5 Technologies Agribusiness Owners are Using to Boost Profit Margins

The emergence of new innovations - such as automation, AI and cloud computing - mean much more advanced farm processes are now possible.

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    Technology has been proven time and again to improve efficiency and increase profit margins for agricultural companies. The emergence of new innovations – such as automation, AI and cloud computing – mean much more advanced farm processes are now possible, prompting a surge in interest from distributors and growers alike.

    In this article we cover the main types of technologies disrupting agribusiness and how they’re helping farmers to improve efficiency, reduce waste and increase profit margins.

    Artificial Intelligence

    Artificial Intelligence (AI) is a method of learning from historical data using statistical analysis. For farmers, this type of technology can be used to capture and harness farm data – empowering them to optimize farm processes from planning through to harvest.

    AI is being exploited by farmers to perform predictive analytics. Sensors and drones can capture a range of data sets; such as soil moisture, wind speed and leaf wetness. With clever computing, such as statistical analytics and predictive modelling; it is possible to use this data to forecast how, when and where is best to plant, irrigate, protect, feed and harvest crops.

    In this way, AI can be used to improve yields and, therefore, significantly improve profit margins. For example, with the use of drones and remote sensors, farmers can assess planting conditions by taking images of farmland and collecting data from remote sensors, including PH levels and soil moisture. Then, by capitalizing on AI algorithms, farmers can continually tweak crop inputs to boost yields.

    AI is also enabling more precise demand forecasting. AI makes it possible to forecast three times more accurately than with traditional methods. By leveraging contextual data, AI algorithms can provide actionable forecasting information – including when is best to water and harvest crops. This is particularly impressive in the context of fresh produce, where harvests are more difficult to predict.

    This technology can help farmers to best prepare, maintain and harvest their crops – meaning they can produce more, waste less and, ultimately, increase profits.

    Internet of Things

    Crop protection and fertilizer is a hidden but highly significant expense. In fact, farmers are spending more on pesticides today than ever before. According to the National Agricultural Statistics Service, the agricultural costs resulting from production for the year 2017, in the US, reached an increase of 3.7% compared to previous years, and it continues to rise.

    As commodity prices continue to surge, companies incur higher growing costs, forcing many farmers to re-evaluate their approach to input use and cropping. IoT, or ‘Internet of Things’ could provide a solution.

    IoT, or ‘Internet of Things’, describes everyday objects embedded with electronics to enable data transfer, without the need for human-to-human or human-to-computer interaction.

    Using this type of technology, farmers can simplify and streamline the collection, inspection and overall distribution of agricultural resources – such as where and when to treat crops – simply by collecting data from equipment and produce.

    Today, farmers can collect air-borne and space-borne data from fields, as well as corresponding historical and climate data. With this, the technology applies crop, variety and region-specific analysis of data as well as crop phenology and attributes.

    With greater insight, farmers can isolate undesirables such as agronomic issues, nutrient deficiencies, disease infections, as well as pest and weed infestations.

    This makes it possible for farmers to apply treatments optimally, helping to ensure that outputs exceed inputs. Furthermore, with greater insight, farmers can avoid fronting the huge costs incurred by misdiagnosis or unnecessary treatments.

    With more control over the quality of their crops, companies can create greater value for less. By improving the quality of produce and the size of yields, fresh produce companies can feed growing populations and enjoy increased profitability.

    The Cloud

    The Cloud is another innovation providing farmers with a vital service. It allows them to aggregate, analyze and share newly available data across farms and continents.

    An early example of this technology is John Deere’s adoption of an ‘operations center,’ which is a cloud-based software that tracks and monitors the performance of farm vehicles for faster and improved troubleshooting. With faster machine support, agronomic analysis, and advanced prescriptions; it is possible for farmers to reduce time-consuming and costly pitfalls in productivity, often caused by vehicle malfunction.

    The ‘Farmers Business Network’ is another cloud-based service based in California that benchmarks participating yields against each other. This allows farmers to compare yield performances of over 8,000 farms with transparency on inputs such as nitrogen application, population, rainfall, hybrids, soil quality, rotation, and tillage.

    By comparing data, farmers can adjust their methods; qualifying inputs based on specific conditions. This allows for more effective resource allocation, thereby improving yields and reducing costs. The software also provides greater insight into market prices for seeds and chemicals, giving farmers more buying power.

    The insight these types of cloud-based services provides gives farmers additional control over output levels. With more precise decision-making capabilities, farmers can scale up and increase profits.


    The benefits of blockchain for the agricultural industry are many. One way in which blockchain will help farmers boost profit margins is by enabling them to better market the quality and sustainable merits of their produce. It is also possible to reduce any waste caused by product recall, sometimes necessitated by a food scare or outbreak.

    In a blockchain system, the journey of produce is recorded as it moves along the supply chain; which means the history of your produce can be used as a marketing tool. If, for example, produce was grown on an organic farm in California, transported via a courier using an electric van, then packaged at a recycled packaging plant that pays its workers a living wage – all this information could be stored on the blockchain, verified, and then be used to add value to your produce to increase profits.

    This system, for fresh produce companies, could also mean a reduction in food fraud as well as delivery issues that can be costly. With blockchain, handlers must make an entry at each link in the supply chain which is verified by blockchains ‘consensus building’ mechanism.

    In this way, supply chains are monitored at every step, illuminating any discrepancies caused by mistakes or fraudulent activity. For companies, this means a reduction in misdirected or left-behind goods, which will spoil if supply chains don’t run efficiently.

    Blockchain also promises enhanced traceability, possible thanks to goods being recorded at each link in the chain. In the event of a food scare or outbreak, companies can easily trace fresh goods all the way back to their origin – intact with certificates and inspection documents. This reduces the risk of companies being falsely accused of causing an outbreak and reduces the likelihood of unaffected goods being incorrectly removed from the supermarket shelves – meaning less waste, less damages to your reputation and higher profit margins.

    Blockchain will also enable companies to proactively review supply chains at the touch of a button. This means companies can improve efficiency by assessing routing options, and reducing any unnecessary costs, while making journeys quicker – this means less waste, fresher produce, improved relationships with supermarkets and, ultimately, an increase in profits.

    ERP: the platform for the future

    Integrating an ERP solution is a proven method for fresh produce businesses to significantly improve profit margins. For this reason, ERP systems are increasingly ubiquitous within the industry. By providing business owners with strategic oversight, ERP solutions allow companies to streamline their day-to-day operations in a way that reduces waste and increases profit.

    With an ERP solution, for example, companies can efficiently manage their inventory, consignments and stock rotation, which helps them to maximize sales. Fresh produce can spoil in a matter of hours, but with access to real-time connected data – which links grading machines, sensors, handheld mobile devices and any other equipment – companies are able to properly plan supply lines to ensure goods are prepared and shipped according to their life-cycle, significantly improving efficiency and maximizing profit margins.

    If, for example, a pallet of strawberries you were about to load for delivery to the supermarket has perished, you need to know immediately where you can get the same quantity of fruit with the same accreditation standard – or lose out on the sale.

    An ERP solution puts vital information – such as accreditation documents, consignment details, and routing option – right at your fingertips, meaning companies can avoid missing out on sales and avoid any reputational damages that come from bad quality shipments.

    Technology is preparing the industry for the future, today

    Innovative new technology in agribusiness is helping to improve efficiency and increase yields for farmers—maximizing profit margins at every step. By addressing major challenges, these innovative new technologies are helping farmers to produce on larger scales so they can feed growing populations. As the industry experiences a surge in innovative tech, farmers are welcoming increased profits, greater sustainability and a huge potential for growth. To learn more about how technology can help industry challenges, download our free white paper, Global Pressures in the Fresh Produce Sector.

    To see first-hand how the Microsoft solution we offer helps companies like yours, join our webinar “Improved Profitability and Food Safety with Velosio” on October 15th.