the ‘net’ effect on agriculture nathan watermeier program leader, technology nathan watermeier...
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The ‘Net’ Effect on Agriculture
Nathan WatermeierProgram Leader, Technology
Nathan WatermeierProgram Leader, Technology
E-COMMERCE: Impacting the Way We Do Business!Nashville, Tennessee
October 1-2, 2001
http://ebusiness.osu.edu
Topics
• Agriculture IT AdoptionAgriculture IT Adoption
• Technology Strategies in AgricultureTechnology Strategies in Agriculture
• Future OutlookFuture Outlook
• Suggestions for Extension ProfessionalsSuggestions for Extension Professionals
Agriculture IT Adoption
What’s happening out there?
Farms with Computer Access
0
10
20
30
40
50
60
70
80
Northeast NorthCentral
South West US
Region
Per
cen
t
1997
1999
2001
USDA/NASS, 2001
2001 U.S. Average - 55% of Farms have Access to Computers
Farms that Own/Lease Computers
0
10
20
30
40
50
60
70
Northeast NorthCentral
South West US
Region
Per
cen
t 1997
1999
2001
USDA/NASS, 2001
2001 U.S. Average - 50% of Farms Own/Lease Computers
Computers for Farm Business
0
5
10
15
20
25
30
35
40
45
Northeast NorthCentral
South West US
Region
Per
cen
t 1997
1999
2001
USDA/NASS, 2001
2001 U.S. Average - 29% Farms use Computers for Business
Farms with Internet Access
0
10
20
30
40
50
60
Northeast NorthCentral
South West US
Region
Per
cen
t 1997
1999
2001
USDA/NASS, 2001
2001 U.S. Average - 43% Farms have Internet Access
Farm Economic Class with Internet Access
0
10
20
30
40
50
60
70
1,000-9,999 10,000-99,999 100,000+
Dollars of Sales
Per
cen
t 1997
1999
2001
USDA/NASS, 2001
Internet Activities
0
2
4
6
8
10
12
14
PurchaseAgricultural
Inputs
Conduct AgMarketingActivities
AccessUSDA/NASS
Reports
Access otherUSDA Reports
2001 Online Farm Activities
Per
cen
t
Northeast
North Central
South
West
US
USDA/NASS, 2001
Producer’s Online
Internet ActivityInternet Activity
• 78% Check Email78% Check Email
• 72% Access Local 72% Access Local WeatherWeather
• 75% Check Commodity 75% Check Commodity PricesPrices
• 62% Find Ag Information62% Find Ag Information
(eAgriCounsel.org)
Buying OnlineBuying Online
• 48% Buy from Vendors48% Buy from Vendors
• 83% Want a Trusted 83% Want a Trusted Local VendorLocal Vendor
• 24% Won’t buy online - 24% Won’t buy online - UnfamiliarUnfamiliar
• 17% Shop for Price17% Shop for Price
• 67% Shop for Product67% Shop for Product
The Web: 166.14 Million Surfers Strong in U.S., 2001
• Almost 60% population in U.S. has Internet Almost 60% population in U.S. has Internet Access. Access. (Nielsen Net Ratings, 2001)(Nielsen Net Ratings, 2001)
• Only 27% Availability for high speed Only 27% Availability for high speed access. Only ¼ of U.S. is wired for high access. Only ¼ of U.S. is wired for high speed. speed. (The Industry Standard, 2000)(The Industry Standard, 2000)
What Gets Customers to Buy?
• 77% lower prices77% lower prices
• 65% more security65% more security
• 35% items easier to find35% items easier to find
• 30% comparative data30% comparative data
• 15% easier ordering15% easier ordering
• 14% faster delivery14% faster delivery
• 12% better presentation12% better presentation
Jupiter/NFO, 1999
On-line Shopper “Come Backs”
• 85% best prices85% best prices
• 74% high security74% high security
• 57% e-mail confirmation of order57% e-mail confirmation of order
• 55% frequent buyer and users discount55% frequent buyer and users discount
• 54% ability to track status of purchase online54% ability to track status of purchase online
• 28% e-mail alerts28% e-mail alerts
Horning & Associates, 1999
Customer Problems Using the Web
• 81% speed81% speed
• 34% organizing information34% organizing information
• 32% finding information32% finding information
• 13% returning to a page13% returning to a page
• 9% cost9% cost
• 5% not knowing where I am5% not knowing where I am
• 11% other11% other
Horning & Associates, 2000
E-Business Issues
• Knowledge gap between technology, products and Knowledge gap between technology, products and implementationimplementation
• Laws, SecurityLaws, Security
• Data and Information Ownership and ErrorsData and Information Ownership and Errors
• PrivacyPrivacy
• WarrantiesWarranties
• Development of new, constantly changing Development of new, constantly changing communications modelscommunications models
• of Businessof Business
Today, 63% of Ohio’s
population has access to
broadband
Cable Modem Service
Cable Modem Rollout
DSL
Ohio’sBroadband
Connectivity
Interstate Highway
www.ecom-ohio.org
Why is Broadband Important?
• Community Economic DevelopmentCommunity Economic Development
– Strengthen existing and attract new businessStrengthen existing and attract new business
– Provide localized IT services and supportProvide localized IT services and support
– Help sustain the rural communityHelp sustain the rural community
• Foundation for value-added IT technologies Foundation for value-added IT technologies and services in the futureand services in the future
Technology Strategies in Agriculture
GeoSpatial TechnologiesDecision Support Systems
Internet and E-BusinessFood Quality Technologies
Agriculture Is In a New Age
Information Age
Courtesy of Potash & Phosphate Institute
Future of Crop Production?
• Remotely sensed dataRemotely sensed data
– Will we have yield monitors in the future?Will we have yield monitors in the future?
• Electrical, Chemical, and Mechanical SensorsElectrical, Chemical, and Mechanical Sensors
– Protein sensorsProtein sensors
– Soil nutrient sensorsSoil nutrient sensors
• Variable rate application maps eliminatedVariable rate application maps eliminated
– Automated sensorsAutomated sensors
Data will drive decisions
• High quality data layersHigh quality data layers
• Statistical and mathematical proceduresStatistical and mathematical procedures
• Prediction modelsPrediction models– 2 month advance predictions for marketing products2 month advance predictions for marketing products
• Bank loans, crop insurance, gov’t payments, Bank loans, crop insurance, gov’t payments, environmental complianceenvironmental compliance
• SSURGO – assessing soil properties for taxesSSURGO – assessing soil properties for taxes
GPS and Documentation
Remote Sensing and Sensors• Monitor crop growth during the seasonMonitor crop growth during the season
• Optimize field operation logisticsOptimize field operation logistics
• Supervise employeesSupervise employees
• Manage production riskManage production risk
• Market niche productsMarket niche products
• ““Traceback” for food safetyTraceback” for food safety
• Document environmental complianceDocument environmental compliance
Geographic Information Systems (GIS)
• Stacked Set of Map Stacked Set of Map LayersLayers
• Spatial and Attribute DataSpatial and Attribute Data
Various StrategiesVarious Strategies
• Crop ProductionCrop Production
• Marketing Products and ServicesMarketing Products and Services
• Land Use PlanningLand Use Planning
• Disease ControlDisease Control
• Locating Large Scale Livestock UnitsLocating Large Scale Livestock Units
• Watershed ManagementWatershed Management
Management Zones
Precision Farming is Dead…A European Perspective
• 1) Classic Precision Ag is dead.1) Classic Precision Ag is dead.
• 2) GPS will be equal to navigation2) GPS will be equal to navigation
• 3) The biggest and most important discussion 3) The biggest and most important discussion point was traceback, documentation, etc.point was traceback, documentation, etc.
• Summary: Documentation and navigation will be Summary: Documentation and navigation will be the real practical precision farming in the future.the real practical precision farming in the future.
(July 3, 2001 @gInnovator)
Georg Durrstein, www.satconsystem.comGeorg Durrstein, www.satconsystem.com
Precision Ag Services and Enhanced Seed Dealership Survey
(Farm Chemical Magazine and Center for Ag Business, Purdue Univ., 2000)
Precision Ag Services and Enhanced Seed Dealership Survey
(Farm Chemical Magazine and Center for Ag Business, Purdue Univ., 2000)
Weather and Other Information
Predicted Dryland Results
What is the Internet Doing for Farms and Agri-Business?
• Information SharingInformation Sharing
• Distance EducationDistance Education
• Buying/Selling Products and ServicesBuying/Selling Products and Services
• Marketing CommoditiesMarketing Commodities
• Data Storage and Decision MakingData Storage and Decision Making
Information Sharing
• E-mail communicationE-mail communication
• Electronic Business CardElectronic Business Card
• Sell yourself, commodities, products and Sell yourself, commodities, products and management management
• Provide information and data to all levels of food Provide information and data to all levels of food chainchain
• Educate general public (i.e., environmental Educate general public (i.e., environmental stewardship, community involvement)stewardship, community involvement)
Distance Education
• Online undergraduate and graduate Online undergraduate and graduate coursescourses
• Online Training (free to fee-based)Online Training (free to fee-based)
• CertificationCertification
E-Business Models
• Business-to-Consumer (B2C)Business-to-Consumer (B2C)
• Business-to-Business (B2B)Business-to-Business (B2B)
• Business-to-Government (B2G)Business-to-Government (B2G)
• Consumer-to-Consumer (C2C)Consumer-to-Consumer (C2C)
Relationships
ManufacturerInput Supplier
ProducerProduct Handler
ProcessorConsumer
Defining E-Business
• E-business is not E-commerce.E-business is not E-commerce.
• E-business is the conduct of business on the E-business is the conduct of business on the Internet.Internet.– This includes buying and selling, online marketing, This includes buying and selling, online marketing,
servicing customers, providing and collecting servicing customers, providing and collecting information, and collaborating with business partners.information, and collaborating with business partners.
• E-Commerce is a component of E-Business. It is E-Commerce is a component of E-Business. It is the mechanism for purchasing and selling online.the mechanism for purchasing and selling online.
Computer Science
Marketing
Logistics
Biz Admin Consumer Behavior
P.R.
Graphic Design
Quality Control
Engineer
Research Sales
??
???
Law
E-Business
B to B
B to C
Types of E-Biz Model Formats
• MarketplacesMarketplaces
• Mall PortalsMall Portals
• Auction SitesAuction Sites
• Customized Web SiteCustomized Web Site
• Informational / TourismInformational / Tourism
E-Business Stores and Malls
• Basic templates providedBasic templates provided
• Will get you up and going quicklyWill get you up and going quickly
• Easy to doEasy to do
• One-stop shop for everythingOne-stop shop for everything– Shopping CartsShopping Carts
– Credit Card TransactionsCredit Card Transactions
– TransportationTransportation
– SecuritySecurity
– Advertising and evaluationAdvertising and evaluation
http://www.ohiowines.org
DOT.COM Fallout
Was it too much too fast?Was it too much too fast?
Self-Examination Period, 2001• Certain Dot.Coms see the need to spend more time Certain Dot.Coms see the need to spend more time
educating about technology and expectations so educating about technology and expectations so customers know how to access their products and services customers know how to access their products and services online. (indicators: comprehensive help section, additional online. (indicators: comprehensive help section, additional methods for customer support, warranties/liabilities)methods for customer support, warranties/liabilities)
• Businesses are refining and enhancing existing Businesses are refining and enhancing existing methodologies. (indicators: advertising costs down, methodologies. (indicators: advertising costs down, developing knowledge base systems)developing knowledge base systems)
• Trying to make sense of customer data already acquired. Trying to make sense of customer data already acquired. (indicators: strongest investments in IT industry are in data (indicators: strongest investments in IT industry are in data storage, database management, broadband and security. storage, database management, broadband and security. InternetWeek, September 2001)InternetWeek, September 2001)
Communicating Quality Signals• Clear crisp imageryClear crisp imagery
• Audio / VideoAudio / Video
• Allow comparisonsAllow comparisons
• Allow samplesAllow samples
• Tracking informationTracking information
• Customer Service/SupportCustomer Service/Support
• TestimonialsTestimonials
• Brand RecognitionBrand Recognition
www.brinkmanfarms.com
OSU E-Business Audience Observations and Evaluations
• Internet Business Plans are not on paper
• Many have “informational” web sites more are starting to get into full e-procurement web sites this year
• Difficult to keep up with maintenance and online marketing strategies throughout the growing season
• Low web site traffic
(Watermeier, N, 2001)
(Small Business Audience)
E-Biz Topics Being Asked
• How to Get Noticed on Search EnginesHow to Get Noticed on Search Engines
• Managing the whole transaction process from data Managing the whole transaction process from data collection, e-procurement, to follow-up with collection, e-procurement, to follow-up with customers.customers.
• Web development “how to’s” Web development “how to’s”
• Selecting a web hosting companySelecting a web hosting company
• Measuring ROIMeasuring ROI
• Email and mailing lists for customer interaction and Email and mailing lists for customer interaction and ordersorders
(Watermeier, N, 2001)
Suggestions for E-Business
• E-Business is more than a web site. It is about E-Business is more than a web site. It is about adding IT into other portions of the business, e-adding IT into other portions of the business, e-marketing, and e-commerce.marketing, and e-commerce.
• Plan for timing and expenses for e-business. Learn Plan for timing and expenses for e-business. Learn and investigate mechanics of the technology. Rely and investigate mechanics of the technology. Rely on experts to make it happen.on experts to make it happen.
• Establish a good working relationship with your Establish a good working relationship with your web design/hosting consultants. Meet customer web design/hosting consultants. Meet customer expectations by delivering timely products and expectations by delivering timely products and information.information.
Suggestions for E-Business
• Visibility is important to get noticed. Watch your Visibility is important to get noticed. Watch your competitors. Build Search engine compatible web competitors. Build Search engine compatible web sites.sites.
• Consider professional design, content and Consider professional design, content and navigation structure. Usability and download time navigation structure. Usability and download time are key elements. Evaluate, adjust and repeat.are key elements. Evaluate, adjust and repeat.
• Understand legal issues on the Internet. Own your Understand legal issues on the Internet. Own your own virtual property. All offline laws apply online. own virtual property. All offline laws apply online. Use common sense and business practices.Use common sense and business practices.
Thoughts on Online Trading
• Grain sales are still new and limitedGrain sales are still new and limited(i.e., few local buyers onboard)(i.e., few local buyers onboard)
• Price comparisonsPrice comparisons
• Independence and “neutral”Independence and “neutral”(i.e., Cybercrop, Rooster, E-markets)(i.e., Cybercrop, Rooster, E-markets)
• Online Decision ToolsOnline Decision Tools((i.e., E-markets – Decision Rules for Contracts (DRC))i.e., E-markets – Decision Rules for Contracts (DRC))
• Customer service?Customer service?
Data and Information Warehouses
• Local and regional data sets on a variety Local and regional data sets on a variety of informationof information
• Cropping and livestock information (i.e., Cropping and livestock information (i.e., varieties, soil types, yields, diseases, varieties, soil types, yields, diseases, insects)insects)
• Organize, manage, consultOrganize, manage, consult
• Aggregate and mine data for decision Aggregate and mine data for decision making and marketingmaking and marketing
Data and Information Warehouses
E-Business will not save Agriculture
• Next generation of E-Agribusiness Next generation of E-Agribusiness will generate off of value in the will generate off of value in the information and services that it information and services that it currently provides. currently provides.
• Agriculture is becoming more Agriculture is becoming more vertical with production and vertical with production and distributiondistribution
• Requires new learning Requires new learning opportunities and willingness to opportunities and willingness to share data between the different share data between the different levels of the food chain.levels of the food chain.
Next Generation E-Agribusiness• Traceback and Identity Preservation through Traceback and Identity Preservation through
“suite” of data collection and interpretation “suite” of data collection and interpretation technologies. technologies.
• This will be provided through documentation This will be provided through documentation (text, graphics, and voice), GPS, GIS, remote (text, graphics, and voice), GPS, GIS, remote sensing, other sensors, data sensing, other sensors, data warehousing/mining, decision support systems, warehousing/mining, decision support systems, and knowledge base systems.and knowledge base systems.
Electronic Identification (EID)
• Management Tool• Tracking Information• Quality• Food Safety
Ohio Beef Network – Ohio Cattlemen’s Association & OSU ExtensionOhio Beef Network – Ohio Cattlemen’s Association & OSU Extension
IdentityPreserved.com
• Tracking and identification tools for Tracking and identification tools for capturing value for food and agriculturecapturing value for food and agriculture
• Includes services to keep track of Includes services to keep track of information and help make decisionsinformation and help make decisions
Postmark® SignpostPostmark® Signpost
CropTouch TMCropTouch TM
TraitCheck TMTraitCheck TM
GMOCheck TMGMOCheck TM
Future Outlook
Refinement of Technologies
• Mining multiple data setsMining multiple data sets
• Data WarehousingData Warehousing
• Increased BandwidthIncreased Bandwidth- Internet 2, wireless, cable, DSL, and - Internet 2, wireless, cable, DSL, and satellitesatellite
• Speech to text, text to speechSpeech to text, text to speech
The Future of E-Business
• Growth will continue, will be more rational, Growth will continue, will be more rational, cautiouscautious
• Integration with strengths of businessIntegration with strengths of business
• Sharing of databases and knowledgeSharing of databases and knowledge
• CRM (Customer Relationship Management)CRM (Customer Relationship Management)
• XML and other standards/platformsXML and other standards/platforms
The Future of E-Business
• Business to business e-com will continue to growBusiness to business e-com will continue to grow
• Consumers will expect brick and mortar Consumers will expect brick and mortar businesses to have a dot.com presencebusinesses to have a dot.com presence
• Successful models will be “clicks and mortar” and Successful models will be “clicks and mortar” and “pure plays”“pure plays”
• Meanwhile the Web will be omnipresentMeanwhile the Web will be omnipresent
“X” Internet
• Defined by Forrester Research as Defined by Forrester Research as ‘executable’ and ‘extendable’ Internet‘executable’ and ‘extendable’ Internet– Cell phonesCell phones
– Radios/TVs/AppliancesRadios/TVs/Appliances
– Tractors and combinesTractors and combines
• Wireless and Chip technology with Internet Wireless and Chip technology with Internet connectivityconnectivity
Future Technologies
• 3G Wireless (Third Generation 3G Wireless (Third Generation Wireless)Wireless)– Japan’s DoCoMo, I-ModeJapan’s DoCoMo, I-Mode
– 80% Wireless Users in World are in Asia 80% Wireless Users in World are in Asia (NTIA, 2001)(NTIA, 2001)
• WAP (Wireless Application Protocol)WAP (Wireless Application Protocol)
(DoCoMo, 2001
Virtual Reality
• Pesticide Pesticide TrainingTraining
• Virtual Virtual ConferencesConferences
• Crop Crop ConsultingConsulting
Smell Technology
Computers equipped with chemical spray devices.
Built on molecular ionization processes.
Suggestions for Extension Professionals
Basic Starting Point -Learn about the Technology
• Use Internet tools in everyday education Use Internet tools in everyday education programmingprogramming
• You don’t have to be the expert on everything. You don’t have to be the expert on everything. Explore the web and new technologies and Explore the web and new technologies and identify ways it can assist you.identify ways it can assist you.
• Don’t let the technology intimidate you or drive Don’t let the technology intimidate you or drive your education programsyour education programs
• Evaluate what is most effective for the audienceEvaluate what is most effective for the audience
Where do we need to be . . .
• Increase Organization Skill SetsIncrease Organization Skill Sets- Training (Internet, GIS, E-Business Planning)- Training (Internet, GIS, E-Business Planning)
• Invest in Organization’s Technology Invest in Organization’s Technology Future ($$$ and staff)Future ($$$ and staff)
• Promote Online educationPromote Online educationcourses “DOT.EDU”courses “DOT.EDU”
• Practice what you preachPractice what you preach
- How ‘Useable’ is your web?
- 5 years?, 10 years?
- Begin building database driven web sites
Extension Programming• Implement specialized IT teams across University: (i.e., GIS, E-Implement specialized IT teams across University: (i.e., GIS, E-
business, precision agriculture)business, precision agriculture)
• Non-biased position: implement research studies to evaluate Non-biased position: implement research studies to evaluate applications of technology in real-world conditionsapplications of technology in real-world conditions
• Start building the technical capacity and partnerships within local Start building the technical capacity and partnerships within local communities. Create a county Information Technology Steering communities. Create a county Information Technology Steering Committee.Committee.
• Train community leaders to assess the potential for E-Business.Train community leaders to assess the potential for E-Business.
• Develop training opportunities to educate operators of small- and Develop training opportunities to educate operators of small- and medium-sized businesses how to plan, establish, and expand medium-sized businesses how to plan, establish, and expand business presence using the Internet.business presence using the Internet.
