camera’s.

    • Colin Snow July 29, 2014 at 9:11 AM

      Thanks Jake. I’ll be discussing more on the issues surrounding adoption of UAVs in agriculture later. Stay tune.

  4. […] market will be the second biggest commercial drone market (behind aerial photography and cinema and ahead of precision agriculture) by telling you three things I learned about how GIS professionals see and use […]

  5. […] market will be the second biggest commercial drone market (behind aerial photography and cinema and ahead of precision agriculture) by telling you three things I learned about how GIS professionals see and use […]

  6. […] will be the second biggest commercial drone market (behind aerial photography and cinema and ahead of precision agriculture) by telling you three things I learned about how GIS professionals see and use […]

  7. […] market potential for drones in precision agriculture needs vetting—see Film or Farm: Which is the Bigger Drone Market? – Part 2 for my thoughts on this. It’s not yet clear how a UAS can deliver more usable data to a farmer or […]

  8. Commercial Drone Markets: 2014 Year in Review December 30, 2014 at 10:34 PM

    […] market potential for drones in precision agriculture needs vetting—see Film or Farm: Which is the Bigger Drone Market? – Part 2 for my thoughts on this. It’s not yet clear how a UAS can deliver more usable data to a farmer or […]

  9. […] over the existing manned aircraft or the satellite image solutions available to them today (see Film or Farm: Which is the Bigger Drone Market? – Part 2 for more on […]

  10. […] over the existing manned aircraft or the satellite image solutions available to them today (see Film or Farm: Which is the Bigger Drone Market? – Part 2 for more on […]

  11. Megan Nimmo March 23, 2015 at 1:06 PM

    I am a farmer and one who will be purchasing a drone with NIR-VIS capabilities (to get NDVI images). We currently use variable rate spreading of nutrients before a we plant a crop based on smart sampling zones made from soil water holding capacity maps (by Veris). We also apply irrigation and fertigation with variable rate irrigation prescriptions. We cannot, however, spread variable rate fertilizer in season as it is incredibly difficult to tell when and where in the field we have deficiencies. We can scout and we do. we also have a professional scouting service to fill in the gaps of scouting. We tried to use both plane and satellite imagery last growing season. The satellite imagery should have been once a week, however due to the weather and cloud cover we did not get any images from the end of June until the end of September. The plane has a +/- 3 day window of flying then it takes a day to get the image and then another day to get the spreader out or send out a new fertigation prescription. AT V10 (forage corn stage) we tried to have our corn flown over to get images, lets just say it was a fail at getting it at the right timing for application. Also, both the satellite and plane imagery is not useful when growing vegetables (green beans, peas, kidney beans, etc) at least for our farm.

    While farmers might not have the economic abilities to invest the big dollars into drone instigation in their business, like media/cinema might have, I hope that we are not discounted as users and innovators in this field. It is my belief (as a younger, female farmer) that the percentages of farmers (as mentioned in the article above) who do not use what is available to them in regards to technology, don’t use it due to the old adage of “We farm this way because that’s they way we’ve always done it”. With a younger generation of farmers I surely hope it will change and farmers do start to utilize all the technology available to them, if not for the sustainable environment factors, but then for better yields and profit.

    Let’s not put labels on all farmers and discount us as movers and shakers in the drone imagery field.

    • Colin Snow March 23, 2015 at 1:41 PM

      Thanks for you comments and your story Megan. I hope we see more growers like you utilize both UAS and VRT for the very reasons you stated.

  12. […] at $247 million. Right off the bat you can discount their numbers since it’s been established over and over that agriculture will not lead the market. Clearly they have not researched thoroughly […]

  13. […] at $247 million. Right off the bat you can discount their numbers since it’s been established over and over that agriculture will not lead the market. Clearly they have not researched thoroughly […]

  14. Simon June 12, 2015 at 2:53 AM

    Satellite imagery support to agriculture works well in France, and is an established practice. In the UK this technology has not taken off. Why? Weather and Business model.

    Weather: In UK it is hard to capture suitable satellite data in the required time frame (we are talking windows of days to get the right data to advise farmers). The weather in France does not provide such constraints to operations.

    Business Model: In France the information is provided to farmers as part of a service through Co-Operatives. In the UK farmers do not work in such a co-operative fashion so trying to develop the market means talking to each individual farmer rather than a cooperative manager representing 10s or 100s of farmers.

    Will sUAS change this? In the UK maybe, in France maybe not. 5m resolution data is adequate for nitrogen mapping so 3 cm resolution is overkill. So no need for change in France. In the UK, it is the ability to get the data when needed that is likely to be the main benefit, but the right access point to market needs to be found – maybe through established agronomic advisors dealing with multiple clients.

    • Colin Snow June 12, 2015 at 9:34 AM

      Thanks Simon! Great to read your compare and contrast between UK and France. – Colin

  15. […] I’ve put dollar signs next to each service and listed them in progression to represent both the skill and value each has for potential customers. Notice I’ve got question marks there by spectral imaging. That’s because the jury is still out on whether there is a solid ROI on this service vs. that provided by manned aircraft for precision agriculture. Precision agriculture often gets touted as the #1 place where “drones will transform the world” but the hard reality is this is a specialized application and a very complex market. (I have written about this extensively and you can find some very important details in a post I wrote more than a year ago called Film or Farm: Which is Largest Drone Market – Part 2?) […]

  16. […] I’ve put dollar signs next to each service and listed them in progression to represent both the skill and value each has for potential customers. Notice I’ve got question marks there by spectral imaging. That’s because the jury is still out on whether there is a solid ROI on this service vs. that provided by manned aircraft for precision agriculture. Precision agriculture often gets touted as the #1 place where “drones will transform the world” but the hard reality is this is a specialized application and a very complex market. (I have written about this extensively and you can find some very important details in a post I wrote more than a year ago called Film or Farm: Which is Largest Drone Market – Part 2?) […]

  17. […] I’ve put dollar signs next to each service and listed them in progression to represent both the skill and value each has for potential customers. Notice I’ve got question marks there by spectral imaging. That’s because the jury is still out on whether there is a solid ROI on this service vs. that provided by manned aircraft for precision agriculture. Precision agriculture often gets touted as the #1 place where “drones will transform the world” but the hard reality is this is a specialized application and a very complex market. (I have written about this extensively and you can find some very important details in a post I wrote more than a year ago called Film or Farm: Which is Largest Drone Market – Part 2?) […]

  18. […] I’ve put dollar signs next to each service and listed them in progression to represent both the skill and value each has for potential customers. Notice I’ve got question marks there by spectral imaging. That’s because the jury is still out on whether there is a solid ROI on this service vs. that provided by manned aircraft for precision agriculture. Precision agriculture often gets touted as the #1 place where “drones will transform the world” but the hard reality is this is a specialized application and a very complex market. (I have written about this extensively and you can find some very important details in a post I wrote more than a year ago called Film or Farm: Which is Largest Drone Market – Part 2?)  […]

  19. […] I’ve put dollar signs next to each service and listed them in progression to represent both the skill and value each has for potential customers. Notice I’ve got question marks there by spectral imaging.  That’s because the jury is still out on whether there is a solid ROI on this service vs. that provided by manned aircraft for precision agriculture.  Precision agriculture often gets touted as the #1 place where “drones will transform the world” but the hard reality is this is a specialized application and a very complex market.  (I have written about this extensively and you can find some very important details in a post I wrote more than a year ago called Film or Farm: Which is Largest Drone Market – Part 2?) […]

  20. […] providers underestimate that power, especially in agriculture.  We have written about that topic here, and this video of Young Kim, CEO of Digital Harvest, echoes […]

  21. […] providers underestimate that power, especially in agriculture. We have written about that topic here, and this video of Young Kim, CEO of Digital Harvest, echoes […]

  22. […] place in the billons. There are plenty of experts that question whether or not such estimates are missing the mark, but it’s proof that farmers and growers have something to be excited about both in terms of […]

  23. […] at $247 million. Right off the bat you can discount their numbers since it’s been established over and over that agriculture will not lead the market. Clearly they have not researched thoroughly […]

  24. […] market potential for drones in precision agriculture needs vetting—see Film or Farm: Which is the Bigger Drone Market? – Part 2 for my thoughts on this. It’s not yet clear how a UAS can deliver more usable data to a farmer or […]

  25. […] I’ve put dollar signs next to each service and listed them in progression to represent both the skill and value each has for potential customers. Notice I’ve got question marks there by spectral imaging.  That’s because the jury is still out on whether there is a solid ROI on this service vs. that provided by manned aircraft for precision agriculture.  Precision agriculture often gets touted as the #1 place where “drones will transform the world” but the hard reality is this is a specialized application and a very complex market.  (I have written about this extensively and you can find some very important details in a post I wrote more than a year ago called Film or Farm: Which is Largest Drone Market – Part 2?) […]

  26. […] I’ve put dollar signs next to each service and listed them in progression to represent both the skill and value each has for potential customers. Notice I’ve got question marks there by spectral imaging.  That’s because the jury is still out on whether there is a solid ROI on this service vs. that provided by manned aircraft for precision agriculture.  Precision agriculture often gets touted as the #1 place where “drones will transform the world” but the hard reality is this is a specialized application and a very complex market.  (I have written about this extensively and you can find some very important details in a post I wrote more than a year ago called Film or Farm: Which is Largest Drone Market – Part 2?) […]

  27. […] when they discover they’ve targeted the most difficult sector to penetrate. We have written again and again about the challenges drone service providers have in providing clear ROI in agriculture […]

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