March 31, 2025

Purdue economists discuss technology, farm profitability

Commodity Classic panel

Michael Langemeier

DENVER — Economists from Purdue University discussed the role of technology in improving farm profitability at the 2025 Commodity Classic.

Technology can boost production, streamline processes on the farm and boost efficiencies — but their effectiveness varies from farm to farm.

There are five managerial levers a farmer can pull, said Michael Langemeier, director of the Center for Commercial Agriculture at Purdue.

1. Output price: Manage price for what you get for what you produce.

2. Yield: Manage how much output you produce.

3. Costs: Manage how much it costs you to produce.

4. Assets: Manage your balance sheet/what tools you use to produce.

5. People: Manage the people that help you with the other four levers.

“Today we’re going to talk about the asset side,” Langemeier said. “Technology can have a large impact on what your balance sheet looks like, but it can impact other levers like yield and cost.

“I’m not going to pretend this is really simple. You need to ask a series of questions.”

• How do you identify the “right” technologies?

• Do you love or resist technology adoption?

• Does your farm community love or resist technology adoption?

• Who are you talking to about farm technology? Are they the right people?

• Could technology allow us to farm more acres with the current machinery

• Could technology lower our machinery costs and investment per acre?

• Could technology affect our labor efficiency and productivity?

• Could technology allow us to grow higher value crops?

• Could technology change our crop rotations and mixes?

“Ultimately, all of those decisions about what technologies we adopt and how much we’re willing to spend rolls up into a bushel of corn, a bushel of soybeans or bushel of wheat,” said Chad Fiechter, research director at the Center for Commercial Agriculture.

“As we’re thinking about how do we adopt those technologies, a lot of times what we do as ag economist is train people how to do these partial budgeting exercises where we identify what are the costs and what are the benefits of everything.”

Farmers can consider the following questions:

• Will the technology increase bushels?

• Will technology decrease my cost of production?

• Will the technology allow me to manage my operation better, leading to higher output or lower cost?

• Does the technology make my life better, but not lead to higher output or lower cost?

“Add up the yes amounts and subtract the cost,” Fiechter said. “If it’s a positive number, go for it. If it’s a negative number, run.”

Erica Quinlan

Erica Quinlan

Field Editor