Uncovering Value in Agronomic Services
By D. Stephen Ellery, P.Ag, CCA 10/17/2022
I can say with almost 100% certainty that the number 1 question I am asked by clients is “How much do you services cost?” Although somewhat of a loaded question I will attempt to explain what goes into our pricing guidelines in our service area on the Hi-Line. The second most asked question I get is “What exactly do you do?” I won’t be answering the latter in this article, but you can visit out our Services Rendered page for more information on the services we provide.
Agronomy is a very broad term when it comes to services rendered and it is extremely important that you as a customer know what you are paying for. If you have read our post about “Why Hire A Agronomist?” I try to outline some of the differences that one may encounter when searching for and Agronomist or Crop Advisor. Unfortunately, due to the high variability in pricing and services offered both within (inter) and between (intra) companies, it often comes down to the producer ensuring they are going to get value out the services they are paying for and outlining specific expectations they have with the consultant.
Typical services offered by agronomy companies include soil sampling, field scouting, Variable rate technology (VRT), data management, crop rotation management, financial analysis, and grain marketing. Services offered will vary by company as mentioned before and thus pricing is widely variable. Services are typically charged on a per acre basis with a range from $3.00 to $15.00/ac depending on the company and services rendered.
How much does “Agronomy” cost on the Hi-Line?
- Soil sampling - $0.50 to $4/ac **HIGHLY** dependant on size of fields, required analysis (macros, micros) and density of sampling (zone vs composite vs grid)
- Crop scouting / Agronomy - $3.50 to $4.50/ac depending on intensity of scouting required should include observations and recommendations on corrective actions for these prices.
- Variably Rate Prescriptions (Rx) - $1-$2/ac depending on level of automation and depth of datasets used to create recommendations.
- Data Management - $1-$2/ac again dependant on the level of automation and number of datasets being collected.
If you are getting estimates for much less than the prices above you should ask yourself, why?
It can be nice to save a few dollars up front, but in this business, a small mistake or missed opportunity can drastically affect your bottom line.
- Do they posses the required education and experience to perform the duties?
- Do they carry proper insurance? This could result in liability issues for the producer if the agronomist makes a bad recommendation. Alternatively, some companies won’t take the liability of making recommendations which leaves you taking advice from a product sales team.
- Do they have Workers Compensation insurance? The landowner could be liable if an accident should happen.
- Do they have reliable and safe transportation? Having maintained and safe operating equipment is essential in providing reliable service to clients especially in this industry.
- Is this a side-hustle? There are some companies that operate as agronomists on the side (not their main job) and may charge less. Although there is nothing “wrong” with this, is your farm going to get the attention and care it needs during the vital growing season if your consultants primary focus is elsewhere?
- Are they undercutting prices to gain business in the area? Some companies will undercut rates to secure work. If a company’s only selling point is a reduction in price, will that ultimately come at a cost, and will you be receiving the same level and quality of service? This often leaves companies reluctant to speak openly about rates as they have likely overcharged unknowing clients and undercharged others to maintain revenues at a disservice to both the clients and industry.
Typically selecting the cheapest Agronomy consultant leads to regret and frustration and ultimately poor client satisfaction. This leaves you with a season missed and potential profits left on the table and ultimately two things will happen. One, you will be frustrated with agronomy consultants and not interested in retaining another service provider or two it leaves you back at square one searching for a new consultant.
If you are getting estimates for much more than the prices above, you may be overpaying. Some reasons companies are charging too much:
- The company may be carrying too much debt and need to charge inflated rates to keep up with payments and prevent being forced out of business.
- Companies will prey on producers with limited knowledge in the subject area. With the number of emerging technologies and Ag Tech companies it becomes difficult to wade through the strategies and technologies that would work on your specific operation. This allows companies to charge inflated prices to customers who are forced to take biased advice from salesmen interested only in selling products and not the long-term viability of your operation.
- Not fully understanding the market and their operating costs. The best companies know their operating expenses and market competition to price their services accordingly. Not understanding these vital aspects of the business can lead to improper pricing and potentially overcharging you as the customer.
The most important thing when deciding whether a Professional Agronomist or Crop Advisors rates are fair is, “will this service provide value to my operation?” You want to work with an Agronomist who can understand your needs and work with you for the long term. Long term relationships are extremely important in this industry due to the complexities and uniqueness of each farming operation, and you should be working with someone who understands this. Ensuring you receive value from services rendered before signing contracts will ensure you are getting the help you require at a price point you are satisfied with leading to the greatest chance of client satisfaction.
How can I save money on Agronomy services?
- Package deals are a great way to save money. Often companies will offer discounted rates for multiple services. Companies will typically pass savings from reduced travel time and increased efficiency on to their clients when contracting multiple services.
- Reoccurring services are another way to save money. Often having a reoccurring service with a crop consulting company will result in savings in the long run. Often there are set-up fees for new client accounts especially when maintaining data or creating field management zones. By finding a company you want to work with on a reoccurring basis you can prevent having to incur these fees at multiple companies. This is one reason why selecting the right company from the beginning is so important.
- Referrals are another way companies will offer incentives to clients. Typically, a referral bonus will be given to a client for referring a neighbour or friend. Some companies will extend this benefit to both clients to everyone can enjoy the savings.
Costs incurred by a typical Agronomy consulting company:
- Workers compensation insurance
- Employment/Unemployment insurance
- Canadian Pension Plan (CPP) / US Social Security Fund
- General Liability Insurance
- Omissions and Errors Insurance
- Commercial Vehicle Insurance
- UTV insurance
- Fair pay for employees including Statutory holidays and vacation pay
- Quality equipment for field work (cell phones, tablets, laptops)
- Specialty equipment (data loggers, logging tools)
- Reliable work trucks
- Fuel for transport to and from farms
- Ongoing vehicle and equipment maintenance costs
- GIS based data collection software for data management and Rx creation
- Field software for data collection and scouting records
- Legal Council
- Marketing (web design, promotional materials, trade shows)
- Training costs to ensure all staff meet company standards
- Professional Licensing (Alberta Institute of Agrologists, American Society of Agronomy)
- Storage / office space for equipment and vehicles
If you are looking at a new Agronomy service provider on the Hi-Line, do not just look at their pricing. We understand that price point is important, but here are a few things you should also consider.
- Seek reviews from current or past clients. Often the most honest reviews will come directly from previous or current clients of the company. Seek out one of your neighbours and ask why they chose to use or not to use a certain service provider.
- Communication is essential in this line of work. Did they answer the phone right away, or return your call promptly? Are they friendly and helpful even though you may not be a paying customer? If you are going to be working with someone in direct communication, it is important to ensure the lines are always open.
- Are they able to offer you unbiased advice or are they constantly trying to sell you products and technology that may or may not benefit your operation? Often, companies that sell products are more inclined to make recommendations to use their products regardless of if it is the best or most economical option. Any company providing fee for service advice should be providing recommendations to benefit the producers bottom line not their sales volume.
- Do the services provided bring value to my operation? Most of the value in agronomy consulting comes from proper, timely recommendations from the consultant. Some companies will not want to assume liability from making recommendations on pesticide and fertilizer use. Is the value the same for the producer if they are still taking chemical recommendations from a sales team?
Hopefully this article has brought some insight into what drives the pricing behind agronomy consulting services on the Hi-Line. Ideally you will be communicating often with your Agronomist or Crop Advisor during your engagement. Choosing an appropriate agronomy provider the first time is essential to developing trust from the producer in both the agronomic process and the service provider. This fosters long lasting relationships beneficial to both the producer and service provider in the long run.
Don’t settle for subpar services with no value just to save a few dollars as it will likely end up costing you in the long run which ultimately leads to low client satisfaction!