Developing an AgTech Savings and Benefits estimator for the livestock sector

Summary

Using insights and cost & benefits data from MLA’s Carwoola and Romani trials, other relevant MLA projects and vendor research, KPMG will build an Excel ROI model in accordance with parameters agreed upon by MLA. The model may provide key insights such as net payback period to help inform red meat producer’s investment decision making taking into consideration direct and indirect costs.

Objectives

This project will:

• Identify the cost and benefit considerations of AgTech solutions
• Identify parameters and build the ROI model
• Using the cost and benefits data, KPMG plan to build an ROI model in accordance with parameters agreed upon with MLA and key stakeholders.
• The model will provide key insights such as net payback period to help inform the producer’s investment decision making. It would enable users to take into consideration direct and indirect costs of pre / post use of the AgTech and the benefits the AgTech offers.

Key findings

Water monitoring technologies represent the quickest wins for producers to see tangible benefits and demonstrate direct cost savings from investment
• AgTech devices have provided direct economic benefits, particularly pertaining to the re-allocation of labour, and qualitative benefits such as piece of mind and time released for other uses
• Other AgTech technologies such as satellite pasture management hold promise in future, however based on vendor conversations, their further early-stage adoption and long-term measurement of benefits would be ideal to prove their value.
• A cost benefits indicative tool will be used not only to help farmers solve a specific problem but also to contribute to their awareness of the general benefits of AgTech and its varying use cases.

Benefits to industry

The project sets out to develop an AgTech ROI model to be used by producers as a guide when making AgTech purchasing decisions. This would provide livestock producers with the missing pieces and key resources to help them accelerate their investment decision making process and ultimately their adoption of AgTech which will improve their productivity.

MLA action

The learnings gained from this project and the ROI AgTech excel tool developed were utilised in a subsequent project V.DIG.0023 which created a clickable prototype tool of the excel calculator. This clickable prototype was showcased at Beef Australia and producer feedback was gathered on how this could be developed into a functional online AgTech savings and benefits calculator. The creation of this and the associated project are in the development phase.

Future research

Future research and continued development of the model created will ensure the tool remains reflective of current industry conditions and experiences, has optimal precision and accuracy, and offers even more advanced functionalities. Examples of these recommendations include
• Conducting a pilot program with a selection of livestock producers in different geographies running different farming systems to trial the AgTech Cost Benefits estimator and refine the precision of the tool for different user scenarios
• Exploring the preferred method of accessing this tool
• Exploring extension support services to promote awareness of the tool and help livestock producers access and use the tool, and explore the findings with them.